Group Mentality

Recognizing the strain that a large-group move puts on a workforce, employers are working harder to make the process as painless as possible.

Thursday, February 1, 2007
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When Nissan North America announced plans to move its U.S. headquarters from Los Angeles to suburban Nashville, Tenn., in late 2005, CEO Carlos Ghosn acknowledged the automaker stood to lose as many as half of its 1,300 L.A.-based workers in the process.

As it turns out, Ghosn, who had already achieved the reputation of turnaround artist by cutting in half Nissan's $20 billion debt in less than three years, was right. In fact, his prediction turned out to be even a little overly optimistic.

In the end, 42 percent of Nissan's L.A. headquarters employees elected to make the move to Nashville. The majority of its white-collar workforce just wasn't willing to trade the Southern California sunshine for life in Country Music USA. Even a much lower cost of living -- $159,700 for the average Nashville home, compared to $475,000 in the Los Angeles area -- wasn't enough to lure them to Tennessee. For relocation professionals specializing in group moves, that doesn't come as a surprise.

"You've got to go into it realistically," says Joseph Benevides, senior vice president of global relocation services for Paragon Relocation Resources Inc., in Rancho Santa Margarita, Calif. "There are just going to be some people who, for whatever reason, are not going to move."

According to Benevides, that's due in part to the fact that large-scale group moves, such as that undertaken by Nissan, frequently involve employees who were born and raised in the area and have never entertained the idea of living anywhere else.

And that's not all. While singular relocations typically involve upwardly mobile, high-potential employees who have grown accustomed to moving every few years in order to gain skills and experience that will help pave the way to a leadership position, group moves are a completely different animal.

The latter almost always involve lateral moves, rather than promotions. Thus, they don't usually entail a salary increase or other incentives.

"In most cases, the No. 1 incentive is you get to keep your job," says Margery Marshall, president of Valhalla, N.Y.-based Prudential Relocation. "There are rarely any promotions or monetary incentives."

Marshall adds that employees in the post-9/11 environment have shown themselves to be less willing to sacrifice their personal lives for the benefit of the organization. That can have a direct impact on retention rates in a large-scale group move. "We've seen this resurgence of prioritization around the family: 'I was born and raised in this area; my parents and grandparents are here; all my friends are here; I'm not willing to move to another part of the country.' "

That's not to say it can't be done. In fact, experts say group moves can be extraordinarily successful. Marshall reports seeing acceptance rates as high as 90 percent -- of course, she's also seen them as low as 20 percent.

Where Nissan is concerned, company officials were pleased to have 42 percent of their L.A. workforce make the move to Nashville, according to Mark Stout, director of human resource operations.

That figure wasn't too far off from what the company had benchmarked, he says, adding, "Obviously, we would have preferred that everybody decide to go, but we're realists; we knew that wasn't going to happen."

Cultural differences and sheer distance play a major role in determining acceptance rates, according to Roberta Conway, group move manager for Weichert Relocation Resources Inc., in Morris Plains, N.J.

"Where you get very high acceptance rates, it's often where you have people moving between areas that are culturally compatible," she says. "You also get a higher acceptance rate when the distance (between the two locations) is a reasonable trip by car to go home and see family." Obviously, neither of those factors was present in the case of the Nissan move.

Large-scale group moves -- such as those that entail moving corporate headquarters or a manufacturing facility -- present their own unique sets of challenges. The sheer number of people being asked to move amplifies the everyday challenges that plague so-called "one-off" relocations (those which entail moving just one employee, rather a group of employees).

For HR professionals, the demands are huge, as they struggle to assist a large number of people in deciding whether or not to make the move, while dealing with the same issues in their own personal and professional lives. All the while, HR is thrust into the spotlight, as people issues take on heightened importance.

"Group moves are highly visible within an organization, with folks often looking at how the HR staff functions," says Conway. "They can find themselves in a fish bowl with the highest levels of the organization, people who may not pay all that much attention to them on a day-to-day basis, but suddenly, all eyes are on HR, as people watch to see how they are performing in this area."

Proper Approaches

Before the move is even announced to the employee population -- or to the public at large -- HR needs to be hard at work, gathering information on the new location and finalizing policy. According to Benevides, it's absolutely critical to the success of the endeavor that HR be ready to roll the moment employees are told.

If HR leaders wait too long to begin communicating with workers, they face the risk of the rumor mill, which can sabotage their efforts and result in the loss of key talent.

"The preplanning is very important because, in the absence of information, people will imagine what the company is going to do," says Benevides. "They will draw their own conclusions and start making decisions that may cause the move not to go as smoothly as planned."

Chances are employees already suspect something is up anyway, says Marshall. Employees are savvy and likely to get suspicious if they notice anything out of the ordinary.

"It could be the slightest change in pattern, such as senior leaders having more frequent meetings," she says. "Once they see those little things, the rumors start -- and when rumors start, some of the employees will start looking for jobs, and you'll lose some of your best talent before the announcement is even made."

When Louisiana-Pacific Corp. announced plans to move its corporate headquarters from Portland, Ore., to Nashville in the fall of 2003, employees weren't all that surprised, according to Bill Strom, director of HR operations.

Management had chosen to make them aware of the fact that the organization was considering a variety of different locations in which to consolidate many of its administrative functions. Once the decision was made, LP relied on "cascading communication" to make all affected employees aware of the impending move.

Thus, senior management communicated to the leadership teams, which communicated with departmental heads, and so on down to the employee level.

"It was very coordinated in terms of providing rationale, providing timelines, providing talking points to managers to make sure that employees were aware of what was occurring, how it would impact their offices, how it would impact them personally and what they could expect in the coming days, weeks and months," says Strom.

At Nissan, with rumors flying and stories leaked to local newspapers, the company's L.A.-based workers were also aware their jobs might be on the move in the near future. In this case, the company developed two distinct communication plans -- go and no-go -- to ensure managers were ready to get out in front of employees as soon as the decision was made whether or not to move corporate headquarters to Nashville.

"When the announcement was made, we had people on the ground talking with employees, making sure they knew what was going on," says Stout. "We didn't want the decision to be made and then have to wait for a bunch of people to decide to communicate. We wanted to do this quickly, so that employees could get all the information they needed to make a well-informed decision."

Nissan took a multi-faceted approach to communicating with employees -- not only about policy, but also about what the new location had to offer. Information about Nashville area schools, real estate and community activities was posted on the company intranet and in the lobby of the Los Angeles headquarters.

In addition, representatives from Nashville area school districts and Chambers of Commerce joined realtors to hold town hall meetings with employees and their spouses in L.A. to present information about Nashville and answer any questions that came to mind. Naturally, HR had a presence in these meetings as well.

"In each one of those sessions, there'd be an HR person present to answer questions, take notes and ensure that any questions that could not be answered then and there were addressed in a timely fashion," says Stout.

Dissolving Obstacles

In New York, Philip Morris USA, a subsidiary of New York-based Altria Group Inc., helped employees prepare for its 2003 headquarters move to Richmond, Va., in much the same way. On the day the move was announced, the 680 New York-based employees were given a bound "information guide" detailing the policy that would be guiding the move.

HR quickly began meeting with employees in small groups and individual sessions, answering questions and soliciting feedback on the policy to discover potential shortfalls. When it was discovered that the spousal employment-assistance program fell flat, for example, HR re-evaluated the offering and enhanced it, granting spouses $2,500 worth of services ranging from one-on-one counseling and resume writing to access to outplacement provider Lee Hecht Harrison's database of jobs in the Richmond, Va. area.

Like Nissan, the company also established a dedicated intranet site, "PM USA: A Company on the Move." There, employees could review policy information, buy and/or sell household goods via an employee marketplace, and connect with the tobacco giant's existing Richmond workforce of 6,800 people, posing questions and soliciting advice or suggestions.

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The company took things one step further, establishing a "Richmond Room" in its Executive Conference Center. Designed to give employees a sense of what life in Richmond would be like, the room featured a large mural of the Richmond skyline, along with photographs of the area and take-home literature on just about everything Richmond had to offer.

The room was staffed with realtors, vendors, and representatives of the Richmond Chamber of Commerce, as well as HR staff, who were ready to answer employees' questions. According to Conway, having representatives on-site who can address employees' issues in-person is extremely valuable -- and can make a difference in whether workers ultimately accept the move or not.

"They can immediately go to these various professionals, bring their specific scenarios, and get answers right then and there," she says. "Instead of visualizing why they can't do it and having all the reasons pile up in their minds, you start them right on a positive track, dissolving their obstacles."

PM USA wasn't about to make employees settle for a photographic representation of the town they could soon call "home." All New York employees were encouraged to participate in three-day visits to Richmond, where they met with community leaders, vendors and school representatives. In addition, they participated in daytime bus tours and evening social gatherings, all designed to let them experience Richmond firsthand.

Whereas many companies allow employees to bring a spouse or significant other on these site visits with them, PM USA encouraged employees to bring their entire families along for the ride. According to Pete Faust, vice president of human resource services, involving family members every step of the way was one of the company's guiding principles throughout the move.

"We recognized that the family was a critical piece of whether this was going to work for our employees," says Faust. "We knew we were kind of stepping out of the box by including the entire family on the site trip, but we just felt that was something we needed to do." 

Nissan's "familiarization trips" proved so popular that the company had to postpone the deadline for employees to notify HR of their decisions, so everyone who wanted to experience Nashville firsthand had that opportunity. According to Fred Standish, director of corporate communications, Nissan employees really took the trip to heart.

In fact, he says, several who were dead-set against the move found themselves having second thoughts after the trip. Standish says he knows of at least one person who changed her mind about accepting the move as a direct result of the trip. In part, the trip erased some of the stereotypes surrounding the Nashville area, he says.

"The stereotype in a lot of people's minds was that Nashville is a hick little town," says Standish. "The familiarization tours broke through all that and let people see what it's really like -- that it's a very diverse and versatile community."

Handling the Opt-Outers

Of course, no move is going to result in a 100 percent acceptance rate. Therefore, companies must decide how they are going to handle those employees who opt not to make the move. According to Benevides, it's becoming more common for organizations to offer outplacement assistance to those who are leaving the company.

Marshall advocates taking matters a bit further -- beefing up separation policies and offering retention bonuses, so that someone will be there to "keep the lights on," while the move is in full swing.

PM USA did exactly that, offering outplacement assistance through Lee Hecht Harrison. Employees could participate in career training sessions and avail themselves of one-on-one counseling. The company also beefed up its severance pay and provided six months of pay continuation to those who decided not to make the move to Richmond.

The only exception was those employees over 50 who opted for early retirement. They received severance pay and an enhanced level of benefits, but were not eligible for the six months of continuation pay.

Such consideration of all affected employees, rather than just those choosing to make the move, is key to a successful group-move strategy, says Marshall. Savvy organizations are mindful that their business decisions affect not only the bottom line, she says, but hundreds, if not thousands of employees' lives. While group moves can result in a great deal of anger and resentment, they can also result in a lot of good will when handled correctly, and sensitively.

"Even if the employees initially didn't support the idea of the move itself -- and there might have even been some shock and resentment up front because you're uprooting a number of folks who have been there a long time -- group moves can be highly successful," says Marshall.

"At the end of the day, if the employees understand why it was done and believe the company treated them and their families the right way, that's the best measurement of success because, then, you've got the talent redeployed in the new location and they are probably going to be better talent than before."

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