Employee relocation landscape changing

Workers concerned about value they will get for their homes in light of economic uncertainty

So far in 2008, the volume of corporate relocations in Canada has kept pace with the strong level seen last year, thanks in part to steady real estate values, a strong Canadian dollar and the revenues being generated from high-priced commodities, including energy, grains and precious metals.

However, the pace of relocation may change due to the economic slowdown in the United States. In Canada, labour shortages continue to be the norm in provinces such as Alberta, Saskatchewan and British Columbia while Ontario and Quebec are facing surpluses in their traditional labour sectors. These conditions make for a diverse labour market and, consequently, pose challenges to employers in developing effective relocation policies. Below is a look at some of the factors currently affecting relocation.

The changing values of residential real estate

Perhaps the most important issue for employers relocating staff in 2008 and 2009 will be meeting employees’ concerns about the value they will receive for the sale of their home. Home prices south of the border have, for the most part, been in a free-fall due to the sub-prime mortgage debacle. Canadians have taken notice of this fact.

As a result, many Canadian employees are beginning to put pressure on employers to guarantee them a set price for their home or they may not accept the opportunity to relocate.

Employers, therefore, need to know what the potential loss on a sale of a home might be as part of the relocation decision-making process. Similarly, for employers that are trying to attract new employees through a combination of enticements, including a generous relocation policy, the loss on real estate may prove to be a significant impediment to acquiring new talent.

But there are steps employers can take to mitigate — or at least fully understand — the potential loss on the sale of a home. They should get more than one appraisal on the same property and act to sell the home as quickly as possible based on the appraisal.

The price setting and marketing of a home is critical to achieving a quick closing. Homes that aren’t sold after 90 days run the risk of even further devaluation. That’s because they’re usually empty and have a “stale” status in the market. That could translate into an even greater loss for the employer or employee, depending on the relocation policy.

One size does not fit all

Employers, particularly ones affected by what’s happening in the United States, may be tempted to implement one-size-fits-all policies as a result of a downturn in the economy. But that’s a dangerous road to take.

Employers may save costs in the short run, but they will inevitably become less competitive and may lose high-value employees as a result of a relocation that did not meet their needs due to an inflexible relocation policy.

Destination services

Although there are many activities that occur prior to employees arriving at their destination, it is the successful integration into the new community that will most affect the success of the relocation.

Policies that include comprehensive services that address the needs of the entire family are more successful than those that do not. These services would include spousal job assistance programs, language training and school search services. The sooner employees and their families can integrate into the new community, the sooner the company will realize its investment.

Tim Verbic is the national director of business development and marketing at Royal LePage Relocation Services. For more information, visit www.rlrs.com.

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