Relocation And Rising Housing Costs: How Recruiters Can Overcome The Latest Hiring Challenge

The housing crisis presents a danger to recruiting top talent in all industries and all parts of the country

Staying put: Frustrated by elevated mortgage rates, a critical shortage of affordable homes and skyrocketing rents, potential recruits are passing on promotions that require relocating. 

For hiring leaders and recruitment professionals, flexibility, expertise, generosity and creativity are a must in attracting and retaining good talent during this housing crisis.

A show of hands among hiring leaders and recruitment professionals: How many of you are authorized by your clients to dangle relocation assistance — from footing the cost of a moving truck to covering the down payment on a new house — to qualified candidates? 

I’ll bet it’s about 10% of you, with the vast majority of your team avoiding that once-standard perk due to an unprecedented crisis. Across the country, rising housing costs, attributable to severely low inventory, a lack of affordable housing, intense buyer competition and rising mortgage interest rates have all but erased the relo from compensation packages.

The housing crisis is a clear and present danger to recruiting top talent in all industries and all parts of the country, and retaining those good people. Here’s proof: A recent study by Realtor.com revealed that the U.S. housing supply is short 7.2 million homes due to more than a decade of under-building compared to population growth.

From seniors on fixed incomes struggling to pay their mortgages because their investments plummeted during the recession, to public servants boxed out of the rental market, nonprofits face that one-two punch: fulfilling their missions while recruiting good employees.

The Sobering Facts

1. U.S. home prices in February 2024 were up 6.4% compared to last year, selling for a median price of $412,095, according to Redfin.
2. Inflation and Federal Reserve hikes have pushed mortgage rates up to a 20-year high. The 30-year fixed mortgage rate (in early April) was 6.625%, compared to below 6% in April 2023. 
3. According to Housing for Humanity, rents and homeownership costs are skyrocketing while wages are not keeping pace. Today, 20.3 million U.S. households pay over half of their incomes on places to live. 

In short, today’s job candidates are faced with a Catch-22 if there ever was one: Should I stay or should I go? Do I take an out-of-state promotion with a better salary, tackle a housing search in a new city and surrender what likely is my lower-interest home loan and equity? Or give up my great, affordable apartment? 

Many candidates are thinking twice about accepting any career growth opportunity if it means moving and making the same or even less money after factoring in housing. 

What You Can Do

Hippocratées, the Greek physician, nailed it when he reportedly said, “Desperate times require desperate measures.” 

Here are some tips for staring down the housing crisis beast:  

Embrace flexibility. Those who have committed return-to-office mandates can now consider flexible work options. If surviving a global pandemic didn’t change your reality of work, now is the time to jump on board. 

If possible, rather than uprooting that ideal, but out-of-state VP candidate, build a remote/hybrid situation for them. Perhaps it goes without saying, but you have to do what’s right for the company, and what isn’t right is keeping a position open indefinitely with unreasonable expectations.  

Additionally, don’t force workers to endure long commutes into the office when study after study has shown work-from-home productivity remains high post-pandemic. 

Local, local, local. With many employers avoiding relocation assistance altogether, and many candidates staying put, consider focusing intently on your local market. Target individuals who are motivated to work with fantastic leaders on missions that are exciting to them. Tell your story in a way that captivates prospective new hires. 

Think outside the box. One who had a low-interest home mortgage was able to buy a second home to live in, and now uses the first home for executive housing. Another, in a scenario that I had never seen before, offered a short-term “consulting project” to a critical hire, rather than an offer of employment. This gives both sides time to see if it’s a good fit for the job and the location before all parties invest in relocation.  

Seek expert advice. There may be mortgage subsidies managed by your company’s preferred lender partners, either cash or rate-based and paid over a defined period. Perhaps your lender offers corporate-sponsored in-house loans or second mortgages and assistance with down payments. 

Be resourceful. Temporary, affordable housing options are beginning to emerge, you just need to know where to find them. 

Advocate for affordable housing. Local and state governments can fix this crisis, if they have the will, know-how and motivated partners. Encourage them to build better cities, counties and states, as if life depended on it. Because it does.

While housing costs continue to be a thorn in the U.S. economy, savvy recruiters and hiring leaders can overcome this barrier by approaching the situation with ingenuity.

Colleen Neese is a Practice Group Leader at Duffy Group.