We’d like to talk about war today. Not Ukraine, but the war for talent. That price went up this last week, not just in demands for pay but also working conditions.
Meet your employees where they are (and will be)
A wise man once said, “Unhappiness is the point when all relationships become mature.” Easy relationships are immature. Difficult ones show whether there even was a relationship in place at all. In a marriage, it is the first real argument. In trade, it is when a war starts, and goods cannot be delivered. In business, it is when an owner is unaware of the pressure a spouse is making on a key employee to leave SoCal. That employee could be in Santa Monica or Encino. They could also be in Gardena or Santa Fe Springs. Fear leaps across borders effortlessly, including industries. They may want to move for different reasons than those of the owner. Have those discussions. Meet your employees where they are today.
How do larger companies handle not just economic reasons for moving but also employee stress? For employees, they consider what the new location will look like. Schools, home and lot sizes, costs of living, and other prices. Will you need the same level of staff? Are the efficiencies that come with moving families out of state worth it? It’s hard to tell, without getting out a spreadsheet and sitting down with multi-state advisors.
For transition or turnover, we’d recommend having either you or the H/R department decide:
1. who would be able to take advantage of the program. Look at the employee roles which have the highest turnover first.
2. How long do they stay on average?
3. How many are in that role?
4. Use that data to calculate the lowest total amount you’ll need to finance.
Next, estimate how many people will take advantage of it, when it’s offered to all employees. Work on different versions of these calculations. You’ll get an idea of your recovery window (time required for reimbursement). Of course, you’ll need to make sure you document this well with either your H/R or employment attorney (preferably both).
Large Businesses Move in Pieces
Large businesses move in pieces. Often, there is an advance squad that includes at least one C-suite member who moves first. They make sure the assumptions are all in place. If plant emissions issues are driving the plant to move, they make sure that not just the State, County and City rules work. They also talk to locals and confirm the “unwritten rules” (like making sure the brother of the town’s mayor doesn’t live across from the new plant’s location). This piece is the advance team.
The team acquires blocks of apartments or hotel rooms, so employees can travel every other week to make sure what they need to operate is in place and functioning properly. There’s overtime involved. Owners need to meet with their employees often, to manage stress, hear questions, or to receive suggestions. This is where the owner learns whether they have mature relationships or not with important employees. Sometimes, it is as simple as buying another, similar business in the new location with plenty of land and access to expand. You can gradually move people and stations there over time. This is the easiest path to manage.
Moving a business is highly stressful and requires significant cash to cover the loss of efficiencies while it is going on, including the movement or purchase of new equipment. A decent sized plant in Los Angeles can burn through $1 million or more easily just moving to Arizona. Recently, we’ve financed these expenses for a Santa Ana auto parts manufacturing firm. It doesn’t matter if you are financing the disruptions from a move or the acquisition of a company. Working Capital lines, long and/or short-term financing are all crucial pieces for a successful relocation. Contact us so Diamant Carré can direct you how to finance these expenses best.
Photo by Razvan Chisu on Unsplash