US companies are more willing to relocate employees to fill job vacancies, according to people who handle such moves for large corporations, in a sign that the sharp slowdown in migration triggered by the recession may be easing as the economy gains steam.
Companies that specialise in corporate relocations said they were seeing double-digit increases in their businesses compared with the same period a year ago. They added that corporate relocations, of which half are typically new hires, are far outpacing more modest gains in other types of moves such as those by members of the military or government employees.
Migration plummeted during the recession and is at its lowest level since the second world war, according to the US Census Bureau. Long-distance moves, which tend to be a barometer of employment, have remained especially depressed despite an upturn in the economy, largely because of sharp home price deflation that has handcuffed many people to their residences.
Home prices reached a new low in the first quarter and have fallen back to levels not seen since 2002, according to data released this week. More than 28 per cent of US homeowners owe more on their properties than their homes are worth, and these people are one-third less likely to move than borrowers who have equity in their homes, said Joseph Gyourko of the Wharton School of the University of Pennsylvania.
One executive recently had to turn down a job with a national food service chain that would have required him to move from Tennessee to Massachusetts because he had negative equity of $100,000 on his mortgage and the prospective employer would not indemnify him against the loss, said Jill Heineck, a relocation consultant.
But Ms Heineck also said that such examples were far less common today than they were a year ago. Relocation packages now include property management services that help people rent homes they do not want to sell, she said. Alternatively, more companies are pre-screening to weed out candidates who are locked into real estate.
“If you are considering someone for a job, one of the first questions a company asks today is, ‘What do you owe on your house?’” Ms Heineck said.
Peggy Smith, the chief executive of Worldwide ERC, a trade group for relocation experts, said housing was still an impediment causing many who relocate to rent instead of buy.
Some of the pick-up is being driven by the long-term unemployed, for whom the prospect of a job outweighs a loss on real estate, executive search experts said.
“A year or two ago, people were reluctant to sell their house at a loss,” said Tig Gilliam, the North American chief executive of Adecco, the placement agency. “Now there is more of a willingness to move to where the jobs are.”