Fewer businesses splurging for employee relocation costs: Perk is more prevalent, though, when attempting to attract high-level executives

September 18, 2006

Paying closing costs on a home or, better yet, asking that a potential employer purchase the house itself are among the brashest requests she's fielded.

Yet the owner of Quiring Associates Inc. expressed some surprise when the Mayo Clinic in Minnesota arranged to move her daughter, a recent Purdue University graduate embarking on her first job no less.

"They brought a huge van down to pick up her things," Quiring said. "They actually wanted her to know how serious they were about her joining the team."

But for many companies, the benefit of reimbursing moving expenses is going the way of the defined pension plan, according to the 2006 Corporate Relocation Survey from Evansville-based Atlas World Group Inc.

Just 50 percent of employers surveyed said they offer full reimbursements for transfers and new hires to cover relocation costs, down from 62 percent in 2005. In contrast, companies are more likely to provide tiered reimbursements based on salary, position and tenure, according to the annual study.

The high cost of moving could be one reason for the decline. Estimates from national relocation consultancies range from $45,000 to $65,000 per homeowner. Moreover, industry experts say fewer companies offer the benefit simply because moves dropped during the slowdown in the economy, and even more following 9/11.

And finally, some employees balk at moving, fretful about sacrificing spouses' careers and family stability, said Karl Ahlrichs, senior human resources consultant for Professional Staff Management Consulting in Carmel.

"The spouse is often the hostile passenger in the trip," he said. "If the relocation isn't handled in a way the spouse is treated fairly, not only can the home life be affected, but it can spill over in the work life."

Even so, some corporations still view the extra expense as a necessary piece of their recruiting efforts.

"We don't want the cost of moving to preclude talented people from applying for jobs," said Nancy Norris, spokeswoman for the Indianapolis operations of New York-based Chase Bank. "Sometimes, the best opportunity is somewhere else, so the relocation packages help them seriously consider those other opportunities."

The most generous package Chase offers includes an allowance for house hunting and return-travel costs, as well as miscellaneous expenses such as funds for temporary housing and renter's or home-sale assistance. The bank also will help find a buyer for a home or purchase the residence itself as part of a guaranteed-buyout program.

Whether relocation assistance is available normally depends upon the importance of the position, Norris said. But exceptions have been made. Before Bank One became part of Chase in 2004, Bank One offered a lump-sum relocation package to all employees of a department in Indianapolis that was closing to consolidate with another in Louisville.

Indeed, compensation is more prevalent at the executive level, and among larger companies, said Herb Benshoof, president of locally based employment agency Pinnacle Partners.

Of the 90 jobs he is marketing in the accounting and information technology sectors, more than a third include relocation assistance, he said. Most of the positions pay at least $80,000 annually.

Companies are less willing to foot the bill below the executive level because they normally can find the required talent in the local market, Benshoof said. That's not always the case when searching for a chief financial officer, for instance.

In fact, companies of all sizes cited "lack of qualified people locally" most often in this year's Atlas survey as the leading factor affecting their number of relocations in 2005. For large firms, the reason eclipsed "economic conditions" (51 percent to 42 percent) for the first time in the four years the question has appeared.

But contrary to the Atlas study, Benshoof sees more employers, not fewer, paying to move new hires.

"The trend is continuing upward, as far as paying whatever it takes to sign a candidate," he said. "We're seeing a lot more action at the executive level, which had cooled off the last couple of years."

Several companies using Pinnacle's services are even dangling signing bonuses, which are beginning to make a comeback after disappearing a few years ago, Benshoof said.

The willingness of companies to splurge for bonuses and relocation reimbursements could be indicators of a strong economy. If nothing else, they suggest the job market now favors the candidate, both Benshoof and Quiring concurred.

Reimbursement allowances are not limited to the corporate world, however. IUPUI provides up to $10,000 for moving expenses and will assist a spouse with locating employment opportunities, said Robert E. Martin, vice chancellor of administration and finance. The university occasionally will attempt to locate temporary housing, but at the employee's expense.

Indianapolis-based Barnes & Thornburg LLP, the state's largest law firm, also pays moving expenses, as well as mileage. The perk is limited to lawyers, said Deborah Snyder, the firm's director of recruiting.

Beginning Jan. 1, Barnes & Thornburg will provide a new service for employees moving to Indianapolis. The firm has contracted with locally based Global Orientations, which provides city tours to help new arrivals get acclimated to their surroundings.

For Snyder, the new year can't come soon enough.

"That's a service that I usually end up doing, but it takes up so much time," she said. "And I certainly don't know everything about the city."
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