Relocation: employers find fewer are willing to make the move
Relocation, an occupational hazard of upwardly mobile executives and industrial plant workers, is encountering steady, large-scale resistance by employees across the country, says the Employee Relocation Council in Washington , D.C. A recent council study showed 75 percent of the companies surveyed had encountered some employee opposition to relocation, mainly because of high interest rates and mortgage costs.Skip to next paragraph
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A Los Angeles company managed to circumvent this obstacle recently by offering a Northeastern executive $500,000 for a house payment. He took the carrot and moved west. And the American Electric Power Company (AEP), trying to move 900 people from New York to Columbus, Ohio, in 1980, sweetened the offer with $5,000 interest-free loans for transferred employees buying homes.
Most companies are now paying an average of $30,000 per employee move, the Employee Relocation Council says. While much of that covers the cost of the actual move, more companies are looking into ways to make up the difference in housing costs, which often offset any financial gains offered by the transfers.
Some companies, like Champlin Petroleum Company, have arranged for bank loans at a lowered interest rate for transferred employees. Others offer lump sums to be used in the new down payment.
But even with the loan offers, AEP only managed to transfer 60 percent of its shop employees to Ohio. Hindering the rest were such things as the presence of relatives, cultural roots, and spouses' jobs in the New York City area. As one AEP official put it, ''We're talking about changing a whole way of life.''
Mid-level executives in small towns may feel this more acutely. ''In a small or medium-size town, he's Mr. Industry; his family is treated that way, and he is treated that way,'' a Union Carbide Corporation office reports. ''In Manhattan, he gets lost on the commuter train with guys making four or five times as much as he is, riding in a dirty car.''
Union Carbide encountered so much resistance from its executives in small-town plants that the company moved its corporate headquarters from New York to Danbury, Conn. AEP officials, working with the opposite problem, offered free driving lessons and interest-free auto loans to convert subway-going New Yorkers into car-driving Ohioans.
Driving lessons are just one of the ways companies try to ease their employees into their new towns. In Washington, D.C., an organization called Relocation Information Centers (RIC) sets up swimming pool memberships, gets library cards, finds racquetball partners, dentists, and day camps. It also locates post offices, parks, and supermarkets on a map for their clients. The business, started by three often-relocated housewives, is designed to ease all the little decisions that go into relocating, such as where the cat will stay while the family looks for a home.
RIC, believed to be the first such service in the country, works independently and with Bekins Van Lines to provide aid for anyone moving to the capital area. But employees transferring to other areas tend to depend on their companies - sometimes with astounding results. One wife of a Florida executive, for instance, balked at moving to the snows of Minnesota - until the company bought her a mink coat to keep her warm.
Then there's the Southern marketing executive who wanted transportation for his 12 thoroughbred horses. He didn't get it; instead, the company hired a local man, who ''had less talent, but . . . didn't have any horses to move, either,'' says one person involved in the hiring.
Still, there is some evidence that it is worth asking for extras. In this day of dual-income families, many companies have informal spouse-assistance programs that circulate resumes and check out the job markets in advance. Assistance is offered on a case-by-case basis, though, and must be sought before it's given, the experts say.
Evidence is also mounting that companies are doing more of their hiring locally, rather than disrupt their executives' homes and mortgages. The choice, when you calculate all the sweeteners these companies must add to the cost of relocation, often seems far more cost-efficient. And easier on the mink.