Back in the “good old days” when a company wanted an employee or executive to relocate to a different city, often times the company would do whatever it took to move that executive, even purchase the person’s home. Companies didn’t want anything to stand in 15the way of them acquiring top-notch talent from Anytown, USA. However, also back in the “good old days,” selling a home wasn’t nearly as difficult as it is today with homes taking months, even years to sell and many homeowners holding on to mortgages that are underwater.
However, the current real estate market slump has impacted how companies and their employees view relocation and job transfers today.
A recent article in The Chicago Tribune features a Q&A with Susan Schneider, president of Minneapolis-based Plus Relocation Services and the Worldwide Employee Relocation Council (ERC) trade group. She explains how businesses and the relocation industry’s attitudes have changed regarding corporate relocation and dealing with an executive’s home in this new era.
Schneider says in the past, many executives were reluctant to move for a job because a spouse didn’t want to move away from his/her family, or their spouse had a good job and couldn’t relocate him/herself. However, today, Schneider says the excuse is “I can’t sell my house,” or “I’m underwater by hundreds of thousands of dollars and just can’t afford to move!”
Now, before relocating an employee, Schneider told the Chicago Tribune that companies are offering “candidate assistance” to help with the relocation decision process. They help council an employee on how to get their house sold and some even offer a marketing budget for executives to fully prep their house for a quick sale.
Schneider also says that companies are bringing back a like “buy back” program. Many companies, she says, are offering a “loss on sale” benefit to relocated employees where the companies says it is willing to pay the difference if a homeowner has to take a loss in the sale of their home in order to sell it quickly.
Another way companies are working to improve the mobility of their workforce is that that are offering rent incentive packages to prospective or relocating employees. Companies understand that employees might have to move again in a few years, and again a few years after that. With this in mind, instead of assisting an employee with a new home purchase, which can decrease mobility, they are instead incentivizing their workforce to rent by underwriting rental costs. Corporate housing, like those offered through CHBO, can provide a furnished home for months or years at a time to a relocated individual, without committing them to long-term lease agreements or a mortgage that will be hard to turn over in our soft housing market. In other words, corporate housing is just one of a many options to increase our nation’s workforce mobility.