EVANSVILLE, Ind. — In the midst of the economic recession, businesses large and small are taking a hard look at how much they spend on relocating employees. According to Atlas Van Lines' annual Corporate Relocation Survey, companies are cutting their relocation budgets as well as the number of people being relocated, and expect that trend to continue at least through 2009. However, when companies do decide to move an employee, they are more likely to offer incentives such as help finding a job for a spouse.
Atlas' survey, released today and the only survey of its kind, has for 42 years explored trends in how corporations move their existing employees or newly hired people. The Evansville-based corporate relocation, transportation and global logistics firm announces its survey results each year to coincide with the annual Atlas Forum on Moving in April.
"As we expected, corporate relocations are down, and those surveyed expect the trend to continue through this year," said Greg Hoover, Atlas World Group's president and COO. "Relocation is a tough proposition for both employers and employees. Businesses are looking to save costs everywhere, and workers are worried about losing money on their homes and uprooting their families. But companies still need good people, and those willing to relocate are being compensated for their trouble."
Here's a closer look at emerging trends illustrated in the survey:
Relocations are down, and will stay down in 2009
Overall, one out of four responding firms indicated relocating fewer employees than in 2007. Twenty-seven percent of respondents said the number of employees they moved in 2008 increased, compared to 36 percent in 2007, and 39 percent in 2006. Twenty-five percent reported a decrease in the number of employee relocations in 2008, compared with 14 percent in 2007 and 12 percent in 2006.
Respondents also predict those numbers will stay low in 2009. More than half (52 percent) predict that they will decrease the number of employees they move in 2009, and 48 percent predict relocation budgets will be cut again, as well. These percentages are more than double those seen in the past five years and represent the gloomiest outlook since 1975, when 38 percent of companies predicted lower relocation volumes than the previous year.
Good news for relocation professionals
Fewer companies that responded to Atlas' survey are relying on the employee – alone or with the company's assistance – to select a household goods carrier for his or her relocation. Instead, more companies handle that work in-house (47 percent, up from 43 percent last year) or use a relocation firm (22 percent, compared to 16 percent last year.)
Fewer employees are willing to accept a relocation. Roughly two-thirds (65 percent) of respondents had employees refuse relocation requests last year, up from 56 percent in 2007. And for the first time, housing/mortgage concerns surpassed family issues as the No. 1 reason for refusing relocation. With the housing market in flux, employees are concerned about selling their homes. Seventy percent of respondents said employees cited housing concerns in turning down relocation, a 20 percent increase over last year's survey and roughly two to three times the percentages cited from 2002 through 2006.
However, 84 percent of respondents say incentives – such as cost-of-living adjustments, relocation bonuses and mortgage payoffs – can "frequently" or "almost always" help to convince an employee to relocate. Respondents also indicated a slightly increased effort to help a relocated employee's spouse find work in a new location: 50 percent offered this service in 2008, compared to 42 percent in 2007.
It's still hard to find good people locally
Despite economic realities, companies say finding qualified workers locally remains difficult. Almost half (46 percent) cited lack of qualified people in the local market as the biggest influence on relocations, and even with relocation volumes declining, no major reductions in relocation benefits were reported. And 38 percent say declining an opportunity that involves relocation can hurt an employee's career.
Firms predict further declines in business
More than a third of firms (35 percent) said their financial performance was worse in 2008 than in 2007, more than double the amount seen in the previous three years. Forty percent of respondents predict even worse results this year, more than four times the number who made such predictions in 2007 for 2008.
However, they did indicate a belief that the U.S. real estate market may start to stabilize in 2009. Though 59 percent of respondents predicted the market would be worse in 2009 compared to 2008, 78 percent predicted that in last year's survey. Twenty-nine percent said the real estate market would stay about the same in 2009, compared to 15 percent who made that prediction last year.
Other fast facts
- The average number of small firms indicating they had relocations involve a male spouse has more than doubled since 2006. Overall, 20 percent of firms had male spouses involved in relocations in 2008, up from 11 percent in 2006. This trend coincides with a similar upward trend in spousal employment assistance, meaning more men are likely receiving assistance from their spouse's employer than in year's past.
- Manufacturing and processing firms were significantly more pessimistic about their individual financial performances than for-profit service firms. Projections by for-profit service firms were evenly split for 2009 (34 percent expect better financial performance, and 34 percent expect worse), but over half (53 percent) of manufacturing and processing firms project a further worsening of their individual financial performances in 2009, with only 20 percent expecting improvement.
- Eighty-three percent of respondents thought the U.S. economy as a whole was worse in 2008 than 2007.
- Respondents who cited economic conditions and the real estate market as the most significant factors impacting their company's relocation decisions jumped from 24 percent and 22 percent respectively in 2007 to 44 percent and 40 percent in 2008.
Over 300 corporate relocation professionals completed the online survey between January 12 and February 28. Most respondents work in human resources or personnel departments for service, manufacturing, wholesale, financial or government organizations, and about half work for international companies. To qualify for survey participation, a respondent must have relocation responsibility and work for a company that has either relocated employees within the past two years or plans to relocate employees this year.
For complete survey results, visit www.atlasworldgroup.com/survey.
Atlas Van Lines is the largest subsidiary of Atlas World Group, an Evansville, Ind.-based company that posted revenues of $908 million in 2008. Atlas World Group companies employ more than 700 people throughout North America. More than 500 Atlas interstate agents in the United States and Canada specialize in corporate employee relocation and in the transportation of high-value items such as electronics, fine art and new fixtures and furniture. Visit www.atlasworldgroup.com for more information on the company and Atlas agents.