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| 3 minutes read

How to make the most out of your "de-location" program

According to research from Tech Domains, 83% of millennials (ages 24 to 40) living near a major tech hub plan to or are considering a move to a more affordable city due to the COVID-19 pandemic, compared to 73% of Gen Xers.

While not a new concept, "de-location" is something more and more companies are considering in order to save costs and retain talent. There is no question that moving so many employees to remote work-from-home (WFH) situations due to the pandemic has ushered in a new perspective and is making companies re-consider moving jobs to people (or with people), as opposed to moving people to jobs.

According to McKinsey research, 4 out of 5 people reported that they enjoy working from home, while almost 70% felt they were just as or more productive than they were at the office. Eliminating commutes has allowed for greater flexibility to balance personal and professional lives. There is a large population of workers who feel they are thriving, and companies that want to attract or retain these people may need to provide WFH as an option, long after the pandemic has passed.

Prior to the onset of COVID-19, employees in many high-cost cities were already challenged to accept or keep positions due to high rental and real estate costs, so the idea of getting out of these locations and working remotely from somewhere else is hugely attractive to many workers. For an employee departing San Francisco or New York City, they could shave thousands of dollars off their monthly housing costs!

Looking at this situation, many organizations see an opportunity. They believe that they can access new pools of talent with fewer locational constraints, keep existing talent who are disenchanted with their current work location, adopt innovative processes to boost productivity, create an even stronger culture and significantly reduce real-estate costs by offering employees the opportunity to "de-locate." Jack Dorsey, the CEO of Twitter, said the company was already working on "decentralizing" its workforce before the coronavirus outbreak.

In a new article for Forbes, Elana Gross explains that Stripe is offering a $20,000 bonus to employees who relocate to less expensive cities, but it does comes with a pay reduction. Stripe employees based in San Francisco, New York City and Seattle are now eligible for the bonus, but they will take a 10% pay cut. With these cities representing some of the most expensive rental markets, fewer employees coming into the office down the road could mean big savings in rent for companies, as they can downsize on office space. For companies that had already been transitioning to greater percentages of remote workers, it makes sense to give people what they want, especially when it results in an overall cost reduction. According to Forbes, companies like Facebook, Twitter, VMware and ServiceNow have said they’ll take a similar approach as Stripe.

Need more convincing that a de-location policy could be a valuable talent management strategy? This article from Medium walks you through exactly, "Why Companies Should Offer Employee ’De-Location‘ Packages." Here are some of the main reasons:

  • It's low maintenance.
  • It makes financial sense for everyone.
  • It's a good way to attract and retain top talent.
  • There is a housing crisis in tech hubs.

However, if we have learned anything over the last 50 some years, it’s that relocation is not easy. You can toss people a chunk of change (i.e. lump sum), but there is a reason why many companies partner with relocation management companies (RMCs) to provide services and coordination, besides financial support for taking on the endeavor of relocating.

What if you could make the de-location for these employees dramatically easier and more organized, without adding dramatic cost? An RMC can:

  • provide the employee with a technology solution that was designed specifically for situations just like this,
  • provide access to trusted and quality service providers for any need an employee and their family would have in the moving process,
  • take on a bunch of questions and batch of stress that would usually funnel back to HR representatives and managers,
  • support an employee with the budgeting and planning that a project like this can require,
  • dramatically reduce the time spent on the move and minimize the level of frustration that often comes with the relocation process,
  • maintain an employee’s engagement and productivity levels,
  • offer a better overall relocation experience, or in this case, de-location experience,
  • provide you with an even more loyal employee who is enamored with the care that the company has provided.

This extra support to help employees more effectively utilize a de-location allowance or package is something that should strongly be considered. It can help ensure that numerous positive outcomes are the result of the de-location process.

Stripe is offering a $20,000 bonus to employees who move away from San Francisco, New York City or Seattle but it comes with a 10% pay reduction, spokesman Mike Manning told Forbes, making the e-commerce and mobile payment processor the latest tech company to implement pay cuts for workers who chose to relocate to less expensive cities as remote work policies are extended because of the pandemic.


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