Even though relocation is part of corporate America, a study of major U.S. corporations by Merrill Lynch Relocation Management Division shows an increasing reluctance by many people to relocate, mainly because of a change in living standards, housing affordability and personal concerns.
Officials of MLRM, a division of Merrill Lynch Realty, conducted the study to determine the level of reluctance to relocate and pinpoint the reasons.The most frequently cited reasons for turning down a transfer were the difference between living standards (52 percent); moving from an area with declining home values and the impact on an employee's ability to purchase a new home (43 percent); age or status of children (40 percent); and spouses with professional careers (40 percent).
"Employees, when being asked to transfer, want to maintain their quality of life, if not improve it," said Timothy Thompson, MLRM senior vice president for marketing. "They also want to sell their homes profitably and buy new homes, which can be a challenge in today's real estate markets."
Thompson said personal concerns also are important when a person decides to relocate. "Employees are more conscious of how transfers will affect their spouses' careers and how their children will adjust to new friends and schools. Employees want stability in their lives, and addressing their personal needs in a relocation can help," Thompson said.
Of the 280 companies surveyed, 26 percent said first-choice candidates expressed reluctance or refused to transfer. Among companies reporting reluctance by employees to relocate, the average number of employees turning down a transfer in 1988 was 14 or 10 percent of the average of 138 employees transferred by these companies.
"We believe the level of reluctance or refusal is actually much greater since most relocation administrators work only with employees who have already agreed to transfers," Thompson said.
Officials in 70 percent of the companies surveyed felt refusing a transfer would affect their employee's careers. Only 6 percent felt their employee's career would be "greatly affected."
When the first-choice candidate refuses to transfer, the study showed it costs the company money in productivity loss for accepting a lesser-qualified candidate, lost time to find a replacement and costs associated with advertising for a replacement, interview time and travel.
Not only are the rank-and-file employees increasingly reluctant to transfer, but so are senior management officials, the study showed. Their basic reasons for not moving are family disruption, cost-of-living differences between areas, roots in the community and finances.
In 53 percent of the companies with employees reluctant to move, exceptions in the relocation policies were made to encourage people to move, the study showed. Exceptions included a cash bonus or salary increase above the amount offered for the position, cost-of-living adjustments, extended temporary living and mortgage assistance.
In 28 percent of the companies with people reluctant to move, 28 percent made no exception to their relocations policies and 36 percent felt additional benefits were unnecessary since transfers represented advancement opportunities.
Of the 208 companies surveyed that didn't report any reluctance by employees to transfer, 57 percent cited generous relocation benefits; 30 percent said a transfer always means a promotion and better pay; 10 percent said their employees expect to be transferred during their careers; 8 percent move employees only to desirable areas; and 6 percent only transfer personnel who have volunteered.