December 11, 2020

The Pandemic Sparked a Wave of Relocations and Delocations. Here’s What That Means for Talent Acquisition in 2021.

relocation and delocation

The global economic crisis caused by COVID-19 has been well documented. Reduced workforces, closed offices, and a seismic shift of people leaving cities for more affordable suburban areas are just a few of the outcomes driven by the pandemic. Additionally, we’ve seen a growing number of companies shifting to long-term remote work models or closing their offices entirely.

The good news is that employers can leverage these trends to attract top talent from across the country — or globally for that matter — to their organizations. A recent report from my company, Motus, reveals that many organizations are already taking advantage of this unique moment to improve their talent acquisition efforts and position themselves to emerge stronger post-pandemic.

Short- and Long-Term Trends: A Sudden Talent Surplus + the Ability to Recruit Beyond Geographical Constraints

The talent pool is changing in both the short and long terms, and this is creating a rare window of opportunity for talent acquisition. Businesses are weathering a very atypical global economic disruption. As a result, many were forced to reduce their workforces. Where once companies struggled with talent shortages, we now have a sudden surplus of highly skilled, highly qualified candidates seeking employment.

Furthermore, candidates have welcomed the opportunity to work remotely. Many workers have been empowered to shed the high costs of living in major metropolitan cities and relocate to more affordable suburban areas. Specifically, 43 percent of urban dwellers have considered moving since the start of the COVID-19 pandemic, according to Motus’s report. An additional 22 percent of US adults have either relocated or know someone who has. This rate of relocation is much higher than that of previous years, and companies can anticipate this will be a long-term trend: 40 percent of Generation Z and millennial professionals reported they want to work in a geographically flexible way.

Employers who understand these trends and have decentralized their offices to adopt remote work policies are in the best position to benefit from the short-term talent surplus. They can expand their recruiting efforts to target a global demographic and onboard the most qualified candidates regardless of location. Many have already started to embrace large-scale remote work, with companies including Twitter and Shopify announcing they are making their operations fully remote either permanently or until further notice.

Delocation: A New Take on Remote Work

Other organizations are taking more creative approaches. Some companies have gone beyond simply embracing remote work to offer employees delocation packages, which provide new hires with funds to help them move anywhere they’d like.

Some organizations were particularly ahead of the curve in this regard. For example, the California-based Zapier began offering delocation packages in 2017, giving workers in the Bay Area $10,000 to move out of the city. The reasoning behind the delocation package was simple: Zapier recognized the cost of living in San Francisco had become exorbitant, and the company didn’t want to lose out on top candidates just because those candidates didn’t want to pay Bay Area prices for housing and other necessities.

This brings us to another benefit of having a formal remote work strategy: increased employee satisfaction. Motus’s research found evidence that remote work increases both employee engagement and retention. Despite the challenges of disrupted childcare and schooling, most US workers say they are at least as productive working from home as they were at the office. With the flexibility that remote work provides employees, companies like GitLab enjoy retention rates above 85 percent.

Reimbursement: An Overlooked Key to Making Remote Work a Success?

While delocating allows employers to access a global talent pool and expand hiring opportunities, maintaining a remote workforce can still be a challenge. To succeed, employers must establish policies that specifically support remote work.

One particularly important policy is reimbursement of employees for the expenses they incur for the business use of their personal assets. In today’s remote work environment, this includes assets such as mobile devices, internet, and home office expenses. It is important that employees do not carry the entire cost of those assets because they are used, at least in part, to the advantage of the employer. Furthermore, the federal Fair Labor Standards Act requires that employees earn at least the minimum wage after any necessary business expenses they incur to do their jobs. Some states also require employers to reimburse employees for all necessary business-related expenses, regardless of the employee’s wage.

Simply paying employees a flat stipend can lead to under-reimbursement or over-reimbursement, which creates “winners” and “losers” among employees. This is because salary requirements for remote employees may vary by as much as 30 percent due to living costs in different areas of the country. For example, the Motus report found that the cost of remote work in San Jose is 146 percent higher than the national average. On the other end, Raleigh is 6 percent below the US median.

Companies looking to capitalize on today’s talent trends should create labor-regulation-compliant policies that account for the costs employees incur when doing their jobs from home. This includes considerations like device costs, carrier fees, state and local taxes, device insurance, internet packages, mortgage or rent, utilities, and maintenance — all of which vary based on an employee’s unique location.

The relocation and delocation trends brought on by the pandemic represent an opportunity for workers to start fresh and move somewhere new, while companies are provided with the opportunity to attract top talent around the world. To take advantage of these emerging trends to the fullest, employers must put employees at the center of their talent strategies by embracing geographical flexibility and implementing geographically aware remote work policies.

Ken Robinson is market research manager at Motus.

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Ken is a market research analyst at Motus, which provides businesses with mobile-enabled workers and fleets with mobile workforce management software.