Why job seekers are relocating at historically low rates

Looking for work? Chances are you’re not considering relocating, along with the vast majority of American workers.

Only around 10% of people seeking out a new job in the U.S. chose to relocate for work during the first half of 2018, according to a new report from staffing firm Challenger, Gray and Christmas. And in the second half of the year, just 9.5% of workers decided to move for a job, down from 10.6% the year before and 12% during the second quarter of 2016.

That’s a far cry from the 1980s when more than a third of job seekers relocated for new positions across the U.S. While the share of workers moving for jobs has decreased relatively steadily over the last four decades, the Great Recession triggered significant declines in people relocating for work as there were simply fewer jobs available.

“The dot-com bubble that left companies flush with cash in the second half of the 1990s, allowing them the potential to offer generous relocation packages to attract talent, burst in 2000,” Andrew Challenger, vice president of Challenger, Gray and Christmas, said in the report. “As companies found themselves in cost-cutting mode, it seems many chose to find local candidates and spare the expense of relocation reimbursement in the years following,” he said.

The tight labor and real-estate markets may be dampening people’s desire and ability to move for work. With unemployment at the lowest rate in years, workers now face a buyer’s market when it comes to searching for a job. What’s more, new technology has allowed an increasing number of people to work remotely, which reduces the need to move even further. “Job seekers don’t have to leave the security of their homes to find new employment,” Challenger said.

In recent years, more workers have begun working remotely. Between 2012 and 2016, the share of employees who spend 80% or more of their time working remotely grew from 24% to 31%, according to a recent survey from Gallup. Some 59% of business executives said that more than half of their companies’ full-time workforce would be remote by 2020, per the results of a 2014 survey at London Business School’s Global Leadership Summit.

Also see: As jobs growth continues, these cities have added the most jobs

Read more: California’s emigrants aren’t all moving to cheaper housing markets

In a March 2017 survey of more than 24,000 workers, nearly all of them (98%) said that “anywhere working” positively affected productivity. The study was carried out by video and voice collaboration technology company Polycom, Inc. and Human Resources executive network and research firm Future Workplace. And 62% of those respondents said they were already taking advantage of flexible working practices.

People may be less reluctant to move. The competitive real-estate market could also be dissuading people from taking a risk and moving elsewhere in search of work. Both house prices and rents are on an upward trajectory, recent studies show. In the past, rising home prices created an extra opportunity for job seekers who chose to relocate: Not only could they get better work, but they also could cash out on their real-estate investment.

But now the shrinking desire to move, coupled with muted home-building activity, is contributing to a major supply crunch in housing markets across the country. That has led to bumper price growth in many popular markets. They stand to reap the benefits of their investment if they sell, but because other people aren’t selling or moving, they may have nowhere to move to.

At the same time, mortgage rates have risen in recent months, meaning many homeowners are now “rate-locked” because they would have to take out a loan with a higher interest rate if they chose to move. “There’s not as much churn and turnover,” said Danielle Hale, chief economist at Realtor.com. “That’s creating less opportunity for buyers and sellers in the market.”

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