The percentage of people moving for new jobs fell to a near-historic low in the second half of 2011, according to a recent report, as the housing bust kept many Americans essentially trapped in their homes under the weight of their mortgages.
The report, from the outplacement firm Challenger, Gray & Christmas, noted that corporate relocation assistance, once relatively commonplace, is increasingly unusual in a market where so many homeowners owe more than their property is worth.
"The labor markets are not tight enough yet to compel the vast majority of employers to cover the cost of relocation for new hires," the report states. "So, for now, many people are stuck."
It's not just new hires, either: Employees already on the payroll are facing the same problem. Before the housing bubble burst, companies were much more inclined to offer generous mobility packages when an employee was transferring from one corporate location to another, say industry experts. Benefits varied widely, but many employers covered the cost of a house-hunting trip, paid for a moving van or put the employee up in temporary housing in the new town until a more permanent arrangement could be found.
Companies would also, in many cases, help cover expenses if new or transferred employees had to sell their old house at a loss. It's this form of assistance that has fallen off the most since the housing crash, say experts, because so many homeowners have seen property values plunge in recent years.
"The company's just not that generous in offsetting that loss on sale, as they've previously done," said Peggy Smith, chief executive officer of the mobility industry group Worldwide ERC. "Organizations just can't afford to do that."
The pullback on relocation assistance comes at the same time that corporate profits have surged to record highs, and cash holdings at U.S. companies have risen to as much as $2 trillion. Still, the expense is the most frequently cited reason for companies dialing back their relocation packages to more conservative levels, especially since the implosion of housing prices erased so much value from homeowners' asset books.
"There was definitely a shift in attitudes," said Ellie Sullivan, vice president of marketing and consulting at Weichert Relocation Resources. Companies "can't necessarily afford to pay the premium level of relocation benefits," she said.
It's a change that spells trouble for homeowners, because renters can more easily follow a job to a new location and have fewer expenses associated with doing so.
In 2010, the average relocation cost for an existing employee who was also a homeowner was $90,081, according to a study from Worldwide ERC. The average moving cost for an existing employee who rented was just $23,497. A similar cost disparity existed for new hires: Homeowners cost an average of $69,020 to relocate, while renters cost an average of just $20,168.
As a result, companies may be more likely to offer relocation assistance to renters than homeowners, said Scott Sullivan, an executive vice president at Brookfield Global Relocation Services. If a position opens up that requires a move, and two employees are equally qualified for it -- a homeowner, especially one struggling with a mortgage, and a renter -- the renter stands a better chance of being reimbursed for some or all moving costs.
"They ask you, 'Are you a homeowner or a renter?'" said Scott Sullivan. "They're actually finding people within the company who don't own homes."
An employer's financial help can mean all the difference at a time when many Americans lack the savings to pay for an expensive move on their own. A homeowner who won't receive relocation assistance from an employer or potential employer may miss out on the opportunity to move into a new position -- or to leave the ranks of the unemployed and join the workforce, no easy task when 13 million people are looking for jobs.
"There's people saying, 'I can't relocate, I can't do this unless you're going to pay this,'" said Scott Sullivan. "You've got people in areas of the country where there aren't jobs unable to move to parts of the country where there are jobs, because they can't afford to move."
Many firms are still willing to pick up the tab for employees in senior positions, industry experts say. But for junior and midlevel workers, relocation assistance is far from a sure thing, especially in certain sectors.
In retail and consumer services, according to Smith, "if [assistance] is being offered, it's being offered to the C suite" -- meaning employees at the executive level.
For everybody else, said Ellie Sullivan, "you're very much seeing that one policy doesn't fit all."