The percentage of job seekers relocating for new positions climbed to its highest level since 2009, as rising home values and the improving job market made it easier to pull up stakes. Increased mobility among job seekers could help accelerate the recovery and provide relief to some employers struggling to find local talent, according to global outplacement and coaching consultancy Challenger, Gray & Christmas, Inc., which released the report on relocation Thursday.
The percentage of unemployed managers and executives relocating for new jobs in the first half of 2013 climbed to its highest level since the beginning of the recession, according to new data released Wednesday by global outplacement and coaching consultancy Challenger, Gray & Christmas, Inc. The rising relocation rate is further evidence of an improving housing market and regional employment gains.
On average, 14 percent of managers and executives moved for new jobs through the first two quarters of 2013. That was more than double the 6.7 percent who relocated for employment during the same period of 2012. The first-half average is the highest since the first two quarters of 2009, when an average of 16.3 percent of managers and executives pulled up stakes and moved for employment. Continue reading
With the recent report on home prices showing the biggest year-over-year gain in more than six years, one employment authority predicts a surge in relocation by job-seeking homeowners in 2013, which could ultimately help to accelerate the decline in unemployment rates.
“One factor that has kept unemployment rates high has been the inability of underwater homeowners to relocate for employment opportunities. With home prices bouncing back, even those who may now simply break even on a home sale might consider moving to a region where jobs are more plentiful. This could spark a more rapid decline in the unemployment rate over the next year,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas, Inc.
As of December, there were still more than 130 metropolitan areas where the unemployment rate stood at 8.0 percent or higher and nearly 50 where the rate was at or above 10 percent, according to data from the Bureau of Labor Statistics. Meanwhile, there are about 20 metropolitan areas where unemployment is below 4.5 percent.
“It is likely that employers in these low-unemployment regions are actually struggling to find available workers with the skills need to fill job openings,” said Challenger.
Two Reports Illustrate Housing’s Importance to Job Creation
Two news stories this morning illustrate the daunting challenges the economy continues to face on the road to recovery. First, a New York Times article points out that the Obama Administration was too slow to address the housing market crisis, which has been a major drag on the economy. Meanwhile, a report from the Federal Reserve Bank of New York estimates that about one-third of the jump in unemployment from 5 percent to its 10 percent peak in October 2009 can be traced to a mismatch between the supply of labor and job openings. The remaining two-thirds of the increase is due mainly to a lack of demand. The two reports are more related than one might imagine. “If you fix the housing crisis, you fix the job market,” says employment authority John A. Challenger, chief executive officer of Challenger, Gray & Christmas. “Both the skills mismatch and lack of demand can be traced back to ongoing weakness in the housing market. Job seekers cannot relocate to where the job opportunities exist because they are tied down by underwater mortgages and little savings to fund a move. Meanwhile, the lack of home buying is stifling demand for consumer goods and services. When people buy new homes, they also buy new TVs, washers and dryers, refrigerators and furniture. The lack of demand for these big-ticket items translates to a lack of hiring.” Should the Administration and Congress have done more to help home owners and the housing market? What can be done now to accelerate a housing market recovery? What other factors are leading to continued weakness in hiring?
After rising to its highest level in nearly two years during the first half of 2011, the percentage of job seekers relocating for new positions dropped to a near record low to finish out the year. The latest data provides further evidence that one of the biggest obstacles to economic recovery could be the lack of mobility among the nation’s unemployed.
Over the last two quarters of 2011, an average of just 7.5 percent of job seekers finding employment relocated for their new positions. That is down nearly two points from an average relocation rate of 9.4 percent in the first two quarters of the year. It was slightly lower than the same period in 2010, when 7.7 percent of job seekers relocated for new positions.
The relocation data released by global outplacement and executive coaching consultancy Challenger, Gray & Christmas, Inc. is based on a quarterly survey of approximately 3,000 job seekers, many of whom are managers and executives, from a wide range of industries and occupations nationwide.
“It appeared that relocation was beginning to bounce back after plunging in the wake of the housing market collapse and the deep recession that followed. However, the latest numbers indicate that picking up stakes remains a last resort for the majority of job seekers, many of whom are unwilling to take a loss on the sale of a home for a position that may or may not last,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
The percentage of job seekers relocating plunged in the wake of the housing collapse. Since the fourth quarter of 2009, the quarterly relocation rate has averaged just 7.9 percent. In contrast, an average of 15.7 percent of job seekers relocated for new positions each quarter in the pre-recession period from 2005 through 2007. Even during the onset and throughout most of the recession, from 2008 through the third quarter of 2009, the relocation rate averaged 13.2 percent.
Relocation Surges to Near Two-Year High
9.4% OF JOB SEEKERS RELOCATE FOR NEW JOBS IN FIRST HALF OF 2011
Download the report here.
The percentage of unemployed managers and executives relocating for new positions jumped to its highest level in nearly two years, possibly signaling increased willingness by job seekers to take a loss on the sale of their home. Similarly, the increase may indicate willingness by employers to help the newly hired relocate.
Over the first two quarters of 2011, an average of 9.4 percent of job seekers finding employment relocated for their new positions. That is up from an average relocation rate of 7.6 percent during the same period a year ago, according to the latest Challenger Job Market Index, a quarterly survey by global outplacement consultancy Challenger, Gray & Christmas, Inc.
The percentage of job seekers relocating plunged in the wake of the housing market collapse. Beginning with the fourth quarter of 2009 through the end of 2010, the quarterly relocation rate averaged just 7.5 percent. In fact, the 7.5 percent rate averaged in 2010 was the lowest annual average since the firm began tracking job-seeker relocation in 1986.
“The 9.4 percent relocation rate in the first half of 2011 is still low by historical standards, but the increase does indicate that job seekers are finally beginning to loosen the stakes that have kept them tethered to a specific region,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
Prior to the recession, job seekers were significantly more open to relocation. From the first quarter of 2005 through the third quarter of 2007, just before the recession began, an average of 16.1 percent of those finding employment each quarter relocated for the new positions.
Relocation began to sink along with the economy in the last quarter of 2007. From the fourth quarter of 2007 through the end of 2008, the average relocation rate dropped to 11.5 percent. It rebounded to an average of 15.3 percent over the first three quarters of 2009, only to fall off a cliff at the end of 2009 through 2010, when the housing market continued to weaken, even as other segments of the economy began to slowly improve.
“Since there has been little improvement in the housing market in 2011, one might conclude that the increased relocation in the first half of the year is due to the fact that prolonged unemployment is compelling more job seekers to relocate, despite the challenges of selling a home in this market. At some point, the job seeker may simply conclude that it is worth taking a loss on a home sale to get back on the payroll,” said Challenger.
“Banks have also been a little more willing to work with financially distressed homeowners on renegotiating the terms of the mortgage, making it possible for the unemployed to sell their home and relocate.”
According to Challenger, the employment situation is beginning to slowly improve in a growing number of cities across the country, which may keep relocation rates relatively low in the coming quarters as job seekers are better able to find positions without moving.
“However, at the moment, there are definitely parts of the country that are recovering faster than others. Job seekers who are willing to expand their searches to other states and cities are significantly improving the chances of success by opening themselves up to a much wider number of opportunities. Basically, when you cast a wider net, you are more likely to catch more fish,” he said.
The latest data from the Bureau of Labor Statistics show that in June 26 states saw nonfarm payroll employment grow, with the biggest gains coming in Texas, California, Michigan and Minnesota. Between those four states alone, payrolls experienced a net gain of 92,000 new workers.
As of May, according to the Bureau’s latest data on metropolitan employment, 42 cities had unemployment rates below 6.0 percent. Another 49 had unemployment rates between 6.0 percent and 7.0 percent.
“Texas may be one of the best targets for job seekers considering relocation. It is booming right now, thanks to having a good mix of the types of industries that are currently doing the best in this recovery, including technology, health care and energy. They are luring employers from other states with low taxes and other incentives, so it will need to continuously expand its available labor force,” said Challenger.
“The job market in Texas and other states are expected to continue improving in 2011. However, if these state economies improve faster than their housing markets, current relocation rates will be unable to provide enough supply of workers to meet demand. This could ultimately be the biggest obstacle to achieving lower unemployment,” warned Challenger.
“Demand for new workers is not at a level that would force companies to bring in talent from outside their region. However, as the local talent pool starts to become depleted as the economy improves, companies will be compelled to cast a wider recruiting net. Unfortunately, the immobility of the workforce may mean that some employers will have to delay expansion plans, thus slowing the recovery,” he said.
“There have been a few examples of employers paying for the most talented candidates’ relocation costs, including covering any losses incurred by selling a home that is under water. However, those examples are few and far between, as most companies continue to keep a tight rein on costs.
“As the economy continues to improve, more large companies might have the financial ability to increase their relocation budgets and help offset the difference between the home value and selling price. However, small- and medium-size companies, where most of the new job growth is expected to occur, probably will be unable to cover the costs of relocation and make up for a candidate’s lost home value,” said Challenger.
The Challenger Job Market Index is based on a quarterly survey of approximately 3,000 job seekers, many of whom are managers and executives, from a wide range of industries and occupations nationwide.
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Percentage of Job Seekers Relocating
1986 – 2011
Q1 Q2 Q3 Q4 ANN AVG
1986 45.0% 43.0% 40.0% 39.0% 41.8%
1987 37.0% 32.0% 34.0% 35.0% 34.5%
1998 37.0% 36.0% 34.0% 36.0% 35.8%
1989 35.0% 36.0% 31.0% 32.0% 33.5%
1990 30.0% 34.0% 31.0% 27.0% 30.5%
1991 30.0% 28.0% 26.3% 21.0% 26.3%
1992 30.2% 28.3% 28.2% 20.5% 26.8%
1993 36.4% 49.2% 30.5% 25.0% 35.3%
1994 20.5% 21.3% 15.5% 24.7% 20.5%
1995 17.1% 17.2% 20.4% 24.1% 19.7%
1996 19.4% 20.5% 29.1% 24.1% 23.3%
1997 19.8% 21.5% 18.7% 20.1% 20.0%
1998 18.3% 27.1% 23.3% 23.7% 23.1%
1999 25.5% 25.3% 22.4% 25.9% 24.8%
2000 20.4% 21.6% 23.5% 26.2% 22.9%
2001 17.1% 16.6% 17.3% 17.0% 17.0%
2002 14.0% 12.1% 15.8% 15.2% 14.3%
2003 15.1% 14.9% 12.9% 12.7% 13.9%
2004 13.2% 16.5% 14.9% 14.2% 14.7%
2005 16.0% 16.4% 16.2% 15.2% 16.0%
2006 16.4% 18.2% 16.1% 15.4% 16.5%
2007 16.6% 15.4% 15.6% 11.0% 14.7%
2008 8.9% 11.4% 13.4% 12.6% 11.6%
2009 14.4% 18.2% 13.4% 7.3% 13.3%
2010 7.4% 7.7% 6.9% 8.4% 7.6%
2011 9.3% 9.5% 9.4%
Source: Challenger, Gray & Christmas, Inc.
The percentage of job seekers starting their own businesses or relocating for new positions fell to historic lows in 2010, according to a new report that attributes the declines to an increased aversion to risk-taking just as the job market begins to show some signs of life.
In its latest quarterly Job Market Index, global outplacement and executive coaching consultancy Challenger, Gray & Christmas, Inc. found that over four quarters of 2010, an average of just 4.7 percent of unemployed managers and executives started their own firms. That is down from an average of 8.6 percent in 2009 and is, in fact, the weakest start-up activity on record since the firm began its tracking in 1986.
The recession created a particularly difficult environment for would-be entrepreneurs. The previous record low for start-up activity among job seekers was 2008, when only 5.1 percent of former managers and executives started their own businesses.
Full Report: http://www.challengergray.com/press/press.aspx