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The Group Move Balancing Act

The Group Move Balancing Act

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Published by: ResumeBear on Jun 22, 2010
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10/25/2012

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The Group MoveBalancing Act
 
following merger, greater access to availabletalent pool, or a strategic location for globalbusiness. Whatever the reason, group movedecisions often occur in great secrecy atthe most senior level. The organizationmay include external advisors for legaland financial considerations, and humanresources may or may not be involved inthe decision process. The debate to moveor not to move often centers on a few keystrategic questions:What does the successful organizationlook like in 2010 and beyond?What changes need to be made to getthere?Do the long-term gains trump anyshort-term business disruptionsand risks associated with a merger,acquisition, HQ relocation, or a groupmove of one or more business units?
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The Group Move Balancing Act
In board rooms around the globe, senior executives are considering the next steps inthis high stakes, highly competitive environment. Organizations face tough decisionsin a quest to survive, succeed, and maximize potential and profitability.
M
ergers and acquisitions are a key stepto success for many companies in thecurrent economy. In a survey of nearly 500executives, 25 percent of businesses werelikely or highly likely to make an acquisitionin the next six months, 33 percent in thenext 12 months, and 41 percent in thenext 24 months. (Ernst & Young, New York  Times). This activity, along with restructuringand new markets, can result in businessesmoving a select group of people or an entireorganization to a new location. The groupmove activity that follows these actions isanything but typical.In 2010, it’s not business as usual whenemployers decide to relocate employeesand their families. An unsuccessful groupmove can cost a company millions andcause the loss of the best and brightestemployees. With top talent in short supplyand employees more reluctant to relocatethan ever before, organizations need solidstrategies to guide business decisions thatinvolve talent and mobility.
Group Move Decisions for the Employer
Reasons for a group move vary and mayinclude reduced labor costs, proximity tocustomer base, desire for a neutral location
Copyright Vandover and Runzheimer, 2010. All rights reserved.
“There are many sides to an M&Atransaction,” says James Kristie, editorand associate publisher of Directorsand Boards. “Financial, legal, strategic,and tactical. And… there is a humanelement to every deal.”
(Boardroom Briefing: Mergers & Acquisitions 2009)
 
Within the strategic scope of these questions,decision makers also may explore additionalfactors related to possible locations,including the following:Access to capital and overall costCompetitive influencesSupply chainsCustomer profilesLocation demographicsCost of livingAccess to desired labor poolsProperty acquisition/disposition costsLikelihood that vital talent will followthe organizationCulture compatibilityGovernment incentivesAmong these factors, the financial impactof cost of living and the housing marketaffect both employer and employee andrequire careful consideration as they canbe a significant portion of the groupmove expense. A systematic approachshould include the following to balancecost containment for the organizationand adequate compensation support foremployees:Location comparisons. Cities canhave vastly different profiles andcosts, even when in close proximity.Analysis of specific criteria improveslocation comparisons to ensure propercompensation for employees andbusiness impact for the employer.
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Copyright Vandover and Runzheimer, 2010. All rights reserved.
When it comes to relocation, employersand employees approach the decision withdifferent priorities. Employees in the 24 to 39age range may pick a city and then find a job,with the city being selected for any numberof amenities important to that individual. Thefocus on location makes moving employeesout of a chosen city even more challenging. The most successful locations for business willbe those areas that attract and retain talent.Compare the following lists of top cities foryounger workers and top cities for businessrelocation.
Sources: Next Cities, The 60 U.S. Hotspots for Young, Talented Workers and MuniNet)
Younger workersSan Francisco, CASeattle, WABoston, MAWashington, D.C.
Denver, COAustin, TX
Baltimore, MD
Portland, OR
New York City, NY
Columbus, OH
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Business relocationHonolulu, HI
Portland, ORDenver, COAustin, TX
Houston, TXCharlotte, NCRaleigh, NCDes Moines, IAIndianapolis, IN
Columbus, OH
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