Those who work on or assist with corporate relocations likely have seen increasingly pronounced signs pointing to a key trend for the year ahead: group moves are coming back.
As COVID-19 continues to become a more ubiquitous part of everyday illnesses like the common cold or flu, the virus’ impact on businesses’ plans and growth strategies has significantly waned. Remote and hybrid work arrangements remain at higher levels than they were pre-pandemic, but companies across all industries are seeing the need and viability of relocating staff to have an on-site presence at key physical locations.
COVID-19’s Impact on Group Moves
The pandemic shifted everyone’s priorities. Companies no longer had the luxury of deciding how to expand or relocate their footprint – whether domestically or internationally. For many, it became a matter of adapting for survival and recovery.
In 2020, COVID-19 was the primary reason for employees declining relocation. In the years since the onset of the pandemic, it remains a topic of conversation, though less and less cite it as the number one obstacle (29% by 2021). Fifty-six percent of all companies said that COVID-19 was the most significant external factor affecting their employee relocation program in 2021.
One argument against relocation continues to be the success of remote working and development of technology like video conferencing.
According to Forbes, 12.7% of full-time employees work from home, while 28.2% work a hybrid model in 2023. Companies are still slowly announcing a return to work; however, experts and studies on employee preference indicate that hybrid or remote solutions will never fully disappear.
To complicate things further, some employees who no longer needed to come to the office took the opportunity to move away from more expensive metropolitan areas or move closer to family living elsewhere — sometimes without informing their employer. Pew Research found 17% of people who telework are doing so because they’ve relocated away from where their workplace is located. For businesses looking to formalize a return-to-work plan, employees will need to be willing to relocate back or commute further distances.
And lastly, global adversity coming out of the pandemic – such as supply chain disruption, economic uncertainty and threat of conflict – has significantly impacted operations and long-term business decisions, affecting the volume of relocations companies have been able to perform.
Signs Suggesting a Spike in Group Moves in 2024
But now that we’ve almost reached four years since the initial pandemic wave, the relocation industry is ready for a reawakening. Concerns about contracting COVID-19 have fallen behind traditional relocation worries: family issues, spouse/partner employment and the rising cost of living.
Coming out of the pandemic, one study revealed 44% of companies had a failed relocation project in 2020, compared to just 26% in 2021. The report also found 60% of companies reported increased domestic relocations, nearly half (48%) reported increased international relocations and 57% reported an increase in relocation budgets in 2021.
The numbers for 2022 show that relocation continues to trend upward. Nearly seven in 10 companies reported an increase in number of workers relocated from 2021 to 2022, and roughly the same saw increases in relocation budgets. Half of those surveyed specifically mentioned international moves were on the rise again.
Companies have also bounced back and are thinking to the future. For example, Florida saw an 86% increase in headquarter relocations (breaking the record from 2017). After reviewing Securities and Exchange Commission filings, the same report discovered 9% of American corporations made the move between March 2022 and March 2023. That equates to the highest relocation rate in seven years— or a 29% increase year-over-year from 2021-22.
Reasons for relocation run the gamut, but include cost-cutting, favorable tax rates and a shift to be closer to target markets. According to Hire a Helper, 62% of relocations brought companies to smaller cities, which typically helps them shave rental costs, cost-of-living and tax rates. With companies deciding to move, increased budgets for relocation projects and more flexibility with employees, it’s clear that group moves are coming back.
Assessing Your Organization’s Group Move Needs
Review Your Business Needs
Group moves require a significant investment of time, resources and both human and financial capital. These endeavors should not be taken lightly and should be seen as critical in supporting a key business goal. It’s important HR have a seat at the table as major business plans are being discussed to assess the true need for a group move, specifically the roles and talent needed to successfully execute those plans. This will help to identify which employees may be considered for relocation if their skills are required in a new location.
Cost of Living Differentials
To say the real estate market has been tumultuous the past five years would be an understatement. Both the average home price and monthly rent have increased significantly since 2018, 40% and 79%, respectively. Adding in overall inflation, the cost of living in certain cities has become untenable for more and more individuals and families. It’s important to properly assess the cost of living in both the departure and destination cities. Not only will this help to determine if any base compensation adjustments need to be made, but also what extra supports need to be offered if the destination cities are more costly and/or have especially competitive real estate and rental markets.
Reassess the Needs of Your Team
As corporate relocations lessened during the pandemic, many organizations tabled updates to their relocation policies. Years later, what employees want and expect from an employer asking them to move is likely different than the last time such an assessment was conducted. Solicit feedback from your employees regarding the demands a relocation will have on them and their family and begin to identify what core benefits your policy should include.
Account for Attrition and Rehiring
Even with a generous, industry-leading relocation policy, some employees simply won’t want to make the move. While some exceptions could be made to allow an especially talented individual to work remotely, such allowances quickly undermine the need for everyone to relocate to a new location. Have open and honest conversations early on with your team to gauge their receptiveness for the move to identify any employees who may express serious apprehension. For those that do, try to understand why they may be hesitant and what could be done to alleviate that concern. It’s not uncommon for someone to be wary of a move because they aren’t sure their spouse will be able to find a new job or are concerned about finding a good school for their children. For these issues and many others, there are additional relocation services you can offer to help them feel heard and supported.
Still, it should be expected that at least a few will decline the relocation opportunity and resign. Have a hiring plan in place so your team isn’t working at a deficit while the relocated team is getting acclimated to the new location. Identify those position most critical to your relocation plans and/or those positions where you think you’ll experience the most significant attrition to quickly backfill those roles with new hires.
Partners Like Hilldrup Can Help
A single employee relocation can be a complicated affair, but group moves are exponentially more complex. Few – if any – HR and talent management teams are equipped to adequately oversee them without external help. An experienced, collaborative mobility partner often is the difference in a group move initiative being a success or a major setback for your business and its expansion plans.
No matter where the job may take them, Hilldrup has the team and expertise to relocate your employees with ease. Learn more about our relocation services, capable of domestic to international moves. Contact us, and we’ll take it from there!