RISMEDIA, June, 2009-As the global economy remains unsteady, the effects of the credit crunch and rising inflation have placed excessive pressure on corporations to keep business costs – such as relocation programs – to a minimum.
According to a 2009 survey on domestic relocation policies by Cartus, a leading provider of relocation and global workforce management services, over 75% of respondents cited an increase in employee resistance to relocate because of the economy, and 50% expect talent management challenges to increase over the next year.
“Even though we are in a recession, specific cost-control strategies can help corporate relocation managers successfully place employees to accomplish company needs,” said Renee Carnes-Rook, Cartus vice president of real estate services. “Now is a good time for relocation managers to re-examine workforce policies and strategies to increase cost savings.”
To strengthen relocation programs, Cartus offers the following recommendations:
1. Improve your real estate strategy. Keep in mind the following factors to help obtain quick home sales: price, condition, differentiation, and negotiation. For example, make sure that the home is reasonably priced, and authorize meaningful home sale incentives, such as decorating allowances, that emphasize property condition and help make certain that the home is “show-ready.”
2. Assist employees who are facing loss-on-sale or short-sale situations. The 2009 Domestic Relocation Survey reported that 70% of respondents’ employees were facing an actual loss on sale of departure homes, while another 54% cited employees who had negative equity. More than half of companies surveyed (53%) offer their current employees loss-on-sale support, which consists of reimbursement of varying percentages of sale loss.
3. Introduce new policies to uncover hidden benefits. Redesign relocation policies to address specific needs of various employee groups to avoid a “one size fits all” approach. For example, rephrase policies to be definite and unambiguous.
4. Be proactive! Corporate relocation managers should continually inform management of future risks and impacts to plan for unavoidable cost escalators, such as extended temporary living costs to accommodate longer selling times.
5. Create a new model for candidate assessment. Candidate assessments have traditionally applied to international assignments; however, in today’s market, even proposed domestic relocations should prompt an examination of local real estate conditions and the value of an employee’s property. Relocation managers may have to realize that the financial commitment for a particular candidate outweighs the business need and that other applicants should be considered.
For more information about Cartus or to speak with Cartus about strengthening relocation programs, please contact Susan Romanowski at 203-325-8772 X10 or via email at email@example.com.