The availability of housing options for employees has become a serious issue for many employers in regions around the country. That is especially so in Colorado, where a recent survey declared the state to be the least affordable housing market in the country.
Some members are telling us that housing is a serious barrier to meeting workforce needs, especially in resort mountain areas and urban markets. Applicants are scant for lower-paid positions, and competition is fierce. Perhaps even more frustrating, hires who must relocate often decline offers after they research the housing market and find it unaffordable. Some newly hired employees leave soon after starting a job after temporary housing arrangements become intolerable.
What can an employer do? Although there is no silver bullet to this structural problem that will work for all employers, there are options to mitigate the challenges of the housing crunch on employees and the resulting impact on operations.
Advise
On your careers website and early in the application screening process, be upfront and provide clear information (see Research below) about local housing markets so applicants are well-informed up front. This may encourage applicants to self-select out of the process if housing is a concern for them. While the number of applications submitted may be reduced, this is preferable to spending hours on interviews, assessments, background checks, etc., only to see an ideal applicant to back out.
Advocate
Communicate with local and state government officials to advocate for housing initiatives that will improve the supply and cost of housing in your labor market. This issue is complex and largely beyond the scope of a single employer.
Research
Delve into the local housing market to identify availability and costs to develop a better understanding of local conditions. Research local agencies that may help with housing searches, matching landlords with renters, home sharing/roommates, and subsidies. If nearby communities have more affordable housing stock, research transit options for employees to commute. Long-term camping, RV parks, and mobile home communities may provide options.
Partner
Longer-term solutions may include partnering with community government and other employers to address housing shortages and affordability issues. Some community partnerships have arranged funding for “workforce housing” construction that benefits the entire local economy, as described in this article about the small resort town of Frisco, Colorado.
Subsidize
Provide a housing allowance as a benefit. Consult a CPA or other financial advisor for tax considerations and other important details.
Landlord
Employers may build worker housing and become landlords to their employees (or outsource this role). An example of this is the federal government for workers in the national parks and forest service; this Harvard Business Review article describes more examples. Becoming a landlord is costly, requires long-term investment, and invites a host of complications to administer.
Go Remote
Evaluate jobs and identify those that can be done remotely. Doing so will greatly increase the applicant pool for vacant jobs and tap into areas where housing is more affordable and/or available. When an applicant lives in another state, evaluate employment laws in advance to ensure you are able and willing to comply in advance of hire.
Compensate
Evaluate and revise compensation plans to pay wages that may enable employees to afford local housing costs. Reallocating budget from benefits to wages is an option; however, the trade-off may be a less competitive total rewards package that reduces employee retention.
Reduce
A less-than-ideal solution is to scale back operations to reduce the need for labor. This has already happened in the retail and hospitality sectors, where service hours are reduced, customer expectations are redefined (i.e., a lower level of service is provided), menu options are reduced, etc.
Automate
Identify ways to leverage technology to automate certain jobs and tasks. Increasing use of artificial intelligence (AI), robotics, and other technologies can reduce the need for human labor.
Revise expectations
Review job descriptions and identify opportunities to revise them to expand the possible pool of applicants. Are certain degrees truly necessary, or can skills be evaluated to match job needs? Companies are finding great success with neurodiverse candidates for open positions after innovating alternative ways work can be done. Post-incarceration applicants, retirees, people with disabilities, and people who seek part-time work may also provide a pool of applicants.
Relocate
At the extreme, relocation to an area of lower cost/higher availability housing may be a long-term solution. Outsourcing tasks to service providers in other communities, or even countries, may also be an option.
Employers face challenges with any option. Employers Council Consulting and Enterprise members may contact us for assistance with HR and legal considerations for a strategy to address employee housing.
James McDonough is an HR research consultant for Employers Council.