New rules apply when the move is a transfer

When Bayer moved its diabetes care division from Indiana to Tarrytown last year, it offered transferees a mortgage subsidy to help bridge the higher cost of housing in Westchester County. The subsidy, ranging from $75,000 to $125,000, is available for five years and pays the difference between an employee”™s cost for mortgage and property tax in Indiana and in Westchester.

Moving the employees was expensive: Lynne de Sherbinin, Bayer Diabetes Care”™s vice president of global human resources, said the average cost for a family ranged from $95,000 to $130,000. But that didn”™t stop the company from providing other add-ons, such as assisting spouses with finding employment. With help from a relocation company hired by Bayer, one employee”™s spouse landed a job in purchasing, while another spouse is working in finance, according to de Sherbinin.

The Bayer transferees also got assistance in finding a desirable school district for their kids. The demands could be quite specific. One family searched for an area in which their child could take Flamenco guitar lessons, while another wanted to be in a school district that offered a special kind of karate class, said de Sherbinin.

Bayer”™s perks, which complement a package that includes all moving and temporary living expenses, closing costs, one house-hunting trip for the spouse and a miscellaneous allowance for extras such as washer-dryer hookups and new curtains, are indicative of a kind of reverse trend in the corporate relocation market: After years of belt-tightening by many companies and the elimination of cost-of-living assistance to employees who are being relocated, many firms in the Westchester area are bringing back some of those benefits.

“A key concern is retention,” said Carmelita Brown, vice president of Prudential Relocation, a division of Prudential Financial Inc., based in Danbury, Conn. “Companies today are only moving people they want to keep and for specific jobs, and they are providing more benefits.”

At Heineken, headquartered in White Plains, “employees view relocation as a promotional opportunity,” said Art Masarky, director of human resources. “It”™s quite selective because of the costs and generally those people relocated into the U.S. or out of the U.S. are superior performers. They”™re being prepared for bigger and better things.”

Most large corporations in the region are outsourcing the relocation function to specialized companies like Prudential Relocation, which provide an array of customized services.

“The human capital is so critical that companies are beginning to realize if they want to sell our region they need an advocate for that region who can explain it properly and manage expectations,” said Sylvia Ehrlich, president of another corporate relocation firm, The Intrepid New Yorker L.L.C., based in Manhattan.

Ehrlich cited a recent case in which a critical hire, a chemical engineer, who was being relocated from Chicago balked at making the move because his wife was expecting twins and the family had no support system in the new location. But he agreed to move after an arrangement was worked out in which the corporation paid for both sets of parents to fly in from Chicago after the wife gave birth. It also agreed to provide a monthly stipend for the first year, enabling the wife to hire help. “It showed the company cared,” Ehrlich said.

That type of support is becoming much more common, agreed Brown. Because “recruiting takes longer and can be more expensive than providing a generous relocation package” to existing employees, “the smart companies are providing pre-decision assistance,” she said.

Employees who are being transferred today are a lot more savvy than their bygone counterparts. “They are wiser than they ever were,” Brown said. “They go on the Internet and talk with other employees. They come to the table with an ability to negotiate.”

In a few cases, employees at the executive level who are concerned about the stability of a company that is restructuring are choosing not to sell their home and instead asking the company to pay for their rent at the new location. “The corporation”™s viewpoint is: ”˜We need to get through the transition, so we will pay your rent for a year or two,”™” said Brown. “This lets the employee keep the house in Wisconsin and see if the relocation works out in Westchester.”

One trend that is driving companies to provide more relocation assistance is a dramatic rise in the number of internationals relocating to the region. “Ten or 15 years ago, internationals constituted about 30-40 percent of the business, but now it”™s about 70 to 75 percent,” Ehrlich said.

“Companies need to bring in talent, whether management or creative, and they”™re getting it from everywhere,” she added. “There”™s more universality in companies. With technology, there are no more borders.”

Indeed, an increase in international assignments around the world is creating difficulties for companies in finding the talent to fill those positions, noted Anita Brienza, a spokesperson for the Employee Relocation Council/Worldwide ERC, an association based in Washington, D.C. That creates more mobility, with 80 percent of companies in a recent Worldwide ERC survey noting the available positions in their organizations require new hires to be more mobile now than they were three years ago.

Besides an increase in employee rotations and new hires from abroad by U.S. companies, many smaller foreign companies are moving here to establish a presence in the U.S. Large international firms are setting up divisions in the area as well. Some of the transplants are joint ventures; IBM, for example, has added a number of partner companies based at its site in East Fishkill.

Many internationals are here on three-year assignments. “Companies often give a supplement, contribution or allowance to international transferees for rental housing,” said Ehrlich. “They find rentals closer to work,” which sometimes creates resentment among domestic peers burdened with longer commutes. But Ehrlich says it”™s a fair advantage, given that “these people are making a lot of sacrifices.” Plus, foreign nationals often need to be located near a foreign-language school, most of which are located “down county.”

There is also a lot of movement within the tri-state area, as companies restructure and firms located in New York City continue to migrate to the suburbs. “The corporate real estate market in Westchester is very strong,” said Louisa Benjamin-Bohm, president of Schleppers Moving and Storage, which has offices in Elmsford and Yonkers, as well as the Bronx and Manhattan. “People want to streamline costs and operations and they can get a good labor force here. We”™ve seen that Westchester has grown and become very convenient.”

In these types of lateral moves, cost-of-living subsidies usually aren”™t offered, since the employee is being relocated to a nearby area with similar costs, Brown noted.

At the same time, more employees than ever before are reluctant to move, according to national statistics. In part this reflects the fact that more female employees are being asked to relocate, a greater percentage of whom are saying “no.” According to Ehrlich, on average only 66 percent of women who are asked to relocate do so, compared with 81 percent of men.

The greater numbers of female transferees also has led to more male spouses. Brown said that nationwide, 28 percent of the job-seeking spouses of relocating employees are men, which “is even more of a challenge, since the male spouse is often very interested in a particular club or group.”

Despite all the perks, the declining real estate market, competition in the marketplace and other factors are also causing firms to keep a close eye on costs. While companies are providing more flexibility in their relocation packages, they”™re keeping tighter control over their budgets.

For example, many firms are providing lump-sum programs, which enable transferees to trade off one benefit, such as getting an extension of their temporary housing expenses, for another, such as a mortgage subsidy, said Brown, noting: “The trade-offs are cost neutral. The company isn”™t spending that much more money, but it”™s allowing employees to make more decisions.”

In addition, firms are becoming more restrictive in their home-sell programs. “They”™re asking the offers to be brought to them and they”™re reviewing them,” Brown said. “They”™re also putting in very specific provisions, which force employees to attempt to sell their houses faster. They have to market and price it correctly.”

Brown added that “over 80 percent of our clients are working with a consulting group to make policy changes, knowing that the real estate market is declining.” Some companies have also added a loss-on-sale provision, in which they will help employees recoup the loss incurred by paying more for their property a few years ago than it is worth today.

“Companies are putting in caps and limits,” said Ehrlich. “They”™re saying, ”˜You”™ve got to have some responsibility. If we are guaranteeing you against a loss, then we need to know when you bought the house and that you bought smartly.”™”

For the most part, “transferees are trying to show they are trying to save the company money,” she added. “They still want what they want, but they want to get the message back that they”™re not using the company or taking advantage.”