Companies More Willing to Pay Relocation Costs for Top Talent
Employers are increasingly willing to spend money on relocation fees to attract prospective talent, even it if means a significant rise in costs to their business, a new study shows.
In a survey of 2,417 hiring managers and human-resources professionals, one-third of respondents said their companies have paid to relocate employees to their cities in the past two years, according to CareerBuilder.com and Apartments.com.
The number of employers willing to pay to relocate an employee this year has increased by 14 percent, compared to last year. At least one-third of respondents said they would spend more than $2,500 to relocate an employee, while one in 10 employers said they are prepared to spend more than $10,000.
In a separate survey of 343 small-business owners conducted by SurePayroll, 92 percent of respondents said they noticed an increase in their business costs this year. Thirty-eight percent of respondents cited employee salaries and benefits as the top factor driving up their costs. In fact, according to the latest SurePayroll "Scorecard," a monthly economic indicator of small business, salaries have been increasing for the past 23 months.
"It's getting increasingly tough to find good people, and the resulting labor shortage has driven up costs," Michael Alter, president of SurePayroll, a Chicago-based small-business payroll firm, said in a statement. "Regardless of any financial struggles small-business owners face, they must continue to offer highly competitive salaries and benefits to attract and retain the kind of quality employees necessary to keep their businesses running."
John Recker, vice president of Libby, Perszyk, Kathman -- a design and branding agency based in Cincinnati -- knows all too well how important it is attract top candidates from the design field. As the chief strategy officer and manager of international operations at LPK, Recker oversees recruitment and is involved in negotiating relocation packages with prospective employees.
Because LPK considers itself part of the top tier for the design craft, Recker said, "It's important that when we look for resources, that we are not limited by geography. We need to be able to go out and find the talent where the talent is." And at LPK, that doesn't just mean combing the United States for job candidates. The company's reach extends to international markets and the ability to recruit employees from diverse backgrounds is essential to the kind of workplace experience they aim to deliver.
Recker also pointed out that relocation packages are typically offered for more senior level, specialized positions, which requires the company to conduct a broader search. He added that there are many variables that go into relocation fees, such as changes in the cost of living in other states, and even tax burdens or currency values in a candidate's country of residence.
However, Recker said he rarely has to entice candidates to consider moving to Cincinnati. "This market has matured greatly in terms of its recognition for design and innovation," he says, and many employees find the lower cost of living, the Midwest location and the education options attractive.
In fact, the Careerbuilder.com and Apartments.com survey found that it is not uncommon for employees to relocate for a job. Of 5,727 full-time employees surveyed, 42 percent said they've relocated to another city at least once in their professional career, while an even greater number -- 59 percent -- said they'd be willing to do so for a new job. In terms of where employees are willing to move, the top five states that respondents say they would like to move to are Florida, California, Arizona, North Carolina, and Colorado.
While Ohio may not be one of the top relocation states, Recker said the cost of offering a competitive relocation package is insignificant compared to the value of having a top-notch employee -- which may help explain the growing willingness among employers to foot the bill. "People are our capital, they are what drives our business, and they ultimately add value to our clients," Recker said. "When we pair good strategic talent with principles that our organization has built, that adds tremendous value."