Are Your Relocating Employees Getting Locked Out Due To High Cost Of Housing? - Overcoming Key Mobility Challenges in China

One of the many challenges facing employees on assignment in China is the high cost of housing. While the options are generally plentiful in China’s major cities, confusing terminology, people’s individual expectations, together with costs can be a stumbling block for an assignee and their family.      

According to ERC’s Talent Mobility in China Survey 2016 sponsored by SIRVA, housing is a particular concern for employees regardless of the assignment type.

While the real estate market has recently leveled off or declined in many cities—especially the lower-tier locations that have been more vulnerable to market downturn.   Beijing, Shanghai and Guangzhou are still quite expensive, especially for those seeking short-term serviced luxury apartments and villas geared toward the most senior level employee and wealthy Chinese.

So, how can organizations alleviate both the associated costs of housing employees and the concerns of the employees themselves?

• All Tier 1 cities, and increasingly more secondary cities, such as Chengdu, in China’s southwestern Sichuan province, have Western-style fully and partially-furnished apartments; though “furnished” can mean different things to different landlords and each accommodation should be checked out in person.  Furnished apartments are generally recommended to avoid the cost and risk of a large overseas shipment or having to purchase items.  However, if purchasing is necessary, the large cities have no shortage of large retailers and well-known furniture stores to choose from.
• As in most highly-populated urban areas, space is at a premium, so a family of five accustomed to a spacious, 4-bedroom home will need to adjust to a smaller space.  A pre-assignment visit that includes assistance from a professional destination services provider is the best way to make sure employees and their families fully-understand their options and make informed decisions. 
• Quality can vary significantly in Tier 1 cities, and more so in Tier 2 and Tier 3 markets.  Construction standards and materials can be sub-par, buildings may not be well-maintained and landlord service may be inconsistent.  Local realtor quality and integrity also varies, making use of both a destination services provider and tenancy management service a recommended best practice to leverage local relationships, facilitate communication between all parties, and help resolve issues that will likely arise before, during and after occupancy.
• It is of course important to balance the pressure placed on mobility managers to reduce costs with the overall wellbeing of employees, so above all, it’s vital that the agreed package and program is clearly communicated ahead of commencement of the assignment to maximize success.