- Relocation rates remain historically low. Despite a recent bump, worker relocation rates are still less than 3%.
- Remote work offers more flexibility. The pandemic revealed how many jobs can be done remotely, perhaps permanently impacting relocation rates, particularly for younger workers.
- Relocation affects specific industries. Relocation benefits remain a tool for total rewards professionals to recruit top talent in hands-on industries such as healthcare and manufacturing.
After falling to a record low of 1.5% in the fourth quarter of 2023, the percentage of U.S. workers relocating for new jobs increased to 2.4% in the first quarter of 2024, according to a new quarterly report published by Challenger that surveyed 3,000 job seekers across the country.
In particular, the report noted the percentage of job seekers making more than $200,000 who relocated for work rose to 3.7% in the same period.
But even with this recent trend, the overall figure from the first quarter of 2024 still represents the third-lowest quarterly rate on record for employees relocating for work, which peaked in the late 1980s and early 1990s, when nearly a third of employees moved for new jobs.
The Challenger report pointed to company layoffs and return-to-office mandates as primary reasons for the recent escalation. The study’s authors predicted, though, that employers shouldn’t expect to see worker relocation becoming prominent again.
Remote Work Affects Relocation Demand
The pandemic revealed how many jobs could be done remotely — that genie is out of the bottle, stated the Challenger report. Younger workers, particularly millennials and those in Generation Z, prioritize job flexibility and work-life balance, which drives down the likelihood they’ll relocate for work.
Meanwhile, older workers are typically more established in their communities and more likely to own homes — which presumably were bought at historically low interest rates — making them generally less amenable to relocate.
“Since the post-pandemic era and the widespread adoption of technology and hybrid work arrangements, the way we work has undergone a significant transformation,” said Rebecca Starr, a national managing director for HR consulting at Gallagher, an insurance, risk management and consulting services firm. “As a result, relocation benefits and offerings have also evolved.”
Starr explained while employers tend to think of relocations as prompted by business need, the post-pandemic work environment has spurred a new trend — employees choosing to relocate for a higher quality of life, reduced living expenses or to be near family. In many cases, this choice exists because of the shift to remote work.
“For employees who do have the option to work remotely, they are being incentivized to move to certain locations where benefits are offered to those who relocate from out of state,” said Justin Sun, senior rewards manager at Expedia Group. “Some locations that are less populated may also offer incentives, such as student loan repayment assistance, to encourage workers to relocate, recognizing that the influx of new residents can help bolster the local economy and help businesses thrive.”
Relocation Benefits Reserved for Top Roles and Key Industries
For leadership or highly technical roles, conducting a national or international search enables HR leaders to access a wider talent pool. Incorporating relocation benefits into the total rewards strategy for these positions can help attract top candidates.
“While certain executive-level positions can be performed remotely, it is crucial to maintain executive presence and visibility, particularly in industries that necessitate in-person service or care delivery, such as healthcare and manufacturing,” Starr said.
Industries that require employees to be physically present to deliver their products and services are more likely to support relocation, such as hospitals that have a shortage of healthcare professionals or hotel companies that need staff to help open new properties, Sun said.
Roles that only require employees to have a laptop and internet to collaborate, such as those in tech, consulting, sales and marketing functions, are more likely to be flexible positions that allow employees to work when and where they want, he continued.
Build Unique Relocation Benefits Packages
In scenarios where employees initiate relocation, HR departments are approving relocation and affiliated benefits at higher rates, Starr said. In scenarios where employers initiate relocation, HR departments are moving beyond simple lump-sum relocation benefits and adopting employee experience-focused approaches.
A framework to offer flexible relocation packages could incorporate:
- Packing services
- Moving company and insurance coverage
- Home-selling assistance
- A house-hunting trip
- Temporary housing
- Auto travel reimbursement
- Family support
Such benefits can be covered in a variety of ways, including lump-sum payment, reimbursement, third-party arrangements, direct billing or a relocation tax gross-up.
“A framework that provides employees multiple housing choices and additional support if they have children, pets or elderly parents can help meet the specific needs of the employee and help them feel more comfortable with relocating,” Sun said.
In the end, it’s about what the individual employee prioritizes, he said.
“The financial and career development incentives associated with moving must outweigh the costs of not doing so,” Sun said. “These will be unique to the individual based on what they value at a particular stage of their life.”
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