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April 2008
Moving me, not
so Gently
By Ted Konnerth
As
a follow up to the March newsletter.. what exactly does it take to move someone
these days?
The answer is simple;... that depends...
It depends
upon many things, but the equity in one's house is a big factor. ALL new
employees 'leave something behind' when they take on a new job, that could be
forgoing their impending raise, or losing stock options, or losing their company
car, or changing benefit plans with differing deductibles or pension
contributions, etc. Moving to a new company is always about the future, the
chance to expand and grow and move closer to one's ultimate career goal. Most
new employees earn more money and a short term hit on a car policy or stock
options is worth the longer term investment. But then there's this little issue
about home equity...
Home ownership is consistently the number one asset
for most Americans. It represents their biggest 'nest egg' and largest
opportunity to cash out and move to a more modest part of the country for
retirement. It figures very heavily in most family retirement plans. Home
ownership generally assumes that the overall value will ebb and flow over short
periods of time but ultimately increase significantly, with equity increasing
due to appreciation and principle reduction. The ability to move to another
part of the country is heavily influenced by how much equity a family has, and
the ability to pull that equity out through either a quick sale or a bridge loan
that will cover the down payment on the new house for a short term until the
house does sell.
Reality today is that in several large markets the time
to sell has exceeded 1 year or more. Florida currently has an inventory of
unsold homes that exceeds 18 months, in some areas 2 years or more. Selling a
house is not necessarily linked to 'price' either. Granted, lowering your price
and accepting a smaller equity gain is logical and can be effective, but in many
markets, the requisite price to elicit a sale can very easily be below the
residual equity in a house, which means writing a check at closing and having no
ready cash to apply towards a new down payment. If you have no down payment,
then the probability of buying a home in your new community is unlikely
and despite making more money at the new company, you may literally be
financially forced to remain in your existing home, and job until the housing
market recovers.
For the next year or so or until housing returns to
'normalcy' we recommend amending relocation incentives to add some creative
solutions to attracting quality talent. Here are a few
suggestions:
-
Create a company loan policy for housing down payments. Offer
modest or near-zero interest rates and perhaps forgive loans if the employee
remains and contributes to the company for a period of time (5 years?).
-
Extend temporary living expenses to give them longer time to
sell their existing house.
-
Offer cash incentives to fix up the existing home or to
quick-sell the house.
-
Accommodate some flexibility in making the transition; working
from home for a period of time, more frequent return home visits, etc.
-
Bring back home purchases, which had virtually disappeared but
may be necessary again.
We anticipate more difficulty in
attracting quality talent throughout 2008, coupled with increasing shortages of
talent available to our clients. It's going to be a challenge for many
months, but creative solutions can often attract the right talent. In short,
let us help you craft those solutions to growing your
business.
We are the #1 recruiting
firm in the electrical/industrial industries. Isn't it about time you called to
find out...
...Why Us!?
To view our recent
newsletters click here: 'THE BUZZ' |
Survey Corner
Egret Survey of the Month:
Please take 13 seconds to tell us
your company's revenue predictions for 2008. We'll report the findings next
month!
Click
Here to take survey
Last month's survey results:
69.6% of our respondents reported that
"Sales" is the strongest area within their organization.
The weakest organizational areas
were reported as follows:
30.4% Marketing
26.1% Engineering
21.7%
Operations
13.0% Sales
Replies:
47.8% Distributors
47.8%
Manufacturers
4.3% Others |
