A recent study conducted by IBIS World stated that in the last five years, the Employee Relocation Industry has had a growth of $13.9 billion, which is at 0.4 percent annually. It is believed that the impetus for this growth is due to the rising economy and corporate profit. The other factor that boosted the Employee Relocation Industry is the housing market’s positive trend in the last few years. A substantial share of the revenue for the Employee Relocation Industry is generated from the real estate market.
As a result, the study concluded that in 2021 alone, the growth in the economy and house pricing index likely contributed to about a 7.8 percent increase in the Employee Relocation Industry. Unfortunately, this improvement came at a time when the industry is immensely affected due to the COVID-19 pandemic.
While some employees refused to relocate due to health issues, and with a drastic loss of employment in parts of 2020 and 2021, the Employee Relocation Industry suffered. But with work-life coming back to normal, the relocation of employees is picking up. Furthermore, with the new trend of the Great Resignation, companies and employers are looking to hire talent beyond domestic boundaries. However, the incentive offered to talent doesn’t end here. The existing employees can rise vertically or horizontally within the company to ensure they are retained.
In such a scenario, where real estate plays an important part in relocation, we need to see how it affects an employee. In many situations, the employee needs to sell a property before relocation and/or purchase a new property in the new location. In this article, we will investigate the effects real estate has on the relocation of an employee and how an employer can help.
Perspective of an Employee
For many employees, buying and/or selling their house is critical for relocation, hence understanding their experience would help the employer to prepare and offer a better relocation outcome.
Low-Inventory and High Prices
Across the country, many home buyers are facing difficulty with purchases because of the record-high prices in the real estate market. While that bodes well with any employee selling the house for relocation, there is another issue. When the same employee searches for the house in their new destination, they are looking at a price that can be higher than expected. They can also be in the situation of losing out on multiple bids or they may feel rushed to buy an overpriced property. Given such a situation, there are ways the employer can help the relocating employee.
Employer Can Help to Relocate an Employee
If you are still wondering why there should be a relocation program for the current real estate market, the answer is simple. The last thing you would want is for your employee to leave your company because of a tough home purchase experience. Furthermore, without a mobility or relocation program in place, you are in the position to lose out on more money. You may lose time, for example, if the employee is outbid by others for a new home, thus delaying their relocation time. You also might receive more exception requests, for example, if the person is moving into an expensive real estate market.
So, how can an employer help an employee with the relocation program?
Extending the Corporate Housing Benefits
If you already don’t have one, you should provide your employee with corporate housing benefits. In case you already have the benefit in place, it is time to extend the benefit longer. Corporate housing offers the transferee a short stay in fully furnished accommodations until they find a new place to call home. But this stay cannot be for an indefinite period. With relocating employees having a hard time finding a house in this real estate market, extending the stay should be an option when applied for by the employee.
Extending the Timeline
The high-priced real estate market, with delayed enclosures, travel bans, and the introduction of an air-bubble due to the pandemic resulted in employees failing to utilize the relocation policy within the stipulated time. As a result, some people failed to relocate within the required timeline and had to forgo the benefits. Employers should evaluate existing relocation policies. The impetus is on employers is to identify the areas where they can extend timelines and offer the benefits to the relocated employee, mainly when it comes to real estate.
Final Words
One of the best ways to execute an employee relocation assistance program is to work with an experienced Relocation Management Company (RMC). An RMC can help your employees with relocating, finding the right house/closing, plus the many other steps needed in an employee’s relocation. An RMC can also design a cost-effective relocation policy that serves transferees’ needs while still saving your company money.
