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To qualify for participation, a respondent must have relocation responsibility and work for a company that has either relocated employees within the past two years or plans to relocate employees this year. Atlas sent invitations via e-mail, and 408 relocation professionals completed online questionnaires between January 6 and February 28.
Expectations Improve, Return to Non-Recessionary Levels
Overall, expectations for relocation volumes and budgets continue to improve over 2009. The numbers reflect a greater optimism than seen in 2010, similar to 2004 post-recessionary expectations. Nearly a third of companies expect 2011 volumes to increase, with one-fourth or more firms across company size expecting budget increases as well. Additionally, far fewer firms across company size expect decreases in volumes and budgets compared to 2009 and 2010.
Mid-size and large firms are most optimistic: close to a third or more expect volumes to increase; roughly a fourth of mid-size and a third of large firms expect budget increases as well. Additionally, more than half expect volumes and budgets similar to last year. Half of large firms and a third of mid-size firms saw relocation volumes increase in 2010; 43% of large firms and 28% of mid-size firms saw bigger budgets too. More than nine out of ten anticipate further improvement or stability, which is especially noteworthy compared to 2009, when roughly half or more expected volume and budget decreases. While small firms are less optimistic, their expectations show improvement over 2009-2010: one-fourth expect volume and budget increases, up slightly from 2010 (21% and 20%) and more than double 2009 (10% and 12%); only a fifth or more expect decreases, down from roughly a third in 2010 and almost half in 2009.
The percentages of firms that expect increases in volumes and budgets have risen to non-recessionary levels across company size. The percentages expecting further cuts have fallen near or below these levels as well, indicating the recovery that began in 2010 is likely to continue in 2011.
Greater Expectations
International volume expectations also improve in 2011, with significantly more firms anticipating an increase than in the past two years (28% vs. 18% and 15%). Additionally, the percentage expecting decreases remains far lower than 2009 (16% vs. 39%). Over half expect levels to remain similar to last year. Expectations for increased volumes are greatest among large firms (41%), followed by mid-size firms (25%). Small firms are less optimistic: only 15% expect an increase, and 27% expect a decrease in international relocations.
The international relocation market appears to have fared similarly to overall relocation in 2010. About a third of firms saw increased volumes, roughly half reported stability, and less than a fifth noted declines. One notable difference: just 39% of large firms say volumes increased internationally (compared to 50% overall), while 43% state volumes remained stable (compared to 32% overall). The fact that international volumes retracted far less than overall relocation in 2009 among large firms (17% vs. 53%) may be a factor. Across company size, international expectations for 2011 are similar to overall relocation except at small firms: far fewer expect volumes to increase (15% vs. 25%) and more expect decreases (27% vs. 20%).
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Progressively Greater Optimism for U.S. Economy and Individual Firms
For the second year in a row, most firms across company size expect their overall financial performances to improve compared to the previous year. Half or more expect the U.S. economy to improve as well. Large firms are more likely to expect improvements in their own performance and the economy than mid-size and small firms (80% vs. 71% and 66%, 64% vs. 50%, respectively). However, views of the U.S. real estate market are similar across company size: more than half expect stability compared to 2010, and around a third expect improvement. Even though slightly less optimistic than last year, the expectation is stability or betterment, as opposed to the dire predictions of 2008-2009.
Depressive Pressures Lessening on Middle Management and Entry Level Relocations
The depressive impact of economic/market pressures appears to be lessening on entry level/new hire and middle management relocations. In 2008 and 2009, roughly four out of ten firms decreased these relocations in response to pressures; in 2010, only about one-fourth indicated doing so. Far fewer small and mid-size firms decreased relocations for entry level/new hires (21% vs. 35%, 28% vs. 40%) and far fewer firms of every size decreased middle management relocations compared to 2009 (28% vs. 37%, 26% vs. 39%, 35% vs. 52%). While less pronounced, the overall percentage decreasing senior manager/executive moves fell also (21% vs. 28%) and roughly one-fifth continue to report these relocations grew in response to market pressures. More than half of firms across company size report moves for these employees were unaffected by economic/market pressures.
To ascertain if economic/market pressures impact assignment duration, the survey posed two new questions this year. Most firms of all sizes report no effect on the duration of assignments (long or short-term). However, among affected firms, nearly twice as many note long-term assignments decreased rather than increased (20% vs. 12%). Large firms were most apt to indicate assignment length was impacted (44% and 47% vs. 32% or less of other firms), with far more reporting the number of short-term assignments increased rather than decreased (37% vs. 10%).
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Employee Reluctance Lessening; Housing/Mortgage Issues Continue to Play Major Role
While over half (59%) of companies report employees declined relocation in 2010, less than one-fifth saw the number increase over 2009. Compared to the two prior years, increased employee reluctance fell (18% vs. 28%+). Historically, mid-size and large firms have been hardest hit by increased reluctance; however, this year only about one-fifth of firms across company size cite year-to-year increases in declined relocations (far below the 28%+ of mid-size and 40%+ of large firms in 2008-2009).
Overall, increased employee reluctance remains somewhat elevated and similar to 2007 (18% vs. 16%), which corresponds to the same year housing/mortgage concerns began climbing as a reason relocations were declined, roughly double that of 2002-2006 (7% to 9%). Housing/mortgage concerns remain the top reason for relocation declines for the third straight year, although the percentage dips slightly compared to 2009 (69% vs. 77%). Family issues/ties (the former first-place issue since 1983) remain in second place (55%).
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Maintaining Balance
Most firms (67%) offered incentives to encourage relocations in 2010, similar to the past two years (66% and 60%). Extending temporary housing benefits was the most popular, offered by roughly three-fourths or more firms across company size. Relocation bonuses (50%) and loss-on-sale protection (46%) rounded out the top three. Although roughly half of all size firms offered relocation bonuses, mid-size and large firms were more likely than small to offer loss-on-sale protection (50% and 64% vs. 21%, respectively). About nine out of 10 companies said extra incentives "almost always" or "frequently" convinced an employee to relocate, similar to the past two years.
Most firms (61%) used cost containment measures in relocation policy/practice in 2010 as well. Nearly one-third of all-size firms capped relocation benefit amounts; roughly one-fifth limited miscellaneous allowance benefits. Large firms appear to have used these measures more frequently and are most likely to have offered pre-decision counseling (39%); reviewed/renegotiated supplier contracts (38%); offered short-term/extended travel/commuter arrangements rather than relocation (27%); tightened real estate assistance requirements (27%).
Shifts Indicate Recession Impact Lessening; Real Estate Market Still Issue; Impact Differs by Company Size
Factors impacting relocations point to the beginning of a post-recession turnaround last year. Economic conditions and the lack of qualified local talent tied as top external issues (40%), a notable shift from 2009 when economic conditions dramatically outpaced talent needs. However, the real estate market was similarly weighted to the top two factors, remaining elevated compared to 2007 (38% vs. 22%).
The impact of external factors differs widely by company size. At large firms, economic conditions and the real estate market affected relocations nearly equally (55% and 54%), while the lack of local talent had far less impact (29%). Conversely, the top issue for mid-size firms was the lack of local talent (47%); economic conditions and real estate market impacts measured lower (32% and 36%). For small firms, the lack of local talent and economic conditions were top issues (41% and 37%), while real estate rated far lower (27%).
In light of historical data and economic cycles, notable trends appear. The overall percentage of firms reporting economic conditions as a major factor has fallen since 2009 (40% vs. 53%), but remains within historical recessionary/recovery ranges (see trend chart). This is true across company size, indicating that 2010 volumes were still universally impacted by economic concerns, albeit to a lessening degree. After progressive increases over nearly two decades, the lack of qualified local talent hit its lowest level since 1996 in 2009 (31%). While the impact of this factor overall grew substantially in 2010 (40%), it is far below historic highs (48%+). Similar trends appear across company size, indicating that while the influence of qualified local talent shortfalls increased collectively, the effect was felt much less acutely than during years of economic growth in the recent past.
Since real estate market impact data has only been collected for the past four years, trend identification is more limited. However, while the real estate market's impact remains elevated across company size compared to 2007, it has progressively lessened over the past two years for mid-size firms. Just over a third (36%) report it had a major impact on volumes in 2010, compared to 50% in 2008 and 43% in 2009.
Additional Insights:
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Company Growth Retakes Top Spot, Budget Constraints Lessen; Still Recessionary Levels
While company growth retook the top spot among internal conditions after falling in 2008-2009 and budget constraints dropped significantly (21% vs. 29%), the percentage of firms citing company growth remains similar to previous recessionary lows (see trend chart), despite a substantial increase over 2009 (37% vs. 24%). The percentage of firms citing budget constraints also remains elevated compared to previous periods of economic growth, although markedly below previous recessionary peaks. The severity of the most recent economic retraction may signal a protracted recovery period before company growth regains its former prominence.
The top internal factor does vary by company size, but the increase in company growth is the key trend for firms of all sizes. It is first among large firms (41%), followed by corporate reorganization (37%), knowledge/skills transfers (34%) and budget constraints (32%). At mid-size firms, promotions/resignations remain the largest internal factor for the third straight year (42%), nearly identical to 2008-2009 (42%+); in most other years it has been second to company growth, except for its top ranking in 2002. Knowledge/skills transfers, company growth, and corporate reorganization follow with nearly equal weights (36%, 35%, and 34%). Company growth is the top internal factor cited by small firms (35%), followed by knowledge/skills transfers (27%) and promotions/resignations (23%).
Additional Insights:
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Increases Overall, Across Company Size
Two-thirds of companies outsourced relocation services in 2010, up significantly from 2005-2007 and 2009 (55%+) and matching the highest percentage reported in nine years. Generally, mid-size and large firms continue to outsource a greater variety of relocation services than do small companies. Large firms are more likely than mid-size firms to have outsourced real estate sales/marketing, real estate purchases, orientation tours, audit/payment of invoices, and supplementary services. Close to one-fifth or more of large and mid-size companies outsourced the relocation-related services listed in the survey.
Overall Shifts
Outsourcing Changes by Company Size
Significantly more mid-size firms outsourced than in 2009 (74% vs. 62%) with increases across every category, resulting in most roughly meeting or exceeding nine-year highs. The largest surge is seen in outsourcing of household goods carrier contracts, up from the lowest level in eight years (23%) to the highest in nine (56%). Family transportation/accommodations outsourcing also increased substantially (40% vs. 21%), returning to a level within its historic range (2002-2008, 31% to 46%).
Most large firms outsourced in 2010 (89%), the highest level in nine years and significantly above 2009 (78%). Nearly all category percentages increased compared to 2009, most by 9% or more. After falling in 2009, percentages of those outsourcing claims assistance, household goods carrier contracts, family transportation/accommodations and shipment monitoring grew significantly, similar to levels throughout most of 2002-2008. The percentages of large firms outsourcing real estate sales/marketing, shipment monitoring and expense tracking/reimbursement are the highest on record.
Overall, outsourcing at small firms matches the highest percentage in nine years (41%: 2003). Increases occur across most categories, with most levels approaching or exceeding nine-year highs.
Additional Insights:
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Greater Use of Multiple Reimbursement Methods Continues
The growing importance of lump-sum payments and partial reimbursement is unmistakable, with nearly half of firms using these methods for transferees. Full reimbursement remains most popular overall (57%); however, findings reveal growing interchangeability in reimbursement methods. Small firms are less likely to offer transferees a lump sum option compared to mid-size and large firms (38% vs. 55% and 53%), and large firms remain the most likely to offer full reimbursement (66% vs. 50% and 55%).
For new hires, lump sum payment is the most popular reimbursement method (55%), followed closely by partial reimbursement (51%). Less than half (47%) of firms now offer full reimbursement. While not the lowest percentage historically, this is the first time both lump sum and partial reimbursement have surpassed full reimbursement for new hires. Lump sums and partial reimbursement are the top two methods among both small and mid-size firms (50% and 47% vs. 41%, 58% and 55% vs. 46%, respectively). However, full reimbursement is tied with lump-sum payments at large firms (57%), followed by partial reimbursement (50%).
Additional Insights:
Lump Sum Application:
To better understand the increasing use of lump sum payments, this year's survey posed two new questions about covered relocation costs and employees to whom lump sums are offered. Overall, roughly half or more firms using lump sums typically offer them for miscellaneous allowances or travel expenses. Over a third offer them for temporary housing or the entire relocation cost. Over a fourth offer them to cover household goods shipping/storage expenses. However, differences appear across company size. Small firms use lump-sum payments for the entire relocation cost and rental assistance/transactions far more often than mid-size or large firms (49% vs. 38% and 29%; 24% vs. 13%, respectively). Additionally, small and mid-size firms use lump sums far more often than large firms for household goods shipping/storage expenses (37% and 33% vs. 10%). Large firms are the most likely to use lump sums for miscellaneous allowances compared to small or mid-size companies (74% vs. 42% and 53%); they are also more likely than small firms to use lump sums for temporary housing expenses (48% vs. 31%).
Close to half or more firms indicate employees of nearly every type commonly receive lump sums with one exception: only 31% report these payments typically go to homeowners. In general, entry level employees are more likely to receive lump sums than executives (52% vs. 43%), new hires more likely than transferees (59% vs. 47%), and renters more likely than homeowners (42% vs. 31%). There is less discrimination between new hires and transferees at mid-size (60% vs. 53%) and large firms (55% vs. 52%) than at small, where new hires are far more likely than transferees to get lump sum payments (60% vs. 36%). While mid-size and large firms more commonly offer lump sums to entry-level employees than to experienced professionals or executives (58% vs. 44% and 38%, 69% vs. 48% and 44%, respectively), small firms are more likely to offer such payments to experienced professionals or executives than to entry-level employees (51% and 47% vs. 32%).
Additional Insights:
As in the past eight years, most firms regardless of size report carrier transportation expenses are paid directly by the company for either transferees or new hires. However, small firms continue to be more likely than large or mid-size firms to have moving expenses paid by the employee and then reimbursed.
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On average, as in the previous eight years, nine out of ten companies reimburse or pay some relocation costs for transferees or new hires. Overall, coverage of core relocation expenses (i.e. pack all items, move unlimited weight, unpack all items, etc.) increased slightly this year with one exception: the percentage of firms offering to move an automobile (76%) rose significantly to its highest level in nine years. The percentages of firms that cover other core relocation benefits approach historically high levels as well. Across company size, the percentages of firms that reimburse core relocation expenses increased compared to last year with two exceptions: large firms offering to cover unlimited weight dropped slightly (59% vs. 63%), while the percentage of small firms that pack all items stayed the same (67%).
Half or more of companies reimburse/pay to:
Overall, percentages of companies offering individual non-core relocation benefits change little compared to last year. The numbers are well below historic peaks and close to nine-year lows, with two exceptions: the percentage that move a second automobile is similar to historic highs (46% vs. 45%+), and the percentage that pick up items from a second home matches its historic high (20% in 2004 and 2008).
Specialized Assistance for Homeowners/Renters
Most firms offer specialized relocation assistance for homeowners, however, small firms remain less likely to do so than mid-size or large. Similar to last year, the percentage of firms offering loss-on-sale reimbursement remains significantly elevated over 2007 (28% vs. 20%); the percentages of firms offering qualified home-sale programs and bonuses/incentives for employee-generated home sales stay significantly above 2007-2008 as well (40% vs. 31% and 32%, 27% vs. 21% and 22%). Additionally, the percentage offering mortgage subsidies/allowances remains significantly lower than in 2008-2009 (16% vs. 22% and 23%). However, two shifts of note occur compared to last year: more firms are reimbursing employees for home sale costs (58% vs. 50%) and offering duplicate housing assistance (37% vs. 28%); these are the highest percentages in five years.
For homeowners, more than half of firms offer the following to transferees or new hires:
Most firms offer specialized relocation assistance for renters, however, small firms remain less likely to do so than mid-size or large. Percentages of firms offering each type of renter-specific assistance remain nearly the same or increase slightly with one exception: firms offering to reimburse/pay security deposits decrease slightly (15% vs. 19%). Compared to the past eight years, however, significantly fewer firms apply temporary living allowances toward rent (23% vs. 31%+ 2003-2006); reimburse/pay for hook-up fees (15% vs. 24%+ 2003-2008); and reimburse/pay for security deposits (15% vs. 22%+ 2003-2008).
For renters, more than half of firms offer the following to transferees or new hires:
While manufacturing/processing firms and for-profit service firms are similarly likely to offer specialized assistance to homeowners (91% vs. 84%) and renters (89% vs. 82%), manufacturing/processing firms are much more likely to offer most of the specific types of homeowner assistance than for-profit service firms. International firms are more likely than regional firms to offer each type of homeowner-specific assistance listed, and regional firms are less likely than international firms to offer renter-specific assistance overall (81% vs. 91%).
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Employment Assistance Remains Stable
Forty-four percent of all firms offer employment assistance to the spouse or partner, similar to highs reported over the past eight years. For large firms, the percentage falls just below the high in 2003 (60% vs. 62%); at small firms the level is similar to the past eight years (40% vs. 32%+) but trends higher than every year except 2009 (48%). The percentage of mid-size firms offering this assistance decreases from last year (37% vs. 47%), but remains similar to the past eight (except for 2007: 18%). At firms offering assistance, roughly one out of every four relocations has involved spousal employment assistance since 2007.
Overall, the percentage of firms that say a spouse's/partner's employment "almost always" or "frequently" affects an employee's relocation remains similar to the past two years (46% vs. 40% and 42%), below the high in 2007 (52%). However, it is slightly elevated compared to 2003-2006 (42% to 44%) and significantly above 2008 (39%).
Short-Term Expectations Increase
Far more firms overall expect international short-term (less than twelve month) assignment use to increase compared to 2009-2010 (24% vs. 13% and 15%), similar to 2005-2007 (22%+). This follows a decrease in the standard use of short-term assignments internationally among mid-size firms compared to last year (9% vs. 22%), while 17% of small and 13% of large firms report such assignments remain standard practice (similar to the past five years). Far more mid-size and large firms expect to use shorter relocation assignments this year than in the past two (25% vs. 7%+, 32% vs. 19%+). Expectations for increase remain similar to the past six years at small firms, although up slightly compared to the past two.
Overall Level Increases Significantly
Significantly more firms outsourced internationally in 2010 (72%) compared to 2009 (62%), similar to the eight-year high in 2008 (74%) and significantly above 2004-2005 and 2007 (58%+). Increases were reported in almost every outsourcing category; the most noteworthy occur within the following: destination services/orientation tours (45% vs. 36%), household goods carrier contracts (43% vs. 34%), arrangement of temporary accommodations for families (43% vs. 33%), securing rental property (40% vs. 31%), arrangement of international transportation for families (32% vs. 18%) and international real estate (17% vs. 9%). Outsourcing levels across most service categories are significantly above the lowest recorded over the past seven years, yet below historic highs. Three exceptions meet or exceed historic highs: destination services/orientation tours, temporary accommodation arrangements for families, and intercultural and language training.
As they have for the past seven years, most mid-size and large firms outsourced international relocation services in 2010. Although the percentage of small firms doing so fell significantly in 2009 (30%), levels are now close to 2007-2008 highs (42% vs. 49%+) and well above 2004-2005 lows (23%+). Similarly, after falling in 2009 (65%), the percentage of mid-size firms approaches the 2008 high (74% vs. 76%), significantly above the low in 2007 (59%). The percentage of large firms outsourcing internationally is the highest in eight years (91%), significantly above 2004, 2006-2007 and 2009 (76%+). More than half of the large firms responding outsourced destination services/orientation tours, intercultural and language training, securing rental property, visa/immigration services, and temporary accommodation arrangements for families during international relocations last year.
Among companies that outsourced relocation services domestically in 2010, the percentage that also did so internationally remains similar to 2003, 2005-2009 (84% vs. 79%+) and significantly above 2004 (70%). Large firms were much more likely to outsource internationally than mid-size firms; however, they showed similar propensities for outsourcing household goods carrier contracts, temporary accommodation arrangements for families, shipment monitoring, transportation arrangements for families, property management, international relocation program management, and international real estate services. Across categories, both mid-size and large firms were more likely to outsource international relocation services than small firms.
Most Additional Considerations, International Employment Assistance Stable
Most firms (78%) report differences between domestic and international relocation policies in 2011, although this is the lowest percentage to offer additional considerations in nine years. Overall, individual policy consideration percentages are similar to last year, with many increasing slightly. Historically, most policy considerations approach or surpass nine year lows, significantly below historic highs, yet remain similar to most other prior years. There are three exceptions: additional leave time (22%) remains significantly lower than 2008-2009 (30%+) and 2003-2007 (47%+), extended per diem charges (13%) remain significantly below 2003-2007 and 2009 (19% to 25%), and higher rental allowances approach nine year highs (42%) and are significantly above historic lows (2005-2006: 31%+).
Thirty-eight percent of companies offer to help find jobs for spouses or partners relocating internationally, similar to 2006-2010 (33% to 46%). While fewer mid-size firms offer this assistance than did last year (39% vs. 48%), it remains similar to the past five years and significantly above the roughly one-fifth or less who offered such assistance from 2004-2005. While the percentage of small firms is also down slightly from last year (33% vs. 36%) and well below highs in 2007 and 2009 (42% and 45%), it remains similar to most prior years and substantially above 2003 (19%). Forty-one percent of large firms offer this assistance, similar to most of the past eight years, and markedly above 2004-2005 (24% and 28%). For international moves, both small and large firms are more inclined to offer networking assistance than mid-size firms (17% vs. 6%), while firms of all sizes are similarly disposed to pay for a work visa or outplacement/career services from an outside firm. However, large firms are the most willing to provide resume-preparation assistance (17% vs. 8%+) or interviewing-skills training (17% vs. 2%+) comparatively.
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