Case Studies

Worldwide ERC defines a Commuter Marriage as one in which the transferee accepts a relocation and moves to the new work location without the spouse. The spouse and family remain indefinitely in the old location creating a commuting situation for the couple/family. What drives a Commuter Marriage? Our survey findings reveal that 50 percent made the decision based on children not wanting to leave school as social dynamics in the new location can be daunting—sports, friends and activities that are important during the middle school/high school years can suffer with a move to another school.

According to Worldwide ERC’s recent Transfer Volume and Cost Survey, slowed real estate appreciation (71%) and high housing cost areas (66%) were noted as key contributors to an employee’s reluctance to move. Depressed real estate markets, adjusting interest rates, as well as more stringent lending practices for home purchases make the prospect of relocation very difficult for employees. Despite the real estate decline on a national level, several cities’ cost of living indices are well beyond the U.S. average. In light of the current economic environment, Companies are encouraged to review current policies, look at redefining policy intent, and seek alternative benefits to overcome recruiting obstacles for attracting critical talent resources.

Paragon asked the question “How many HHG companies does your company have agreements with?” Of the responses, half had only one carrier while 38% had two and 12% had four or more. Depending on a company’s relocation volume, one company may be able to provide complete service while companies with greater volume may need more providers in order to service every move. Having a single choice may present issues with competitive pricing, scheduling, group moves, and quality of service among others.

Relocation assistance can be a key element in an organization’s ability to reach Talent Management goals. According to recent labor studies, more than 25%(1) of the working population will reach retirement by 2010, resulting in a massive labor shortage. In addition, the replacement pool of 35-44 year olds (the most common age bracket of transferring employees) will decline 15% over the next 15 years.(2) With talent pools shrinking, relocation benefits will be a necessary component in attracting the right person for the right job, whether the candidate is an existing employee or new hire.

As a result of the softening U.S. Domestic housing market, many organizations are being impacted by escalating homesale costs as more properties are accepted into client inventories for resale. While in inventory, additional expenses related to carrying costs, administrative fees, repairs, and often, loss on sale are incurred by the client. Paragon conducted a case study of activity involving Ideal Corporation that lead to the following results. This document is prepared as an example of how use of best practices will reduce costs of the homesale program expenses.

Declining housing values and loss on sale sit atop the list of employee and corporate challenges. As housing markets remain stagnate, mobility programs continue to be impacted with additional costs and extended marketing times. In March, Paragon conducted a survey to get the pulse of the marketplace. Of those surveyed, sources of employee dissatisfaction included: declining housing values (96%), loss on sale / equity (56%), extended marketing times (41%). As expected, respondents noted significant increases in costs related to inventory properties, loss on sale, temporary living, and duplicate housing expenses.

A recent Worldwide ERC Transfer, Volume & Cost Survey notes “employee/family resistance to move” as the third most common reason for reluctance to relocate to the new work location. To overcome potential concerns, Family Transition Support Assistance, sponsored by the Employer, could provide enhanced support as it offers the employee and family customized research on child-care and elder-care facilities along with programs of interest in the new location.