RISMEDIA, April 17, 2007-More than 130 organizations participated in the online poll conducted in December 2006, which found 44% of those surveyed indicated they expected transferee volume to rise, 49% expected volume to remain the same and only 7% expected their volume to decrease.
"In the year ahead, the stable growth of the U.S. economy, historically low interest rates and low unemployment mean that companies have an increasing need to deploy talent to the places where it is needed most," says Earl Lee, president, Prudential Relocation. "And with 93 percent of poll respondents indicating volume will stay the same or increase, these organizations will also need to pursue creative ways to make their mobility programs attractive to prospective, as well as current, employees."
When poll participants were asked their areas of greatest concern, 36% indicated it was juggling all the factors that make relocation complex, including the changing real estate market (29%). Other important factors were containing expenses (15%) and recruiting and retention (7%).
"There are countless elements required to make relocating an employee run smoothly, and having this work seamlessly is a big challenge; the changing real estate market only intensifies the difficulty," says Lee. "Compared with the real estate markets of the recent past, transferring employees today will likely experience a more difficult time selling their homes due to the higher number of competitive listings. Proper pricing is the key to controlling these costs."
Given the outlook for 2007, Lee recommends organizations consider a comprehensive review of their mobility program and consider the following strategies to deal with administrative complexity and growing numbers of transferees:
– Review your relocation policy at least annually to ensure policy features and benefits align with changes in the labor and real estate markets.
– Conduct independent surveys of transferring employees to determine the effectiveness of your current mobility program.
– Research changes in the legal and regulatory environment such as the new IRS Ruling 2005-74 and Sarbanes-Oxley requirements.
– Meet with your recruiting department to determine if relocation benefits are effectively influencing potential new hires.
– Audit current communication tools to identify if line managers and employees clearly understand relocation benefits and cost drivers.
– Specific to the changing real estate market and relocation home sale programs, Lee emphasizes that all real estate is local and companies should carefully review move patterns to determine how to best improve their mobility programs.
– In markets where there is a high cost of housing, mortgage subsidy programs can be employed to effectively "buy-down" the employee's mortgage and make housing more affordable.
– It's a good idea to formally define a "slow" market and respond with specialized policy elements such as loss-on-sale provisions, list price restrictions, home sale incentive bonuses and even fix-up allowances or buyer concessions.
– Working with a network of relocation-certified real estate professionals is essential regardless of market condition.
"When it comes to relocation, our experience is that organizations need an effective program that achieves the objectives of recruiting and retention, while also containing costs," Lee says. "This requires a constant vigilance and adapting policies and programs to the changing real estate and labor markets. Flexibility is the order of the day. Leading-edge relocation programs offer flexibility and choice and contain costs."
For more information, visit www.Prudential.com.
