The depressed real estate market is having another effect, however. It's making it more difficult, if not impossible, for workers to relocate to take new jobs. The percentage of unemployed managers and executives relocating for new positions fell to a record low in the third quarter, according to analysis by Challenger, Gray & Christmas, a Chicago-based employment-services firm.
Though the job market has improved slightly, much lower home values are eliminating relocation as an option for many job seekers. The percentage of Americans who relocated to take a new position fell to 6.9% in the third quarter, down from 13.4% a year ago, according to Challenger's quarterly survey of some 3,000 successful job seekers employed in numerous industries.
Lowest Relocation Rate Ever
The third-quarter results continue a decades-long trend but one that saw significant drops beginning a year ago. The relocation rate for the last four quarters has averaged just 7.3%, and the most recent quarter's results were the lowest ever recorded by Challenger, which began tracking relocation data in 1986.
"Continued weakness in the housing market is undoubtedly the biggest factor suppressing relocation. Job seekers who own a home -- even if they are open to relocating for a new job -- are basically stuck where they are if they are unable or unwilling to sell their homes without incurring a significant loss," says Challenger CEO John Challenger.
The nation's slack job market also means fewer employers are willing to offset workers' relocation expenses since talent is easier to find these days. Tight corporate budgets are keeping such reimbursements in check, too. Yet another factor in fewer workers relocating is an increase in the number of job seekers who believe they'll find local employment.
The trend may be problematic for employers, however. As the pool of available workers in the local market winnows, companies will have to start casting a wider net and consider hiring outside the region. "Unfortunately, the immobility of the workforce may mean that some employers will have to delay expansion plans, thus slowing the recovery," Challenger says.
The toll may be highest on smaller employers, which don't have the deep pockets that many larger corporations boast to help offset workers' moving expenses. Small and midsize companies -- where most of the new job growth is expected to occur -- will likely be unable to cover a candidate's relocation costs or make up for losses in the sale of a home, Challenger says.