Cross one category of candidates off your prospect list – homeowners you have to relocate…
Relocating employees has always had a "haves" and "have-nots" type of feel. Back in the 90’s, most Fortune 500 companies had the "gold-plated" standard of employee relocation – covered physical moves, lump sums to handle all types of misc. costs and the ultimate in closing remote candidates – the home purchase program. Throw that package at a candidate, and you were closing business regardless of their financial situation..
Flash forward to 2007. Since the market crash of 2000, Fortune 500 companies have been steadily eliminating relocation packages including a home purchase program. Eager to slash the expense associated with such programs, big companies first moved to reserve home purchase programs for director-level and above candidates only. Over time, many Fortune 500s have restricted the availability of these programs even further, and many have eliminated the programs altogether.
That means most of us don’t have a home-purchase program in our arsenal as we try and recruit candidates requiring relocation. So we limp by with these components at our disposal – usually a physical move (perhaps capped at a certain $$ amount to limit the exposure) and a lump sum to handle misc. costs and to provide assistance, to the extent we can, with realtor’s fees and the potential costs of having two residences at the same time (which frequently occurs until the candidate gets their house sold on their own).
That package worked OK when the housing market was hot. Of course, now it’s not, which means you won’t be relocating many candidates for a while. Here’s data on the drop in home values via the New York Times:
"Prices fell 6.1 percent from October 2006 in 20 large metropolitan areas, according to Standard & Poor’s/Case-Shiller indexes, compared with a 4.9 percent decline in September. On a monthly basis, prices fell 1.4 percent in October, the fastest they have declined in at least the last seven years.
All but three of the 20 regions experienced a fall in real estate values, and even the three areas — Seattle, Portland, Ore., and Charlotte, N.C. — where prices were up from a year ago, had a decline from a month earlier.
Prices have fallen the most in Miami (down 12.4 percent from a year ago), Tampa (11.8 percent) and Detroit (11.2 percent). Prices are also falling in the nation’s two largest metropolitan areas — Los Angeles (8.8 percent) and New York (4.1 percent)."
That data means two things. Homes will take much longer to sell, and many candidates will find themselves scrambling to cover drops in overall home values. Many will consider the potential loss unacceptable as they consider selling.
Which means they won’t be accepting your limited relocation assistance offer.
Time to add "are you a homeowner" to your initial phone screen when talking to remote candidates, if you haven’t already.
Kris Dunn is a Partner and CHRO at Kinetix, a national RPO firm for growth companies headquartered in Atlanta. He’s also the founder Fistful of Talent (founded in 2008) and The HR Capitalist (2007) – and has written over 70 feature columns at Workforce Management magazine. Prior to his investment at Kinetix, Kris served in HR leadership roles at DAXKO, Charter and Cingular. In his spare time, KD hits the road as a speaker and gives the world what it needs – pop culture references linked to Human Capital street smarts.