The beginning uptick of the economy has meant a resurgence in employees transferred to New York in the past several months and a rise in demand for relocation services.
With business increasing, relocation experts say they are seeing a number of new trends emerging, including shorter-term assignments and an increase in return move allowances as companies balance bottom lines with keeping employees happy.
The Internet has also played a role in changing relocation, as transferees have become more able to educate themselves in advance of a move, though such research hasn’t eliminated the need for “high-touch” personal service, agents say. Especially in Manhattan, with its steep prices, co-ops, lack of a listing system and other factors, local and personal service is key.
James Conigliaro, the Director of Corporate Services at DJ Knight, said there has been a pickup in relocation activity recently after a two-year lull, thanks to the improving economy.
“There was a slowdown of up to 30 percent,” he said. “But most corporations are reporting a pickup in the last 45 to 60 days.”
Tory Baker Masters, co-owner of Intrepid New Yorker, a relocation specialist, agreed. She set the upturn a little farther back, starting this summer. “We’ve seen it pick up a great deal,” she said.
Much of the increase has been due to “consolidation, mergers and acquisitions, and changing business strategies,” according Carmelita Brown, vice president of Prudential Consulting and Relocation Services. She said she expects the trend to continue in 2004 as companies hire more employees both internationally and domestically.
These days, corporations are not necessarily spending less, but they are being careful in how they allocate money, relocation agents say. Some items, like return move allowances – where the company will pay for the return move home, even if the employee is not returning to a job with the company – might even add cost, but makes for a more satisfied and productive employee.
“Corporations are being very selective, versus 10 to 15 years ago, in what they will pay for and they are making sure their money is spent wisely,” said Dawn Contiatori, vice president of business development and relocation at Douglas Elliman.
“The goal is to make sure the employee settles in as quickly as possible so they can concentrate on their position or role. They are not throwing money around, they are spending money where it needs to be spent.”
Companies are also beginning to provide shorter-term assignments, between one and two years, which may involve an employee leaving his or her family behind and traveling home on weekends.
“This is an emerging trend that benefits both the employee and management,” said Brown. “Most employees on shorter-term assignments prefer to commute home on the weekends. The company is more willing to let the family come visit the employee as part of the contracted visits they will pay for, as this keeps the employee happy and costs basically the same.”
Another concern of employees, partly fueled by job outsourcing to other countries, is the possibility of the company eliminating their position after they have moved, agents say. As a result, some company policies now have instituted return move, or “round trip,” allowances.
A recent survey, the Prudential Relocation Trend Inventory 2003, said such round trip packages have traditionally been more common for international assignments, but are now being seen for more domestic transferees.
“The round trip program is beginning to resemble the traditional international assignment where an expatriate went on assignment for a few years then returned home,” the report says. “As companies deal with this new trend, they may look to the international programs and implement services so the transferee can return to the same home when they are done.”
There have also been changes in how employees are reimbursed for moving.
Generally, companies can provide either flexible amounts of money for house hunting, expenses and travel, or a fixed lump sum where all expenses are covered in one payment, regardless of the amount the employee spends. The advantage of a fixed payment for a corporation is that it can budget wisely and always know what its cost will be. The Prudential survey identified lump sums as an “emerging trend.”
Finally, relocation professionals said complete settling-in services – everything from utility hookups to how to get car insurance – are being provided.
Contiatori of Douglas Elliman said her company has always offered full settling-in services for foreign assignees coming to the United States, but now companies are using these services for senior level executives or recruits in the United States. She points out that in a domestic relocation there can also be culture shock and there are certain instances where a corporation will request settling-in services to make sure an important employee has all the help they need.
“They are using us for everything from helping go to the right schools, how to shop, open a bank account, buy a car, get car insurance or get credit cards,” she said. “We are willing to do what needs to be done, because if the family doesn’t settle in successfully it may not be a successful assignment. It’s important for the family to be as comfortable as the employee.”
Masters, of Intrepid New Yorker, said around 60 percent of her company’s services are geared towards foreign nationals and 40 percent are domestic. The company offers “to do whatever it takes service,” from real estate agent selection to school interviews, selecting a nanny agency or helping set up insurance.
Generally, transferees often rent before buying, because they are not sure where they want to live.
“Fifty percent of all relocating employees like the opportunity to rent for a while so they can explore the different neighborhoods. In six months to a year they often find the right neighborhood and then we help them,” said Contiatori.
Masters agrees with that figure. “If they are transferring for a three-to-five-year assignment they are probably not buying,” she said. “Some companies discourage buying because if they get transferred again and can’t sell, the company doesn’t want to get saddled with the property.”
However, with the recent low interest rates, Masters said she is seeing more people buying. “Typical renters are deciding to buy, and now there are more first home buyers than ever before,” she said.
Finally, the Internet is also an increasing resource for those being transferred. According to the Prudential study, “the Internet has empowered transferees to gather information. However, the information may not always be accurate or appropriate. This up-front and broad education can make the job of the service providers a bit more difficult.”
But the study goes on to point out that “there is nothing like the high-touch service of a real person helping you through a tough life event like relocation. But cost pressures, advances in technology and a more tech-savvy transferee may one day drive the business to a completely self-service, online model. Or will it?”