Psychologists say it is the third most stressful event — after the death of a loved one and divorce — that a human being can endure: moving a family.
So when a company decides it must transfer an employee to another city, and frequently that it must do it in a hurry, reducing the stress, and safeguarding the value of what is probably the family’s key asset — its home — is a primary goal of both transferer and transferee.
“From the employee’s viewpoint, the key question is, `What level of support is the employer going to provide in the move?’ ” said Stephen C. Roney, president of Coldwell Banker Relocation Services in Mission Viejo, Calif. “And from the employer’s viewpoint, the key issue is ultimately one of productivity.”
The process these days is both commonplace and costly. According to a survey of 503 companies by Runzheimer International, a relocation-data collection company in Rochester, Wis., the companies surveyed reported an average of 155 relocations in 1994. The average cost to relocate a homeowning employee domestically was $34,700.
Dennis Taylor, a consultant with the company, said that a relocation to high-cost-of-living cities like New York and Los Angeles can add as much as 15 percent to the expense of a move.
While most corporations have policies that control benefits and assistance for a transferring employee, there are opportunities for employees to maximize the benefits and minimize the pain of relocation.
For example, employees may find it worthwhile to weigh the advantages of selling their homes themselves against the probably quicker and certainly easier option of having their company or its agent purchase the home from them.
Moreover, employees with working spouses — usually the case these days — or aging, dependent parents — might be able to negotiate for additional assistance from their employers.
Often the companies will turn to specialized providers of relocation services, providers that range from small, frequently geographically specialized concerns to real estate conglomerates that handle thousands of relocations each year and are responsible for orchestrating the tiniest detail of a move.
“Being relocated is very stressful and very demanding,” said Sylvia Ehrlich, the owner of Westchester Relocation Services, a company that works with executives moving into the area either as the result of an intracompany transfer or after being hired and relocated by a new employer.
“Usually, the companies will hire someone like myself to find out what the issues are for their transferring employees and how those issues can be addressed,” she said.
The relocation companies, Taylor said, are paid for their work in various ways. At times, a company will bid for a relocation contract, charging either a flat fee or a percentage of the cost of the relocation.
Companies also profit from brokerage commissions on the sale and purchase of an employee’s property — making the field especially appealing to national real-estate companies, a number of which have established relocation subsidiaries.
When Ciba Geigy decided to relocate Jean-Pierre Wolf from Switzerland to Tarrytown, N.Y., the company put Wolf and his wife, Elisabeth, in touch with Ehrlich.
“She showed us around and answered whatever questions we had,” said Wolf, a research manager for the drug company. “She even gave us a list of doctors in the area.”
Rick and Chris Irizarry were also referred to Ehrlich by Ciba Geigy, where Irizarry now works as a marketing manager.
The Irizarrys are veteran relocators, having moved five times during their 18-year marriage and many times more as the children of military officers. Even years of experience, though, don’t guarantee a stress free move.
“As far as moves go, this was the hardest one we’ve ever made,” said Chris Irizarry, referring to the couple’s recent relocation to Somers, N.Y., in Westchester County, from Raleigh, N.C. The reason the move was so difficult, she said, can be summed up in one word: “Teen-agers.”
Aside from the obvious issue of finding good schools, good doctors, good dentists and good reasons for teen-age children to feel comfortable in their new surroundings, the Irizarrys had — like almost every relocating family — some special circumstances.
“Our son is a competitive soccer player,” Irizarry said. So to the list of ordinary concerns associated with a move, the Irizarrys had to find a soccer coach for their son, something that Ehrlich was able to accomplish in fairly short order through a local high school soccer coach.
One problem relocating employees often encounter is sticker shock. Sometimes, home prices in the new location are a pleasant surprise, and couples find they can buy more house than they owned before for less money. Other times, however, they’re not so lucky.
“I went into some houses that were close to half a million dollars that didn’t compare to what we had in Raleigh,” Chris Irizarry said. “There, we had five bedrooms, three-and-a-half baths and an in-ground pool, and we ended up selling it for $240,000.”
The house the couple bought in Westchester County — which had four bedrooms and two baths — cost $365,000.
“And we got it at a bargain price,” Chris Irizarry said.
Westchester Relocation Services, the company that assisted in the Irizarrys’ relocation, might be considered a relocation boutique in that it provides highly personalized services in a defined geographic area for a relatively small number of corporate clients.
In the not too distant past, however, even small relocation companies were not considered necessary for a company to transfer an employee.
“Many times it was relocation by open checkbook,” said Lynn Holmes, director of outsource development for Prudential Resources Management, a relocation services company in Valhalla, N.Y.
“An employer would say, `Hey, Howard, we need you in Dallas.’ And Howard would say, `OK, I need this much money to move,’ and the company would write out a check.”
In recent years, however, corporations began to realize that handling employee relocation in-house was costing the company both the actual price of the move and the loss of productivity that accompanied it.
As a result, companies started to turn to outside contractors for help with their relocation programs. And, because some corporations prefer to deal with one supplier rather than several boutiques, many of the larger companies turned to relocation megastores that offer the same personalized services but on a worldwide basis.
Other things have changed, too.
Not too many years ago, an employee who was asked to relocate to a new city would usually be given an offer he — and it was mostly “he” then — couldn’t refuse: a promotion, a pay raise, a relocation allowance and an implicit guarantee of company loyalty in exchange for his loyalty as a company man.
Gone, of course, is the notion that executives on the move are men; today, one in five executives being relocated are women, and the majority of male breadwinners being relocated have a spouse who is a breadwinner, too.
Also, employees are less frequently “asked” to relocate these days — increasingly, relocation is considered a condition of continued employment.
Gone, too, in many cases, are the guaranteed promotions and pay raises that used to make relocation a bit less traumatic. Many corporate relocations are now lateral transfers that occur when an entire department is packed up and sent to a new city.
The primary objective in any employee transfer is to help the transferee find a place to live in his or her new location. When the employee is not a homeowner, that usually means finding a suitable apartment at the new location, then making arrangements for movers to get the employee’s personal belongings there at about the same time as the employee.
When the transferee owns a home, however, things get more complicated.
“Clearly, the most expensive part is the disposition of the home at the old location and the costs associated with that,” said Roney of Coldwell Banker. “The employee needs the ability to access the equity in the old home because most people don’t have the liquidity to buy another home until the old one is sold.”
Many corporate relocation programs make some provision to free up the employee’s equity — either by providing a bridge loan or by an outright purchase of the employee’s house.
Some companies make some provision for bonuses to the employee if the employee sells the home within a certain time period.
George T. Watson, president of the Employee Relocation Council, a relocation industry trade organization in Washington, said that most companies that move employees have some kind of “structured relocation policy” in place.
And while such policies are intended to cover as many elements involved in a relocation as possible, Watson said, “some things may be negotiable.”
Beverly Berberich, corporate relocation manager at SC Johnson Wax in Racine, Wis., explained why corporations devote such attention to employee relocation.
“One of the things that has become critical is having the right person in the right place at the right time,” Berberich said. “When a job opens up, you have to fill that job very quickly, but it needs to be done in an efficient, cost-effective and caring manner — that’s the critical role of relocation.”
