Company On Wheels - business relocation

Workforce, Dec, 2000 by Nancy L. Breuer

Moving an entire division--or a whole company--is a job that takes planning, flexibility, and yes, sensitivity. Here's how four companies faced the challenge.

If you've been tapped to move an entire division or company from one county or state to another while supporting the employees who get out the product, you probably won't have much trouble imagining a Western cartoon version of the job. In the final frame, you're hanging from a cliff by your nails after first your horse and then the bridge have collapsed under you. Even as everything around all of you changes, your people still have to produce on time and on budget. According to recent statistics, you aren't alone (and yes, you survive the experience). Relocations of whole divisions and whole companies have been increasing in recent years, and HR must make it happen.

So far, no one keeps national statistics for whole-company relocations. But everyone agrees that group moves have become more frequent, with as much as 25 percent of some industries relocating in one year (see chart). In destination cities like Sacramento, California, the sharp increase in the rate of whole-company relocations is striking, says Barbara Hayes, executive director of the Sacramento Area Commerce and Trade Organization, or SACTO. Usually SACTO sends out 25 business relocation information packages during a two-month period. In July and August, it sent out 60 packages. Ten companies have moved to Sacramento in the last six months, citing the high cost of housing and of doing business in the Bay Area.

Most companies that relocate en masse cite one of three reasons:

* Lower cost of doing business in the new location.

* Acquisition by another company

* Quality-of-life improvement for all employees, including traffic, schools, local housing market, and similar issues.

Whatever the company's size or work, HR's challenge is to maintain productivity while managing the complex, emotionally charged process of changing the context of employees' lives. Here is how four companies fared with large-scale relocations.

Keeping the vehicle moving

As a result of Volvo's purchase by Ford Motor Company, Volvo Cars of North America is in the midst of moving from Rockleigh, New Jersey, to Irvine, California. Nita Mitchell, vice president of human resources, heads up this move and plans to complete it next summer. Now, she's focused on keeping productivity up by taking care of her people. So far, she has done so by:

* Framing the move as a reinventing of the company, a "re-Volvolution" that is a purposeful pursuit of the future.

* Taking every employee who has been invited to go to Irvine on an exploratory visit to Southern California, including meetings with real estate agents, school visits, and family meetings to hear about community life.

* Not asking employees for their decisions until they have met with the local chamber of commerce, and the mayor of Irvine and discussed relocation with their own families.

* Enhancing the company's relocation policy by paying a lump sum for temporary living expenses and a tour of California during the house-hunting process.

Mitchell reports that all of those whose jobs are being moved to Irvine were invited to go. Staff received personal invitations from the CEO to relocate. Of those invited, 60 percent have agreed to move--5 6 people to date. "Most people in our company are Northeast born and bred, so it's a huge change. We'll help them manage that change, including providing personal counseling and outplacement support. When someone comes in and has to talk, we drop everything." What will make the move succeed? "Communication," Mitchell insists. "We make our priority our people."

Bob Goodman, a career counselor with Cedars-Sinai Health System in Los Angeles, agrees that a laser focus on employees' needs is vital to a successful move. Goodman was acting manager of training and development for Transamerica Life Companies in Los Angeles when most of the divisions of the company moved to Kansas City, Missouri, in 1993 and Charlotte, North Carolina, in 1994. "I cannot overstate how intense the emotional impact of this kind of move is," he says. "The resistance to change is so great that the handwriting can be on the wall, services can be in place, but employees may not let it sink in until the day their jobs end. Then, in my experience, they were clamoring for services."

Maintaining productivity in a technology company

Lucas Digital LTD. is reversing the usual corporate trend by transferring from a suburban campus to a downtown location. Overseeing that effort is Chris Glennon, director of corporate real estate and operations for the company, which currently creates its leading-edge special effects for films in San Rafael, California. Glennon is using his 15-year background in entertainment company moves to manage the logistical and human sides of the company's coming relocation to San Francisco. He's planning the move for 1,500 to 1,800 employees, many of whom are in the midst of cutting-edge technological entertainment productions, and says that "you can't just turn off a supercomputer." Glennon has a 36-month planning time line for the technology center at the company's new site, the historic Presidio. "This is already a dynamic environment, and we're picking a date three years Out to move seven different companies," all on different work-flow and delivery schedules.