FOLLOW-UP: More on Home Ownership and Employment

Yesterday, I posted about the downward trend in home ownership rates in the United States, coupled with the sharp rise in 'all-cash', primarily investment-driven home purchases, (which almost always are converted into rental properties), and the implications these trends might have on work, employment, and mobility.

So it was really interesting to me that this morning more on the topic of the relationship between home ownership and employment was posted on Business Insider in an article called 'High Home Ownership Is Strongly Linked To High Unemployment [STUDY]", a look at some recent research out of Warwick University on this very subject. 

The piece is relatively short, but I will pull out the most pertinent points below:

High levels of home ownership are strongly linked to subsequent rises in unemployment because labor mobility becomes reduced, according to new research.

Using data going back to 1950 across all U.S. states except Alaska and Hawaii, Warwick University economics professor Andrew Oswald finds that the lag from ownership levels to unemployment rates can take up to five years to show up.

But he said the linkage, established using data on millions of randomly sampled Americans, was extraordinarily robust.

Doubling home ownership in a state can lead to more than a doubling of the jobless rate.

"I have become convinced that by boosting home ownership we have ruined our labor market," Oswald said.

Oswald said the research may go some way to explaining why Spain, with a home ownership rate of 80 percent, has unemployment above 25 percent, whereas Switzerland, with a 30 percent ownership rate, has a jobless rate of just 3 percent. Germany, another nation of renters rather than home owners, also has relatively low unemployment.

Home ownership unwittingly impairs the labor market by deterring people from moving in search of work, a process that is time-consuming and expensive; long commuting times might also discourage a householder from taking a particular job, his research suggests.

A nation of renters, if indeed that is where America is moving towards, might not be all that bad for the future of work and employment, if this study has any truth and validity.

And aren't we seeing and hearing from pretty much every front that surely one element of the nature and future of work is that it will be, for many more people that before, more fluid, more temporary, more 'project-based' and not 'employer-based'. 

A future where many more people will bounce around from assignment to assignment, from 'employer' to employer, and from city to city even, as they chase the much more transient opportunities to ply their trade and earn a few bucks.

Many of us have tales we like to tell about the 6 crappy apartments we lived in after college before we 'settled' somewhere and maybe bought a house, got married, or at least decided to live with a significant other, and maybe even had some kids.

But that 'settling' process almost always came after the steady, 'permanent' jobs were landed. Maybe they were not the jobs or companies you saw yourself staying in forever, but they would be secure enough to save up some dough, prove to the mortgage company that you could in fact afford your new house, and even convince skeptical in-laws to be that you would be a suitable partner for their child. 

But in a economic climate where 'permanent', (if there was really ever such a thing), work is fast-becoming a relic of the past, then too, it seems like some of the follow-ons that came from landing those jobs, (getting married, buying houses, having 2.2 children), are also naturally going to be impacted.

If there are far fewer permanent jobs than it stands to reason that more and more workers will end up living like many of us did in our twenties - bouncing around from one place to another, living out of a few suitcases and boxes, only staying until the next job takes us somewhere else, since no 'job' is going to last too long.

It is a great deal for the companies that want to engage with labor and talent in this manner, but I am not at all sure that as a society we are prepared for a much more transient, less-rooted, nomadic population of professionals, wandering from place to place, and rental house to rental house, chasing a dream that is receding further away all the time.

But think about it, if we were all willing/able to move much more freely in pursuit of work and opportunity, how many of us would stay right where we are and how many would pick up and find something better?

Happy Weekend all!

Relocation, company growth, and asking the right questions

Editor’s Note: Today’s post is the final in a series brought to you by Allied Van Lines, proud sponsor of the “2012 Workforce Mobility Survey”, designed to capture the voice of HR on topics related to workforce mobility. Allied has more than 75 years of experience in corporate, household and international relocation.)

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Here is the simple plan for today's offering -

First, I'll drop two simple, but related charts from the Allied 2012 Workforce Mobility Survey.

Next, I will spend a sentence or two expressing disbelief, incredulity, and general hand-wringing about what the numbers are telling us about our, (that's the collective 'we', not you, dear reader. We both know you are better than that), inability to do the most simple, basic, yet important things well.

Last, I will issue a general plea for all of us, (again it's them I mean, not you), to try and do just a little better. 

Sound good? Here goes.

Chart 1 - Getting to the question of 'How important is relocation, and by extrapolation, flexibility, commitment, and possibly even drive in whether or not you're likely to become a big shot in this organization?'

Wow, turns out it is pretty important. Especially in very large organizations where 60% of respondents indicating for VP and Director-level roles, relocation is required for career advancement, and almost half indicate its requirement for Business Unit leader roles. Since relocation is a requirement for advancement into these very senior, and likely critically important roles, you'd think just about all organizations would have a great handle on just who amongst the potential internal candidates for these roles would be ready, able, and willing to actually relocate for one of them.

Right?

Chart 2 - Guess again, an incredibly small percentage of respondents, even in large companies, indicated they were actually tracking employee's willingness to relocate.

We've heard the story about a zillion times in various formats and ways over the years. The world is shrinking, US companies are looking for growth all over the world, and tapping into markets like China, India, Brazil and more, are becoming keys for many organization's strategies. But in order to make those kinds of strategies possible, to say nothing for less-ambitious but still tricky domestic-based expansion efforts, it will almost always require at least some ability to deploy internal talent in new locations. In order to drop a new store in Topeka, or open a new regional distribution center in Singapore, it is highly likely someone, (probably several someones), will have to go live in Topeka for a while. But based on the survey data in the above chart, it seems like about 88% of companies would have no real idea who might be a good candidate for that kind of primo assignment, because they never bothered to ask anyone.

So here's the wrap-up and the plea. There are lots and lots of things about HR and Recruiting that are really complex, difficult, and simply hard to do. Employees are unpredictable. Managers can go off the plot. Technology that is supposed to make it all better sometimes, unfortunately, lets us down.

Yes, much of what comprises these kinds of the talent processes can be downright perplexing and maddeningly frustrating. But not all of it is hard. Some things are actually kind of easy, like keeping track of people's ability and willingness to pursue new assignments and relocation roles. It is just a question. Ask it once a year, maybe at annual review time, maybe on their service anniversary, maybe at the company picnic, whatever.

But when the simple question isn't asked, and the data to answer the CEO when he or she wants to know if we have the talent to tame a tough market like Topeka does not exist, well then we, (them, not you), look really silly. And the shame of it is that we might have lots of other things that will make us look silly that are out of our control, we really should not be helping anyone make that case.

Many thanks to Allied for the opportunity to participate in the shaping and analysis of the 2012 Workforce Mobility Survey.

And sure, making it a little bit fun probably won't hurt.

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If you would like to learn more about Allied Van Lines, please check out their website or blog. And if you would like to get more information from the Workforce Mobility Survey, you can click here. It’s definitely worth checking out.