Job Seekers Relocated Less in Second Half of 2009
2009 RELOCATION UP FROM 2008, BUT STILL NEAR HISTORIC LOWS
After rising to the highest level since 2006, relocation among job seekers slowed in the second half of 2009, with only 7.3 percent of fourth-quarter job seekers taking positions in new towns. That is the lowest relocation rate on record, according to a report released Monday by global outplacement consultancy, Challenger, Gray & Christmas, Inc.
Relocation by job seekers peaked in the second quarter of the year, when 18.2 percent moved for new positions. That was the highest relocation rate since the second quarter of 2006, when an identical 18.2 percent of those finding positions relocated.
The new findings come from the latest Challenger Job Market Index, a quarterly survey of approximately 3,000 job seekers from a variety of industries nationwide.
According to the Index, the percentage of relocating job seekers dropped to 13.4 percent in the third quarter and dropped further to the record low to end the year. An average relocation rate of 10.4 percent in the last half of 2009 was down from 16.3 percent from the first six months of the year.
Despite the second-half slowdown, relocation for the year increased to an annual average of 13.3 percent, up from 11.6 percent in 2008, when the housing market collapse was at its worst. The 2008 average was the lowest annual figure since the Challenger Index began in 1986. The 2009 annual average is the second lowest.
“Relocation is still a last resort for the overwhelming majority of job seekers. We did see a surge in the second quarter of the year, amid early signs of an economic recovery. Perhaps, when it became obvious that the job market was recovering more slowly than the general economy, relocation dipped again. When job seekers perceive their chances of finding work are poor regardless of the geographic area in which they look, they are likely to stay where they have an established support network,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
Indeed, the job market has shown few signs of improvement over the last six months. While job losses slowed significantly in the second half of the year, there is no indication that employers are ready to increase hiring. As a result, the national unemployment rate remains stubbornly high, at 10 percent, and the number of people experiencing long-term joblessness lasting 27 weeks or more is at record highs.
“There are pockets of low unemployment, but according the latest data from the Bureau of Labor Statistics, only 12 metropolitan areas were still enjoying unemployment rates lower than five percent in November. In May, when the relocation rate was at its highest level of the year, there were still about 20 cities with unemployment under five percent,” Challenger noted.
“This is not to say that job seekers would not benefit from expanding their searches to different geographic areas. Any time job seekers expand their job search parameters in any way – whether it is looking in different cities, looking in different industries or looking in different occupations related to their fundamental skill set – they will greatly increase their chances of success,” said Challenger.
In 2009, job seekers were far more likely to change industries than relocate. Over the year, an average of 36 percent of those finding new positions switched industries. That was down slightly from a 2008 annual average of 39 percent.
“Relocation is much more difficult to achieve. Moving is consistently ranked as one of the most stressful events one can endure. It often ranks right behind job loss. So, when you throw these two situations at an individual, it is easy to see why very few people are willing to consider it, even if it does improve the chances of job-search success,” said Challenger.
“In addition to stress, those who find themselves out of work are certainly concerned with the considerable expense of relocation. For homeowners, finding a new home is often dependent on selling the old one, which is a much more difficult prospect in this market. While job opportunities may exist across the country, unless the monetary compensation makes up for moving expenses or the company offers some sort of relocation package, a job seeker is likely to stay put.”
Relocation rates tracked by Challenger have fallen steadily since the survey began in 1986. In 1986, for example, the quarterly relocation rate averaged 42 percent. In 1993, relocation averaged 35 percent over the year, but reached a record high of 49.2 percent in the second quarter. After 1993, however, job seekers appear to be more averse to relocation, with the quarterly average sinking to 22 percent from 1994 through 2000.
“Around 2001, the annual average for relocation fell below 20 percent for the first time, and has not returned above that rate since. What made the decline in relocation even more surprising is that it came at a time when the Internet made it easier than ever to search for out-of-town jobs,” said Challenger.
“However, the same Internet technology that makes out-of-town job seeking so easy also makes it easier for people to work from anywhere. Faster and cheaper Internet connections, coupled with relatively low air-travels costs, made it possible for job seekers to gain out-of-town employment without actually moving out of town,” he added.
According to Challenger, relocation rates are likely to increase as the job market improves over the next year or two, but they almost certainly will not return to the levels reached in the late 80s and early 90s.
“In the 1980s and early 1990s, the workplace was dominated by the baby boomers, who seemed more open to changing their zip codes to find positions and move up the corporate ladder. Now, this population appears to have hit an age where they are settled in and less likely to move. The younger generations coming up behind the boomers seem less willing to pull up their roots for a job. They are more likely to relocate based on lifestyle choices versus occupational choices,” said Challenger.
“This could present some challenges for recruiters as the economy improves. Companies will have to depend more on their local talent pool. In order to attract highly-coveted candidates from out of town, they will have to offer something beyond a good salary and benefits package. The companies that will have the most success at long-distance recruiting are likely to provide desirable relocation packages.
“Additionally, those based in regions that offer shorter commuting times, plenty of recreational activities, a good culture and arts scene will attract quality candidates. More importantly, the successful recruiters will be those with companies that actually give employees the time and balance to enjoy these regional benefits,” Challenger concluded.
Percentage of Job Seekers Relocating
1986 – 2009
| | 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% |
| QTR AVG | 23.0% | 24.2% | 22.6% | 21.9% | |
Source: Challenger, Gray & Christmas, Inc.
CHALLENGER JOB MARKET INDEX
| | 2008 Q1 | Q2 | Q3 | Q4 | 2009 Q1 | Q2 | Q3 | Q4 |
| Percentage Relocating | 8.9% | 11.4% | 13.4% | 12.6% | 14.4% | 18.2% | 13.4% | 7.3% |
| Percentage Relocating with Employed Spouse | 29.0% | 20.0% | 22.6% | 21.7% | 31.0% | 14.7% | 22.0% | 28.6% |
| Percentage Changing Industries in New Job | 42.1% | 37.3% | 35.9% | 42.1% | 41.8% | 36.6% | 41.8% | 22.3% |
Source: Challenger, Gray & Christmas, Inc.
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