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High cost of living impinges on local hiring, NEHRA survey says

By NEHRA, 9/26/2005

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According to the results of a recent survey conducted by the Northeast Human Resources Association (NEHRA), Boston's ranking as the most expensive metropolitan area in the country is having an impact on Boston's HR climate. The survey was sent to NEHRA's 4,000 members to determine how the high cost of living affects local organizations' hiring, retention and decision-making.

"The HR community has a stake in keeping a solid and qualified workforce in the Boston area and the issue of cost of living impacts this," said Laura Avakian, president, Northeast Human Resources Association. "The results of this survey illustrate the growing concern that high prices in this area will make it increasingly difficult for HR departments to provide their organizations with the best talent."

Slightly more than half of NEHRA human resources practitioners polled (52 percent) find it harder to adequately fill vacant positions because of the high cost of living in the Boston area. Many of those surveyed commented on the difficulty in recruiting and retaining college grads as well as the high salaries necessary to remain competitive. Other respondents cited status quo saying the cost of living does not surprise those from the area but does shock and dissuade those relocating. Companies located in suburban areas commented on the hiring advantages of not being located in the city and some companies are considering relocating their offices.

Fifty nine percent of those surveyed believe that Boston's recent ranking as the most expensive city in the nation will impact their ability to provide the company with the workforce necessary for organizational success. "People will not be able to live here on what the pay scales can support," said one respondent.

NEHRA also questioned how the impact of high gas prices as a result of Hurricane Katrina and other economic factors will affect local business. Nearly 62 percent of respondents do not expect corporate policy to change due to the recent increases in gas prices. However, many are encouraging a range of cost-saving strategies including: employee carpooling (20 percent); public transportation (17 percent); allowing more employees to telecommute (15 percent); and increasing the company mileage reimbursement rate above the IRS rate (7 percent). Other tactics mentioned include outsourcing life-skills training for employees related to personal finance, savings, retirement and home buying.

Nearly all of those surveyed said their companies are not considering downsizing because of the recent increases in gas prices.

Thirty percent of those polled anticipate losing employees due to the greater cost to commute long distances and 45 percent are unsure if they will lose employees for that reason over the next six months to one year. Twenty five percent do not anticipate losing employees due to commuting costs.

According to one respondent, "people are reconsidering their life choices, especially after a natural disaster such at Hurricane Katrina, and post 9/11. The question that comes up - is it worth it?"

The cost of living in Boston has been an ongoing issue for some time. Many of those surveyed commented that notoriety from the recent report will not help. "I think that the public recognition of the cost of living will now make it harder to draw people here. It is also more obvious now that more people leave the area than move here," said another respondent.

"I am writing many resumes for people moving out of Massachusetts. I am writing resumes for business owners who cannot afford to stay in business and are looking to leave their business as well as move out of state," said a resume writer who responded to the survey.

NEHRA's cost of living impact e-survey was conducted online from September 9-13, 2005 and had 254 responding employers, the majority of which have between 100-500 employees in their companies. To read the full report, visit NEHRA.com


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