The dynamic U.S. economy is spurring many companies to take a fresh look at their domestic employee relocation benefits and to assess whether they are supporting the company’s current talent management objectives. Perhaps more so than in the past, external events, demographic changes and other big-picture considerations are influencing mobility policy in 2024, and it is important to keep up with the trends influencing mobility programs across industries.
Understanding the impact of these trends, your company’s mobility policy best practices will be the policy elements most closely aligned with your corporate culture, business objectives and today’s workforce.
#1 Talent Shortage, Attrition and Changing Demographics
The war for talent might have peaked during the pandemic, but with the Baby Boomer generation retiring in large numbers and college enrollments dropping, many industries will continue to struggle to find qualified candidates.
Fewer children were born to Boomers and subsequent generations, leading to a shortfall of younger workers to replace retirees. Furthermore, despite being the largest population group, millennials often lack the academic credentials and experience to fill job vacancies. The National Student Clearinghouse Research Center reports a ten percent decline in college enrollment over the past decade due to falling birth rates, escalating tuition costs, and pandemic-induced financial difficulties.
Business immigration could be a solution to this demographic challenge. By welcoming skilled workers from other countries, the U.S. could fill the projected labor gaps. However, current U.S. immigration policies severely limit the number of workers who can immigrate for business purposes. For example, the cap for H-1B visas used by businesses to employ foreign workers in specialty occupations is currently set at 85,000 per fiscal year.
The prospects for changing these limits through Congressional action are dim. Immigration is a contentious issue in U.S. politics, and efforts to reform business immigration policies have often been met with resistance. Therefore, while business immigration could potentially alleviate the projected labor shortages caused by declining birth rates and an aging workforce, current immigration policies and the political climate make it unlikely that the limits on business immigration will significantly increase soon.
What does this mean for mobility programs?
The dwindling talent pool, employees’ resistance to relocate, and challenges in bringing remote staff back to the office are forcing companies to get more creative with their recruiting strategies and incentives. Mobility benefits are increasingly used as negotiation tools for new hires and internal transfers. Some employers even offer more generous employee relocation packages to attract talent to labor-deficient areas.
To stay competitive, companies should benchmark their mobility programs at least every two years, consider employee feedback, and ensure their programs reflect their corporate culture, industry norms, and the nature of the work itself.
#2 Working From Home / Remote Work / Hybrid Work
The advent of remote work has profoundly reshaped numerous industries globally. While ‘remote work’ generally signifies working from a location other than an employer’s office, it’s essential to differentiate between ‘working from home’ and ‘working remotely.’ The former implies a fixed location with a dedicated home office setup. Fully remote work can entail working anywhere in the U.S. or most of the world, and it can create compliance and duty of care headaches for employers.
Many businesses were caught off guard as the pandemic struck, lacking the technology and processes to support a 100 percent home-based workforce. Companies were compelled to adapt and innovate to maintain their operations or risk potential shutdowns. Fast forward to today, and a new difficulty arises. Many corporate leaders want their employees to return to the office, while the employees wish to continue to enjoy the flexibility of remote work.
This discordance has led to the rise of hybrid work models. These models are a compromise between the full-time office work that employers might want and the remote arrangements favored by many employees. According to the 2023 Atlas World Group Corporate Relocation Survey, hybrid work is predicted to surge by 81 percent in 2024, while exclusive work from home or remote arrangements are projected to decline by 19 percent.
What does this mean for global mobility programs?
The shift to anywhere work has significantly affected corporate relocations. Many fully remote employees choose to relocate voluntarily for lower living costs, proximity to friends and loved ones, or better work-life balance. More companies are creating mobility policies that accommodate these voluntary moves. When offered, company assistance often comes in the form of lump sum payments or small household goods moves.
For companies that have adopted hybrid work models, employees must live within a reasonable commute to their assigned office. Depending on the specifics of the in-office requirements, this might require a relocation or a business travel arrangement. Also, some companies consolidated their office space during the pandemic. Some employees who once lived close to an office location might need to relocate to meet the in-office requirement or be reclassified as fully remote workers.
#3 Focus on Flexibility and Adaptability
Younger generations of workers continue to drive change in the workforce. The evolution from Monday to Friday strict business attire to casual Fridays and giving one’s suits and jackets to charity was initiated and advanced by younger generations entering the workforce. Younger workers have similarly led the charge for greater flexibility in workforce policies, including mobility.
This flexibility and adaptability are vital to adjusting to changes and supporting all employees. Corporations that show flexibility and adaptability often have higher productivity levels, lower attrition, higher employee satisfaction, and more success in hiring new talent.
What does this mean for talent mobility programs?
Flexible and adaptable corporate mobility programs are vital to meeting the needs of a diverse workforce. Existing employees and new hires are pressing for tailored relocation programs and pushing back against traditional ‘use it or lose it’ benefits.
Offering choice in policy benefits signifies a company’s commitment to relocating employees and creates a more positive and successful employee relocation experience overall. Instead of a generic approach, customizable packages that cater to each employee’s unique needs promote cost control, transparency, and a positive employee experience.
#4 Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion (DEI) Movements
The ESG and DEI movements continue to influence many corporations, and the ideals embedded in them are essential to many current and potential employees and customers.
Environmental, Social, and Governance (ESG) refers to three central factors:
- The environmental component evaluates a company’s practices regarding pollution, natural resource conservation, and climate change mitigation.
- The social element assesses how a company manages relationships with employees, suppliers, customers, and communities, including its commitment to diversity, human rights, consumer protection, and animal welfare.
- The governance factor examines a company’s leadership, executive pay, audits, internal controls, and shareholder rights.
Diversity, Equity, and Inclusion (DEI) refers to a company’s commitment to promoting diversity in its workforce, ensuring equal opportunities for all employees regardless of their background, and creating an inclusive environment where everyone feels valued and accepted.
- Diversity involves considering and respecting all differences — including but not limited to race, gender, age, ethnicity, religion, disability, sexual orientation, education, and national origin.
- Equity is about fairness, which means providing everyone with the resources and opportunities to succeed.
- Inclusion fosters a sense of belonging by embracing and valuing each person’s diverse perspectives and experiences.
What does this mean for corporate mobility programs?
Companies are measuring, reporting, and improving their ESG/DEI performance and are demanding the same from the companies they do business with. Meanwhile, current and potential employees scrutinize how corporations meet their ESG/DEI responsibilities and often base employment decisions on whether an organization’s values align with their own. Companies that demonstrate a commitment to ESG/DEI principles, including within their mobility programs, often have an advantage in attracting and retaining top talent.
ESG/DEI efforts have encouraged the mobility industry to innovate and have led to initiatives such as the Discard and Donate program, more fuel-efficient transportation in the household goods industry, and increasing support for stress management during employee relocation. The mobility industry increasingly recognizes the importance of ESG/DEI factors to meet the expectations and values of employees and stakeholders.
#5 Greater Reluctance to Employee Relocation
The recent pandemic has left a lasting imprint on the American psyche, leading to a marked growth in reluctance to relocate. Amid lingering uncertainty, individuals have become wary about making significant life changes.
As a further disincentive to relocation, the housing market, characterized by skyrocketing prices and limited inventory, poses a formidable challenge for those seeking affordable homes in preferred locations. Rising mortgage rates further compound this issue, as many employees hesitate to relinquish their historically low mortgage rates. Some current homeowners fear buying a home in the new location will be impossible.
More broadly, the advent of remote work and increased flexibility has led employees to question the necessity of many corporate relocations. They might ask why they can’t do the new job from their current location. And as always, the emotional bonds with family and community serve as powerful deterrents to employee relocation, reinforcing Americans’ reluctance to move.
What does this mean for mobility programs?
As much as employers might like to cut relocation costs, now is not the best time. With all of the headwinds relocation faces today, a no-frills relocation program is unlikely to entice key talent to accept a corporate move.
Along with providing comprehensive relocation support, some of the other steps that employers can take to persuade employees to relocate include:
- Propose attractive salaries and benefits that reflect the new location’s cost of living.
- Consider offering flexible starting dates and a hybrid work schedule in the new location to ease relocation stress and promote work-life balance.
- Communicate clearly about the employee relocation process, including timelines and expectations.
- Include employees in decision-making to empower and help them feel more in control of the situation.
- Evaluate feedback from relocated employees to ensure the program meets employees’ needs. Make program adjustments to enhance future relocation experiences.
Ready to Talk Policy? Download TRC’s latest ebook, U.S. Domestic Relocation Policy Best Practices, to learn more about:
- New ways to make your employee relocation package both competitive and cost-effective;
- Relocation benefits that might be worth reconsidering;
- Steps to jump-start your corporate relocation policy review process; and
- How to improve your current domestic relocation policy to produce successful outcomes.
