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Job Relocation Rate Hits Three-Year High

Desperate job seekers take more risks

By James Limbach
ConsumerAffairs.com

July 27, 2009
As employers continue to cut jobs and with few signs of a hiring resurgence on the horizon, new job-search statistics reveal an increased willingness among out-of-work Americans to pull up stakes and relocate to wherever positions are available.

If the still-budding upward trend continues, it could help re-ignite home sales in some areas of the country, particularly those with more job opportunities.

According to the new data, 18.2 percent of job seekers finding employment in the second quarter relocated for the position, compared with 14.3 percent in the previous quarter and 11.4 percent in the second quarter of 2008. It is, in fact, the highest job-seeker relocation rate since the second quarter 2006, when it also reached 18.2 percent.

The latest job search statistics were released by global outplacement consultancy Challenger, Gray & Christmas, Inc. and are based on data collected from among approximately 3,000 job seekers at all levels in a wide variety of industries nationwide.

"Job seekers had been extremely reluctant to relocate up until this most recent quarter," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. "The reluctance was almost certainly related to the inability to sell one's current home without incurring significant losses. There was also the fear that, with the job market so unstable, it was too risky to relocate for a job that might not last."

Challenger notes that while job seekers are no less likely to lose money on the sale of their home and the job market is only marginally more stable than it was six months ago, the overwhelming desire to get back to work appears to be outweighing the perceived risks.

Between the fourth quarter of 2007 and the first quarter of 2009, the relocation rate averaged just 11.9 percent. It hit a record low of 8.9 percent in the first quarter of 2008, according to Challenger tracking that began in 1986.

While the 18.2 percent relocation rate in the second quarter represents a significant increase from previous quarters, it pales in comparison to the level of relocation exhibited in the late 1980s and early 1990s.

In 1986, for example, the quarterly relocation rate averaged 42 percent. In 1993, it 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, despite the fact that expanding one's job search greatly increases the odds of finding a position. 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.

"Several factors probably contributed to the decline in relocation," he added. "The country experienced a period of phenomenal growth, with many cities and states diversifying their economies. This made it less necessary to relocate to find work in specialized occupational categories. In other words, you no longer had to relocate to Silicon Valley if you wanted to find a technology job.

Challenger speculates that another factor that has contributed to the fall in relocation is the fact that 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.

In May, that latest month for which local area unemployment data from the Bureau of Labor Statistics was available, there were about 200 metropolitan areas with unemployment rates below the national average, which stood at 9.1 percent at that time. Remarkably, about 20 metro areas had unemployment rates below 5.0 percent, including Bismarck, North Dakota, which had the lowest jobless rate in the country, at 3.5 percent.

Some of the other cities enjoying low unemployment rates are Iowa City, 3.7 percent; Ames, Iowa, 3.8 percent; Lincoln, Nebraska, 4.2 percent; and Manhattan, Kansas, 4.4 percent.

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