Finding accommodation in Stockholm is very challenging to say the least. The extremely regulated housing market, and high demand for homes in Stockholm make it one of the most difficult cities on the planet to secure housing. As an HR Manager, you are likely concerned about providing your expat with a new home, on a timely schedule, that is comfortable and affordable. We are also assuming that you would like to do all of this with the least amount of stress and headaches for your company and your new hire. We have some tips on how to make this happen.
We believe, based on our 24 years in the relocation business, that supporting staff during this very challenging housing market is part of a positive employer branding strategy. If you can accomplish this part of the relocation correctly, you will become known as a dependable employer and will be more likely to retain staff for longer periods of time. The expat intranets are full of Stockholm housing horror stories.
We see lots of movement of key personnel going between gaming/betting/tech companies. This is when good support is essential, both when recruiting and keeping staff. Companies that support corporate housing have less staff leakage than those who don't. Another thing to remember is that employees often change employers when their lease term is up. That is a key point to keep them happy!
We have seen new recruits turn around at the Swedish door when being faced with the Swedish real estate market. We have seen intra company transfers that have left the company all together when they have felt a lack of support. We have seen companies use a transfer to Sweden as a good way of letting staff go without spending money apart from a plane ticket and dropping them into the Sweden housing market without support or a salary that is sufficient to pay rent.
Here is some advice for best practice regarding corporate leases:
Enable a corporate lease situation - It will help you both welcome and keep your staff
When people leave your organization - allow the new employer to take over the lease.
When you recruit locally (even expats) it's good to step in and solve that issue by signing a lease for them to ensure a good start. Do not differentiate between a local hires and cross border recruitment. It doesn’t matter whether your foreign hire has just arrived or has been in Sweden for a while, they will need assistance with their housing.
When a new employer is unwilling to support with housing or taking over a lease, the recruitment usually isn't followed through. That said, we understand you want people to stay for the right reasons and not just because of a complementary corporate lease.
Here are 4 scenarios where different companies opt for different options.
Company has signed a long term lease, and renews when necessary. Normally used for people with 1-5 years employment contracts in Sweden.
Even with this scenario, sometimes a tenant can't stay in the property for the full 2-5 years if the landlord is returning, etc. If this happens, typically the company will provide a new Homefinding and a corporate lease for the remainder of the employment.
PRO- Your company gets to keep a loyal staff member that feels supported by the company.
CON- Your company may have a cost and admin around the person's housing more than once, yet it's probably less costly and disruptive for the company and the colleagues that are all involved in this and have to pick up the slack when a person spends many, many hours for weeks to sort out a stressful situation. Worst case is if the employee focuses on the solution and part of that solution includes leaving the company due to lack of housing.
Signing a Corporate lease for 1-2 years with a clear intention to stop support at that time. Tenant/employee is well aware that they have to sort out their housing situation at that time.
PRO- You do not have to worry about handling the lease for an unlimited amount of time and your employee is given clear instruction to start looking and saving to buy an apartment. This will give them the best advantage to go out on their own to find housing and be successful.
CON- Stockholm is very expensive, banks are generally unhelpful, and there may be pressure on the employer to considerably increase salaries due to the fact that the employee is under pressure to save money for a mortgage. This is when we often see employees change employers in order to get their salaries increased to be able to buy something.
Companies Support with home finding but not the lease.
PRO- No administration for the company.
CON- This may be an uncomfortable start when the employer's support is questioned and relocations can be canceled with this model - we see it fairly often. If the salary is on the low side for the housing market it is a very cumbersome start and missions can fail or worse, the employer has to go in and sign the lease after all, but dissatisfaction has arisen so it's a lose lose.
Employer supports with a corporate lease year 1-2 and allow a second home finding when needed also with a corporate lease. If needed, allow them to renew the lease as long as they are in the same property.
PRO -Keep staff happy and productive.
We see that employees make rational decisions and the disposable income is of course at the core of that. They even leave jobs, companies, and co-workers that they love if they have to. When the housing is scarce, expensive, and subject to being a serious issue for employees they;
1. Look for a position with a higher salary
2. Look for an employer that will support them with a lease and home finding (you will probably have that discussion with new recruits if they are already here)
3. Ask to be transitioned into another location where housing is less of an issue and a lower cost
Over the years we have had a handful of problems with corporate leases created by the tenant, what the landlord wants to achieve, ie a tenant that takes good care of the property is usually granted since the employee is keen on looking good in the eyes of the employer.
You may be interested in these blog posts on housing in Sweden.
If you would like to learn more about how to get these tenants here, then you might be interested in this Immigration Guide on our website with several articles on the subject.