2005 Corporate Relocation Survey

 
Results 38: Corporate Relocation Survey - Year 2005 Results 38: Corporate Relocation Survey - Year 2005
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Who Responded?

Atlas is pleased to present the findings from its 38th annual survey of corporate relocation professionals. This is the third year the study was conducted using the Internet, whereby respondents were invited via e-mail to participate. A total of 330 online questionnaires were completed between January 26 and March 7, 2005. In order to qualify for the survey, a respondent must: 1) have relocation responsibility, and 2) work for a company that has either relocated employees within the past two years or plans to relocate employees this year.

  • Most respondents (76%) work in human resources or personnel departments for
    • service (44%)
    • manufacturing/processing (36%)
    • financial (10%)
    • government and military (2%)
    • and other sectors (8%)
  • Close to half (47%) of the companies surveyed this year are international firms.
  • Based on the number of employees, responding firms are categorized by size for analysis:
    • 46% have less than 500 salaried employees (small firms)
    • 31% have 500-4,999 salaried employees (mid-size firms)
    • 23% have 5,000+ salaried employees (large firms)


Highlights of Results

Could 2005 be another year of record relocation volumes? Is the full reimbursement option gaining or losing favor? What changes in relocation are expected internationally?

The annual Atlas Survey of Corporate Relocation Policies sheds light on these and other issues of importance to all of us who work in relocation. To follow is a brief summary capturing the highlights from this year's results.

 

Relocation Volume and Budgets —

Expectations for Increases Similar to 2004

One-third of responding firms expect their relocation volumes to increase in 2005 and 32% expect their relocation budgets to increase (last year's survey noted similar expectations for 2004). While expectations for increases are expressed by firms of all sizes, more large than mid-size or small firms expect increases. Similar to last year, around half of firms, regardless of size, expect relocation volumes and budgets to stay the same.

Question 8: Relocation Volume
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Question 9: Relocation Budget
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External Factors —

Lack of Qualified People Locally, Economic Conditions, Competition

Seventy-seven percent of firms indicate at least one external factor affected their number of relocations in 2004, with "lack of qualified people locally" cited most often (48% of respondents). Last year's top factor, "economic conditions," mentioned by 40% of respondents, ranks second this year.

As occurred last year, differences appear by company size. The top external issue large companies indicate for 2004 relocations is "economic conditions," cited by 57% of these firms (down from 70% last year). Small companies again indicate "lack of qualified people locally" as their most important issue. Of note is that significantly higher percentages of large (44%) and mid-size (49%) companies, compared to 2003 (23% and 36%, respectively), agree this was a significant factor in 2004.

One additional point of difference for large companies is the greater impact of competition, both domestic and international, noted in 2004.

  • Over a third indicate the growth of one form of competition (domestic or international) had a significant impact on relocation volume in 2004, significantly greater than small and mid-size companies (11% and 20%, respectively) and that indicated last year by large firms (20%).
Question 13: External Factors
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Internal Factors —

Growth, Decreasing Impact of Budget Constraints

Over half of firms, regardless of size, indicate "growth of company," as the top internal factor affecting their relocations in 2004. While "promotions/resignations" and "corporate reorganization" are still the second- and third-place internal factors, the percentage of firms indicating "budget constraints" dropped significantly, regardless of company size.

  • For mid-size and large companies, there is a significant increase over 2003 in the percentage citing "increased production" as a factor in relocation volume in 2004 (20% and 25% vs. 9%, respectively).
  • There is a significant increase in the percentage of large companies citing "international expansion," "expansion of facility," and "acquisitions/mergers" as impacting 2004 relocation volume compared to 2003 (25%, 26%, and 32% vs. 8%, 14%, and 23%, respectively).
Question 14: Internal Factors
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Relocation Policy —

Most Firms Have Formal Relocation Policy, Centralized Department Handling Relocations

Seventy-six percent of firms indicate they have a formal relocation policy. Though still less likely to have this in place than mid-size to large firms, the majority of small firms responding indicate having this policy in place.

  • Over 80% of firms, regardless of size, indicate administering employee relocations from a centralized, or corporate, department.

Centralized Relocation Departments Responsibilities Vary

The majority of companies responding who have a centralized relocation department indicate that this department manages domestic relocation programs and household goods carrier selection. However, while similar percentages of all size firms indicate these departments control carrier selection for household goods, other responsibilities appear to vary by company size.

  • Departments at small firms are less likely to be responsible for managing domestic relocation programs than at mid-size or large firms.
  • Small companies are more likely to have this department handle air travel, office relocation, and site and space selection for office relocations than mid-size or large firms.
  • Large companies are more likely than mid-size or small firms to have this department manage international relocation.

2004 Outsourcing Similar to 2003

Sixty-three percent of responding companies indicate they outsourced relocation services during 2004, down slightly from 2003. Real estate services were the most popular item outsourced, with close to half indicating outsourcing "real estate sales" and forty-two percent indicating outsourcing "real estate purchase/marketing." As in previous years:

  • Small companies are still much less likely to outsource relocation services than mid-size or large firms.
  • Mid-size and large companies continue to report outsourcing a greater variety of their relocation services than small companies.
Question 17: Outsourcing
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Question 17: Outsourcing
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Internet Use for Relocation

Slightly more companies indicate they used the Internet for relocation-related matters in 2004. As in previous years, the majority of all size firms indicate using this tool to communicate via e-mail with relocating employees, and overall, large firms are more likely to utilize the Internet.

  • The majority of large companies indicate using the Internet to research relocation-related matters, access relocation company Web sites for reporting or other services, and to complete online forms for transferee relocation.
  • Significantly more mid-size companies reported using the Internet for relocation-related matters in 2004; a third or more indicate using relocation company Web sites for reporting/other services, and to complete online forms for transferee relocation.

 

Relocation Reimbursement/Payment —

Cost Coverage Holds Steady

Similar to last year, most (89%) companies reimburse or pay for some relocation items for either transferees or new hires, and the majority provide the following benefits:

  • packing of all items (81%)
  • moving an automobile (68%)
  • moving exercise equipment (58%)

Overall, coverage of core expenses held fairly steady from 2003 to 2004, with the percentage of companies offering "non-core" relocation benefits (e.g., picking up belongings from a secondary residence, moving a boat or satellite TV dish, etc.) similar to last year as well.

Eighty-seven percent of firms indicate they offer specialized relocation assistance for employees who rent, and the majority of firms offer homefinding trips and offer to reimburse/pay for lease cancellation.

  • Mid-size and large companies are more likely to offer renters specialized assistance.
  • Mid-size companies are roughly twice as likely as small firms to offer storage.
  • Small firms are more likely to let employees apply temporary living allowances toward rent.

A majority of all firms, regardless of size, continue to indicate they allow the hiring of employee spouses. Just under two-thirds allow two weeks or less for an employee to accept a transfer offer, and, on average, relocated employees are allowed approximately five days for house-hunting, although this varies by company size.

Transferees vs. New Hires — Majority of Companies Pay Direct, Reimburse Expenses

As in last year's survey, most firms report that carrier transportation expenses are "paid directly by the company" and that they offer relocation expense reimbursement in some form, regardless of company size or transferring employee status. However, small firms are more likely than mid-size or large firms to have relocation expenses "paid by the employee and then reimbursed" for transferees and new hires.

Most firms offer full reimbursement of relocation expenses as an option for transferees and new hires, but new hires are more likely than transferees to receive partial reimbursement as part of a relocation package.

  • Large firms are more likely than small firms to provide full reimbursement, whether for transferees or new hires.
  • More large companies indicate they offer full reimbursement to new hires than last year (76% vs. 64%).
  • Significantly fewer mid-size firms than large firms have a full reimbursement option for new hires.
Questions 21a & 22a: Transferee and New Hire Expense Reimbursement
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Carrier Selection —

Service Still Key, Majority of Firms Select Carrier for Employee Relocations

"Service" is still the most important attribute among corporate decision-makers when evaluating or selecting a carrier (nearly 9 out of 10 respondents rated this "critically important;" a "9" or "10" on a 10-point scale). When selecting a carrier, this is by far the highest rated "critically important" factor by responding companies regardless of size. However, when comparing other attributes, differences in importance appear.

  • For small and mid-size firms, "Price" is more critically important than for large firms.
  • For large firms, "Claims processing" is even more critically important than "Price."
  • For mid-size firms, "Reputation" is more critically important than for large firms.
  • "Claims processing" is more critically important to mid-size and large firms.

Roughly half of companies responding indicate they select the carrier for their employee relocations directly, and even larger percentages of mid-size and large firms indicate as such. However, mid-size and large firms are also more likely to give carrier selection to a relocation firm than small firms. Smaller companies indicate involving the employee in the carrier selection process more often than mid-size to large firms (48% vs. 21% and 16%, respectively).

Question 21b: Carrier Transportation
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Question 21b: Carrier Transportation
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International Relocation Volume —

Some Increases Expected, Majority Expect Volume Levels to Remain at 2004 Levels

Forty-six percent of responding firms transfer employees between countries.

  • Over one-fourth of these companies indicate they expect increases in international relocation volume in 2005.
  • Small companies are more likely to expect decreases, mid-size and large firms are more likely to expect increases in international relocations.
  • Over half of companies, regardless of size, indicate they expect 2005 international relocation volume to remain unchanged from 2004.

Responding firms indicate roughly one-fifth of 2004 international assignments were temporary (less than 12 months). Overall, 23% expect the number of temporary assignments to increase, but these expectations are driven mostly by large and mid-size companies' expectations. The majority of all firms, regardless of company size, expect unchanged volume in temporary international assignments in 2005.

Question 41a: International Relocation
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International Outsourcing —

Fewer Indicate Outsourcing in 2004

In 2004, significantly fewer firms than last year outsourced international relocation services (58% vs. 70%) and decreases appeared across the board regardless of company size. Although over half of large firms outsourced securing rental property and destination services/orientation tours, the percentages of firms outsourcing individual international services dropped slightly. Among companies that outsourced relocation services domestically, the percent that did so internationally fell from 2003 (from 82% to 70%), although mid-size and large firms are still much more likely than small firms to outsource international relocation services.

Question 41c: International Outsourcing
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Question 41c: International Outsourcing
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International vs. Domestic Policy —

Majority of Firms Offer Additional Considerations, Service & Scheduling Key for Carrier Selection

Most firms indicate there are differences between their domestic and international relocation policies. Close to half or more offer the following: additional tax considerations, additional leave time with at least one visit back to the U.S./Canada, allowances for children to attend certain schools, intercultural and language training, increased allowances for permanent storage, and additional leave time. As expected, mid-size and large firms are more likely to offer additional considerations than small firms.

When selecting a carrier for international relocations, "Service" is of chief importance among decision-makers (89% rate it "critically important"), but regardless of company size, "Scheduling" is more critically important than "Price." Only 24% of all companies offer employment assistance to spouses or partners relocating internationally, and 53% report at least one failed or declined international transfer in 2004.