Federal Agency Relocation to Move Jobs Outside the Beltway
A new Bill sponsored by two United States Senators will result in federal agency relocation outside of the Washington, D.C. beltway area. The Bill calls for enactment of the “Helping Infrastructure Restore the Economy (HIRE) Act.” One goal of the HIRE Act is to help certain areas of the country build necessary infrastructure. As a result, this will support future economic growth. Another goal of the HIRE Act is to provide access to good jobs for a greater number of Americans throughout the nation. Several states will see an influx of high paying jobs to economically distressed areas.
The HIRE Act will move policymakers directly into communities impacted by their policies. This should help them see how policies their agency creates affect local areas outside of the beltway. There may also be long term savings for the agencies in a number of other areas including labor, maintenance, and energy costs.
Federal Agency Relocation: The Bill and its Sponsors
Requires federal agency relocation for headquarters and permanent duty stations of its employees.
Senator Josh Hawley, Missouri
Senator Marsha Blackburn, Tennessee
Ten Agencies Subject to the HIRE Act
The HIRE Act identifies ten federal agencies that may be subject to relocation:
The Departments of
- Health and Human Services
- Housing and Urban Development
- Veterans Affairs
Ten States Stand to Benefit from Federal Agency Relocation
The HIRE Act identifies ten states with significant economic distress over the past decade:
- New Mexico
- South Carolina
- West Virginia
Of these ten states, eight share borders and are situated in the Midwestern region of the country. South Carolina is located along the Southeastern coast, and New Mexico is located in the Southwest.
Economically Distressed Areas Defined
The HIRE Act defines the criteria that will determine economic distress. These criteria are further segmented into “Priority Criteria” and “Secondary Criteria.”
Priority Criteria include low rates of education, workforce participation, and income. Poverty rates and housing vacancies are also in this criteria.
Secondary Criteria include current infrastructure, ability to expand infrastructure, and the size of the local workforce.
Additional Points for Federal Agency Relocation
Further to the criteria that determines economic distress, the HIRE Act includes a specific limitation:
- No location may be within 30 miles of a city with over 800,000 residents
The HIRE Act requires the relocation proposal to focus on as small a geographic size as possible. For example, within the state of Indiana, “southern Indiana” would most likely be considered too large a geographic size. However, the town of Lyons in Greene County may qualify.
Federal Agency Relocation Example: Lyons, Indiana
Economically Distressed Area
Lyons has a “Distress Score” of 123.23, the highest such score in Indiana. Lyons is about 87 miles from Indianapolis, IN; 260 miles from Chicago, IL; and 95 miles from Evansville, IN. However, Lyons is only about 50 miles from Terre Haute, IN (60,000 residents). Lyons is also about 50 miles from Bloomington, IN (85,000 residents). As a result, there are two cities of substantial size within less than an hour’s drive for residents of Lyons. Lyons appears to meet the geographic limitation of the HIRE Act.
Workforce and Infrastructure
While Lyons’ population is approximately 700 residents, Greene County has about 32,000 residents. Lyons is also near two major Interstate Highways: I-70 is to the north, and I-69 is to the south. U.S. Highways 150 and 231 are also nearby. The county’s workforce size may suffice for federal agency relocation. Depending on the definition of infrastructure, highways and airports near Lyons may also meet the HIRE Act’s criteria.
Opportunity to Double the Impact of a Federal Agency Relocation
The town of Switz City has a “Distress Score” of 120.97, the second highest such score in the state. Switz City is located only about 4 miles from Lyons. Federal Agency Relocation to Greene County Indiana near or between the towns of Lyons and Switz City initially seems possible. A federal agency setting its headquarters and job location for employees in this area would have a positive economic impact on the two towns in the state of Indiana with the highest Distress Scores. The HIRE Act notes that Health and Human Services would relocate to Indiana. This federal agency relocation could result in the move of thousands of employees to this region.
What Should Employers do?
Employers in the ten states identified as economically distressed by the HIRE Act should expect a rise in demand for workers due to federal agency relocation. Companies should examine their corporate growth initiatives to ensure they can remain competitive as the local labor market changes.
Companies that interact with federal agencies in their current location should review their relocation programs. Employers may need to consider relocation for employees to be near the agency’s new headquarters location.
Industry Benchmarking Studies Help Employers Compare Their Relocation Program
GMS has recently published several Industry Benchmarking Studies to help employers learn whether their company’s relocation program is designed following industry-specific best practices. There are many benefits to a corporate relocation policy benchmarking.
Industry best practice is to schedule a relocation program and policy review every 12 to 18 months to ensure your company maintains its competitive position. This review will also help your company learn about how the relocation industry is evolving to meet increased employee demands.
GMS’ team of corporate relocation experts has helped thousands of our clients understand how to respond to labor and economic market forces such as federal agency relocation. Our team can help your company by using industry best practices to design your relocation program.
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Contact our experts online to discuss your company’s interest in learning more about federal agency relocation due to the HIRE Act and its impact on local areas and labor markets, or give us a call at 800.617.1904 or 480.922.0700 today.