| As more and more companies return to a hiring mode, managers around the region are asking the question "Do I want to budget for relocation?" From my perspective in 24 years of recruiting, my answer in almost every situation is a resounding, NO!
Let me explain the pitfalls I have seen in relocation scenarios. Of course, the eventual goal is always to get the best employee possible. The argument that if you look nationally you increase your potential candidate base makes sense in an abstract reality. In practice however, there are serious pitfalls to relocations. These problems, even without factoring cost into the equation, often lead to unforeseen problems. These problems can turn the theoretical best candidate into the worst candidate very easily.
First, let’s consider our region. Most people getting this newsletter work in companies that are located smack dab in the middle of one of the most diverse markets in the country. Virtually every industry is well represented here, which means virtually every skill set is well represented here. Wherever you are in the region, if you draw an hour circle around your location you should have upwards of 1,000,000 people living there. One way to look at this is if you can’t find an exceptional candidate within a 1,000,000 people, maybe the problem is the job description not the candidate pool.
But, for the sake of argument, let’s pretend that you want a national search and the best person comes from St. Louis. You’ve interviewed him, he’s great, and he says he will relocate, you have the budget. How can this go wrong? Well, let me count the ways.
I’ve looked at hundreds of thousands of resumes over my career and some trends have become obvious. I think that employment is not the main driver in where people live. Family issues, climate, regional culture, cost of home ownership and life style are all factors. These factors affect the relocation process in different ways but they all confuse the decision. When you interviewed this person from St. Louis, you saw just the tip of the iceberg. Sure, he sat there and said he would relocate and he loves the job, but what you didn’t see was his 11 year old son who just made JV basketball, his wife who would rather move to Phoenix to be near her family or his daughter who has never experienced a truly cold winter. Also, he has never seen anything like the Schuylkill Expressway. He also doesn’t yet know that the house that cost him $110,000 in Missouri will cost $250,000 in our area. I think you see where I am headed. You just spent $2,500 just to interview this fellow. You are about to extend him an offer that includes an expensive relo package. He may sound like he is accepting the offer and he may, in fact, do so. But, I think that almost 20% of these acceptances result in no starts. The candidate goes home and runs into family resistance that is virtually insurmountable. In a situation like I’ve described, don’t be shocked to get a call a week or two later and hear that he can’t accept the job. Instead he has found something local or is moving to Phoenix to be near his wife’s family. Ouch.
Now, let me give you a worse scenario. This fellow actually starts but starts with all the family issues following him here. For a while the family stays in St Louis and his focus is understandably torn between two locations. After 3 months, they finally move here and you breathe a sigh of relief. Don’t relax yet. I’ve seen 100’s of these situations result in the person and their family moving back within 2 years. They miss friends, hate the weather, don’t like the pace of life (too fast/too slow, etc) or want to be near family (sick parents, new grandchildren, etc). What good does it do you to hire someone, move him or her here and have him or her leave a year later.? The worst of all possible worlds.
Not all relos fit that category. Sometimes, it works for you not against you. In 2003, I placed three people who wanted to move BACK to the area from elsewhere in the country. Each one had either just had children and wanted to move to our region to be near family or were getting married and wanted to return to the area. How would you like to be the manager who had moved them to North Carolina or Illinois originally? Let’s face it, there are some companies nationally in areas that require relo and some that are more centrally sited. If your company is in Maine, there may not be a skilled labor pool to draw from. If you are in Lansdale, PA there are over 1,000,000 people within an hour’s drive of your facility. Working a little harder to troll your local candidate base might get you someone as good and/or someone who will have a more long-term commitment to your company.
There are other reasons companies relocate new employees. Sometimes companies relo people for the "vanity effect". It’s nice to be able to say that you scoured the world for talent but, except in very unique situations, I think that’s a bunch of rhetoric. Without naming names, there was a large telecomm firm in the area that over the last 3 years virtually imploded. This put 1,000’s of engineers on the street. Almost 50% of the resumes I saw from there were entry-level MS or PhD’s relocated from all over the world, at great expense. Looking at the jobs these people held at that firm, one could easily conclude that this company could have hired a local person, Drexel/Lehigh/NJIT, etc to do that job instead. They didn’t. They thought it looked better to have a newly minted PhD on staff rather than a 3-year experienced Drexel grad. A lot of good that did them in the end.
And then, there was the more interesting relocation plan concocted by a manager of a DBA group at one of the regions largest technology firms. About 3 years ago HR contacted me in that firm to fill 5 Oracle DBA slots. Their internal efforts to find someone ended up with the manager complaining about the poor quality of people he was seeing. The hope is that my recruiting efforts would show a better quality person, thus pleasing the manager. Well, after 2 months and 10 interviews, none of my people were good enough either. The search was called off while the manager took his 2-week vacation back to his home country. Lo and behold, on his return he tells his HR people that he interviewed candidates while back home and wants to hire people from there as contractors. A little research showed that the person owning the contract firm was THE MANAGER. He was going to bring these fellows over in a group, house them in one apartment and bill his own company for their services. Now we knew why no one locally was any good. None of them would take a contract job at $20/hr while working for a company that billed $70/hr. I don’t know what happened at that point because it got way too complex for me.
Here are the types of relos that I would consider. People who have ties here (family, friends, etc). People who are moving to a similar region where the housing differential makes sense. For example, someone moving from North Jersey to West Chester, PA should not experience severe culture shock and should be pleased at the cost of housing. The reverse may not be true however. Simple relos make sense too. Apartment dwellers for example. In general, keep in mind that the more complex the relo issues the less chance of long term happiness.
So, when interviewing candidates from outside the region, don’t forget to question them about issues that are broader in scope then classical employment. What type of lifestyle are they and their family looking for in a region? Housing costs? Climate? Pace of life? Just make sure that you and the candidate are fully informed about how this change will affect them outside the workplace. You get the idea. The more info they have, the more assured you can be that the hire will be a good one over the mid to long term. Just because they are saying the right things in the interview and nodding like a bobble head doll, it doesn’t mean their wife will be happy 1,000 miles from her mother.
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