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Relocation Policy Innovations
Cathy BaumanRunzheimer International
June 9, 2011
Runzheimer International
● Mobile – 45%
● Concern: Employee Productivity
● Benefit: Employee Satisfaction & Competitive Advantage
Mobile Workforce
Business Travel Business Vehicles/Fleet
Route Planning & Logistics
Relocation Virtual Office
International Assignments
• Mobility cost per employee—$7,350• Business Travel—32% expect spending
to increase• Business Vehicles—67% concerned with 24/7
liability with company-provided vehicles• Virtual/Home Office – need to develop policy• Corporate Aircraft—executive use dropped;
use by ‘managers of multiple sites’ increased• Relocation—43% expect increase in volume
Benchmark Key Findings
• What Changes Have You Made to Your Relocation Policy in the Past Year?- 40% None
- Remainder Various -- Increased Loss on Sale -- Offered Pre-Decision Counseling -- Reduced Mandatory Marketing Time
and Increased Temp Living Assistance
DOMESTIC MOBILITY
15%
39%
24%
15%
Policy Updates
5 Years2 Years1 Year6 Months
RELOCATION POLICY UPDATES
• Number of Policies- 3 Policy Tiers – Average
• Various Changes:- Increase Loss on Sale- Incentive to Rent- Extending Marketing Time- Extending Temp Living Benefit
POLICY TIERS/ADDITIONS
Home Sale Programs 54% Guaranteed Buyout 23% BVO 2% BVO & GBO
Loss-On-Sale Program 84% Provide Caps
- 15% - $50K- 11% - $10K & $30K
- 5% - $100K
HOME SALE PROGRAMS
88%
12%
Negative Equity Assistance
NoYes
EQUITY ASSISTANCE
• Do You Provide a COLA?- Yes – 73%; No – 27%
• Do You Provide a COLA for High Cost Locations Only?- Yes – 76%; No – 24%
• Do You Provide a COLA for All Transferees?- Yes – 28%; No – 72%
• Do You Provide a COLA to Homeowners and Renters?- Homeowners – 92%; Renters – 92%
COST OF LIVING ALLOWANCES (COLAs)
• What Level of Employee Receives COLA- Transferee – 79%- Executive – 42%
- Experienced New Hire – 38%- New Hire – 38%- Other – 25%
EMPLOYEE LEVEL FOR COLA
• COLA Thresholds- 48% No Threshold- 24% - Threshold = 5%- 12% - Threshold = 10%
• COLA Caps- 96% No
• Mortgage Subsidy- Yes = 52%; No = 48%- 23% Subsidy Based on COLA
COLA THRESHOLDS, CAPS & SUBSIDIES
• Do You Have a Formalized Lump Sum Policy?- Yes = 82%; No = 18%
• Number of Policies- 30% More than 5 Policies- 21% = 2 Policies- 18% = 4, 5 Policies
• Temp Living Days – Homeowner- 37% = 30; 28% = 60; 8% = 45
• Temp Living Days – Renter- 51% = 30; 8% = 60
LUMP SUM POLICIES
• Temporary Living or Renter – 53%• Other – 53%• Talent Management – 12%• Virtual or Home Office Program – 12%
NEW POLICIES/PROGRAMS DEVELOPED
Survey targeted strategic objectives and policy offerings that companies have adopted or are considering adopting in response to today’s mobility environment
Two Major Findings:• Companies once again expanding expatriate
population• Companies adopting increasing number of mobility
policies and compensation approaches, with a continuing trend toward multiple policy types and adoption of lower cost alternative solutions
Source: AIRINC
GLOBAL/INTERNATIONALMOBILITY
• 42% of Companies Report Increase in Expatriate Population in 2010 Compared to 26% in 2009
• US and Asia Pacific Companies More Likely to Increase Expatriate Population Numbers at 53% and 50% respectively
• Only 38% of European Companies Expect to Increase Their Expatriate Populations in 2011 although 52% report populations to remain stable
EXPATRIATE POPULATIONSINCREASING
• Expatriate Population Growth Strongest in High Tech, Financial & Professional Services, Manufacturing and Transportation Industries
• Companies Report on Average 3-4 Formal Assignment Policies- Most Common:
-- Balance Sheet 83%-- Short Term – 73%-- Localization – 45%-- Host Plus 21%-- Commuter 21%
EXPATRIATE POPULATIONSINCREASING
• Half of companies are looking to adopt new policies in 2011.-- Most common policy type under consideration is Localization Plus – 28%-- Localization – 26%-- Reduced Balance Sheet – 21%-- Host Plus – 21%-- Commuter – 21%
GLOBAL/INTERNATIONAL POLICIES
• Decision-Makers Continue to Explore and Implement Los Cost Alternative Packages
• 2010 – 15% of Companies ImplementedOne or More Low Cost Alternative Package
• 30% More Considering
• 44% Respondents Package in Active Use
ALTERNATIVE PACKAGES
• Balance Sheet is Still Most Popular Expat Compensation Scheme- 83% Respondents use Balance Sheet- 74% Companies use Balance Sheet
Exclusively for Long Term Assignments- 60% Use Balance Sheet as Only Approach
to Long Term Assignments- 14% Use Mix of Full and Reduced Balance
Sheets.
BALANCE SHEET
• Host Plus Used Most by Financial Firms and Companies Headquartered in Asia-Pacific and European Regions
• 43% Asia-Pacific• 35% European• 14% U.S. Companies use Host Plus• 45% of Financial Firms Regardless of HQ
use Host Plus
HOST PLUS
• Top Sending Countries- U.S. – 80%- U.K. – 71%- Australia – 31%- Canada – 26%- Singapore – 21%
• Top Receiving Countries- U.S. – 65%- U.K. – 50%- China – 41%- Singapore – 29%- Hong Kong – 22%
SENDING & RECEIVING LOCATIONS
• Tax and Immigration Top Challenges for Mobility Practitioners
• Other Challenges- Designing globally consistent policies- Aligning mobility with talent management
TAXES AND IMMIGRATION
