2007 Corporate Relocation Survey

 
Results 40: Corporate Relocation Survey - Year 2007 Results 40: Corporate Relocation Survey - Year 2007
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Who Responded?

Atlas is pleased to present findings from its 40th annual survey of corporate relocation professionals. Invitations to participate were sent via e-mail, and 390 respondents completed online questionnaires between January 9 and February 28. To qualify for the survey, 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.


  • Most respondents (71%) work in human resources or personnel departments for
    • service (43%)
    • manufacturing/processing (40%)
    • financial (8%)
    • government and military (3%)
    • and other sectors (7%)
  • Half (50%) of the companies surveyed this year are international firms.
  • Based on the number of employees, responding firms are categorized by size for analysis:
    • 44% have less than 500 salaried employees (small firms)
    • 27% have 500-4,999 salaried employees (mid-size firms)
    • 29% have 5,000+ salaried employees (large firms)


Highlights of Results

Since 1968, findings from the Atlas Corporate Relocation Survey have helped relocation professionals better understand the forces that impact what they do. The survey provides unique insights into how companies across all industries govern their relocation efforts to serve the wellbeing and productivity of employees. A few of the findings from this year's survey are presented here.

 

Relocation Volume and Budgets -

Overall Expectations Nearly Identical to 2006

Over a fourth (29%) of responding firms expect their relocation volumes to increase in 2007 and 32% expect their relocation budgets to increase, nearly identical to expectations for 2006 (similar to 2004-2005, and significantly above the respective 13% and 15% levels reported in 2003). Around half of all firms, regardless of size, expect relocation volumes and budgets to stay the same, similar to the past three years. As in the previous two years, roughly a fourth or more of all size firms expect increases and more large than mid-size or small firms expect increases.

  • As in 2006, the majority of large firms expect relocation volumes to be at the same levels as last year. However, fewer large companies indicate increased expectations in relocation volume than in 2004 and 2005 (38% vs. 44% and 47%), although expectations remain significantly higher than in 2003 (only 19% projected increased volumes).
  • Expectations for increases in large company relocation budgets dip slightly lower than in 2006 and 2005 (39% vs. 44%), returning to levels near 2004 (37%); but the percentage predicting increases remains considerably above that reported in 2003 (20%).
  • Slightly more mid-size firms expect increases in relocation volume in 2007 over 2006, and significantly fewer expect decreases (10% vs. 22%). While the majority expects both budgets and volumes to remain static from last year, notably fewer indicate they expect budget decreases (8% vs. 17%).
Question 12: Relocation Volume
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Question 13: Relocation Budget
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External Factors -

Lack of Qualified People Locally, Economic Conditions, Competition

Seventy-four percent of firms indicate at least one external factor affected their number of relocations in 2006, with "lack of qualified people locally" cited the most often, regardless of company size, for the second year in a row. The impact of this factor continued to grow for large firms, with the gap widening between this factor and "economic conditions" (57% vs. 35% in 2006, 51% vs. 42% in 2005). Interestingly, while still the top factor for both mid-size and large firms, the percentage indicating "lack of qualified people locally" decreased for mid-size and small firms, falling close to levels reported for 2004.

  • The percentage of firms indicating "economic conditions" as a major factor in relocation volume is roughly half of what it was in 2003 (25% vs. 51% overall), and this holds true regardless of company size.
  • Companies in the Northeast are more likely to indicate "economic conditions" as a factor than those in the Midwest, South, or Southwest (38% vs. 18%, 20%, and 10%, respectively).
  • Companies that operate internationally are more likely than regional or national firms to indicate "economic conditions" and competition as factors (34% vs. 15% and 15%; 33% vs. 7% and 12%, respectively).

Unlike previous years, large companies in 2006 shared the same likelihood as mid-size and small firms to be impacted by the lack of qualified people to fill positions. However, large firms do continue to cite "economic conditions" more often than mid-size and small firms. Additionally, a third of large firms indicate relocation volumes in 2006 were impacted by one form of competition (either domestic or international) more often than small firms (13%), similar to the past two years.

Question 15: External Factors
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Internal Factors -

Company Growth Continues, Decreasing Impact of Corporate Reorganization,
Budget Constraint Impact Stays Low

As in the past two years, "growth of company" is cited by over half of companies as the top internal affecting relocations in 2006, significantly above levels reported for 2002 and 2003 (59% vs. 40% and 46%). Roughly a third or more of companies indicate "promotions/resignations" and "knowledge/skills transfers" as factors in 2006, but only about one-fifth of companies cite "corporate reorganization," down significantly from close to a third of companies the past four years. The percentage of firms indicating "budget constraints" in 2006 dropped to only 9%, similar to levels reported for 2005 and over three times lower than in 2003 and 2002 (31% and 28%).

  • "Growth of company" is more likely to be the driving factor for mid-size and large firms than for small firms in 2006, similar to 2005.
  • The percentage of large companies indicating "corporate reorganization" as a factor in relocation volume dropped significantly from nearly half in 2005 (49%) to roughly a third (32%) in 2006. "Promotions/resignations" as a factor for large firms also fell significantly, from 57% in 2005 to 42% in 2006 (similar to levels reported in 2004).
  • Among large firms, far fewer indicate "increased production" as a factor in relocation volumes in 2006 than in 2005 and 2004 (12% vs. 21% and 25%), returning near levels reported for 2003 and 2002 (9% and 8%).
  • For companies that operate internationally, 40% indicate "knowledge/skills transfers" was a key factor in relocation volume for 2006, significantly greater than those just regional or national in scope (17% and 24%).

The factors impacting transfers reveal growing companies struggled to find qualified people to fill roles, while corporate structure instability lessened slightly and budget constraints stayed low in 2006. Additionally, the majority of companies (75%) report their company's overall performance was better than in 2005. Responding firms carry this optimism into 2007, as the majority (74%) predicts the financial performance of their companies will continue to improve over last year.

Question 16: Internal Factors
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Most Frequent Destinations of Transfer

Companies relocating employees within the United States in 2006 indicate that the Midwest was the top destination of transfer (29%), followed closely by the South (22%) and Northeast (22%). However, for large companies, the top destination was the Northeast (29%).

  • Among firms relocating employees between the U.S. and another country (excluding Canada and Mexico), the most frequent destinations for transfers in 2006 were European, United Kingdom, and Asia/Pacific Rim countries (29%, 28% and 27%, respectively).
  • Intra-country transfers most typically occurred within Asia/Pacific Rim or European countries (33% and 28%), and continuing expatriate relocations typically occurred between Asia/Pacific Rim, European, or United Kingdom countries (39%, 25% and 22%).

 

Outsourcing -

Plateaus at 2005 Levels, Differences by Company Size

Fifty-eight percent of companies outsourced relocation services during 2006, similar to levels reported for 2005 (55%) and still down slightly from 2003-2004 (66% and 63%, respectively). The slight uptick in outsourcing appears to be driven by slightly more small firms outsourcing some aspects of relocation (38% vs. 30%), as slightly fewer mid-size and large firms indicated doing so in 2006 than in the previous year (67% vs. 74% and 81% vs. 88%).

  • Small firms indicate increases from 2005 in every outsourcing category except household goods carrier contracts.
  • Mid-size firms indicate increases in outsourcing from 2005 only for real estate services, claims submission assistance, expense tracking/reimbursement, audit/payment of invoices, and supplementary services; the remaining options for outsourced services decrease in 2006.
  • While slightly fewer large firms indicate outsourcing overall in 2006, those that do are outsourcing more (except for real estate services). Significantly more indicate outsourcing claims assistance, audit/payment of invoices, shipment monitoring, expense tracking/reimbursement and supplementary services. Slightly more are also outsourcing orientation tours, transportation/accommodation arrangements for families and relocation counseling. However, most remain at or slightly lower than reported in 2004.

However, even with the aforementioned trends:

  • As in previous years, real estate services continue to be the most popular items outsourced.
  • Mid-size and large companies continue to outsource a significantly greater variety of their relocation services than do small companies.
  • Small companies are still much less likely to outsource relocation services than mid-size and large firms.
  • Most relocation-related services continue to be outsourced by a fourth or more of large companies.

Additional Insights:

  • Internationally operating firms are much more likely than regional or national firms to outsource relocation services (74% vs. 37% and 48%).
  • Between regions of the U.S. overall outsourcing levels are similar. However, companies in the Northeast are more likely to outsource real estate sales/marketing and household goods carrier contracts than Midwestern and Central/West firms (58% vs. 39% and 38%; 45% vs. 28% and 15%).
  • The Southwest has the lowest percentage of firms indicating they outsource orientation tours (15%) versus close to a third of firms in every other U.S. region.
  • Manufacturing/processing firms are more likely to outsource than service firms (66% vs. 49%).
Questions 22: Outsourcing
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Relocation Service Selection -

Department(s) Responsibility Varies

For mid-size and small firms, the department most often involved in selecting a relocation service, HRO or brokerage firm is Human Resources (76% and 74%). Executive Management is more likely to be involved in selecting this business partner in small firms versus mid-size or large. Relocation and Human Resources at large firms have similar likelihoods of being part of this type of decision (56% and 49%), with Procurement involvement noted by about a third of these firms.

  • About half of mid-size and large firms indicate that two departments are involved in this type of business partner selection, while 64% of small firms indicate just one department handles this decision.
  • Large firms are much more likely than mid-size or small firms to have three or more departments involved (34% vs. 12% and 11%).

Additional Insights:

  • Firms in the Southwest have the highest percentage of Executive Management involvement in selecting a relocation service, HRO or brokerage firm (35%), as less than one-fifth of firms in the other regions indicate this area's involvement.
  • Northeastern firms have the highest level of involvement by Procurement (26%), while the Southwest has the lowest (4%).
  • Manufacturing/processing firms are more likely than service firms to have Human Resources select this service partner (75% vs. 54%) and have multiple departments involved in the decision (65% vs. 46%). Service firms are more likely to include Executive Management in the process (26% vs. 14%).
  • Firms operating internationally are also more likely than national and regional firms to have multiple departments involved in service partner selection (72% vs. 44% and 36%).

The majority of companies (74%) maintain active involvement in selecting the household goods carrier for an employee's relocation, whether as the sole selector or in conjunction with the employee.

  • Large firms remain more likely than small firms to delegate carrier selection to a relocation firm (26% vs. 9%).

Mid-size and small firms mostly utilize the Human Resources department for carrier selection (73% and 76%, similar to relocation service, HRO or brokerage selection), whereas large firms more often utilize the Relocation department for this decision (61% vs. 35%).

  • The majority of all size firms responding indicate two or more departments are involved in household goods carrier selection (74%, 76% and 71%, small, mid-size, & large respectively).
  • Procurement is more likely to be involved at large firms than at mid-size or small firms (23% vs. 9% and 7%), while Executive Management is more likely to be involved at small firms than at mid-size or large firms (25% vs. 10% and 3%), similar to relocation service, HRO or brokerage selection.

Service Still Key; Reputation & Price Nearly Equal in Weight for Selection

"Service" is still the most important attribute among corporate decision-makers when evaluating or selecting a carrier (more than 8 out of 10 rate this "critically important," or a "9" or "10" on a 10-point scale). This factor is the highest rated "critically important" factor, regardless of company size, for carrier selection. "Reputation" and "Price" are second and third overall and score similarly in importance for carrier selection across company size. "On-time delivery" continues to be the second-place key in carrier evaluation, close to "Service" overall (76% vs. 86%).

  • "Reputation" maintains the gain in importance from levels seen two years ago among large firms (58% vs. 46% rating it "critically important").
  • "Price" is similarly important to large companies as it is to small or mid-size firms, up 10% from last year and significantly higher than it was two years ago for selection (51% vs. 41% and 35%).
Question 22a and 17a: Carrier Selection
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Relocation Reimbursement/Payment -

Transferees and New Hires: Reimbursement Plan Changes in Previous Year Remain; Changes by Company Size

The percentages of firms offering full reimbursement of relocation expenses to transferees and new hires remain significantly lower than in 2003-2005, but similar to last year. Percentages of firms offering lump sum payments or partial reimbursement are similar to 2006 and 2003 and greater than 2004-2005. The majority of firms responding still offer full reimbursement of moving expenses as an option for transferees. However, remaining true to the policy shift reported in 2006, slightly more firms indicate they offer partial reimbursement to new hires than full reimbursement, and the percentage of firms indicating they offer full reimbursement to new hires is significantly lower than in 2003-2005.

  • Unlike previous years, all size firms now share a similar likelihood of offering full reimbursement to new hires (40-45%); for large firms, this is down significantly from levels seen in 2003-2006 (44% vs. 71%, 64%, 76% and 58%, respectively).
  • However, large firms are more likely than small firms to offer full reimbursement and/or lump sums to transferees.
  • For the first time since 2003, all size firms share a similar likelihood of offering partial reimbursement to transferees and new hires.
  • However, mid-size firms are more likely than small firms to offer lump sum payments to new hires.

Additional Insights:

  • Internationally and nationally operating firms are more likely than regional firms to offer full reimbursement for moving expenses to transferees (63% and 54% vs. 39%).
  • Manufacturing/processing firms are more likely than service firms to offer full reimbursement to transferees (62% vs. 48%), and service firms are more likely to offer partial reimbursement (38% vs. 23%).
  • Firms based in the Northeast have the highest percentage of any U.S. region to indicate offering lump sum payment to transferees (42%), a third or less of all other regions do so.
  • Central/West firms have the highest percentage of any U.S. region indicating they offer partial reimbursement to transferees (46%), while all other regions are under a third.
  • Over half of Midwestern firms (55%) indicate they offer full reimbursement to new hires, significantly above Northeast, South, and Central/West regions (35%, 38% and 37%, respectively).
  • About half or more of South and Central/West firms indicate they offer partial reimbursement to new hires (49% and 56%, respectively).

As in the past four years, the majority of firms report that carrier transportation expenses are "paid directly by the company" regardless of company size. However, small firms continue to be more likely than mid-size or large firms to have moving expenses paid by the employee and then reimbursed.

  • Manufacturing/processing firms are more likely to pay transportation expenses directly than service firms, although the majority of both indicate they follow this process for both transferees and new hires (85% vs. 75% and 81% vs. 69%, respectively).
  • Internationally operating firms are more likely than regional firms to pay transportation expenses directly for both transferees and new hires (87% vs. 60% and 81% vs. 59%, respectively).
Questions 26a and 27a: Transferee and New Hire Reinbursement
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Policy Tiers/Levels -

Majority of Firms Differentiate by Job Title or Grade Level

Most firms (76%) have different tiers (or levels) within their relocation policies. However, mid-size and large firms are more likely than small firms to have these in place. Overall, most tier-level policies are based on position/job title (61%) or job/grade level (i.e. staff, management, etc.) (52%), and most are based on more than one factor.

  • Mid-size and large firms are more likely than small firms to utilize an employee's status as either a new hire/current employee or homeowner/renter as a qualifier for relocation policy tiers.
  • Small firms are more likely than mid-size firms to base tier-level policies on just one factor.
  • Internationally and nationally operating firms are more likely than regional firms to have policy tiers/levels (79% and 80% vs. 66%).
  • Small firms are more likely than mid-size and large firms to use salary as a qualifier.
Question 19b: Relocation Policy Tiers/Levels
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Cost Coverage -

The majority (88%) of all companies indicate they reimburse or pay for some relocation costs for transferees or new hires (similar to the past two years, 87% and 89%). Overall, coverage of some core relocation expenses rebounded to levels seen in previous years. Significant increases occur overall in the percentages of responding companies who indicate they offer to reimburse/pay for these types of expenses (i.e. to pack all items, move unlimited weight, etc.). The exception is automobile relocation expenses, which held steady. The percentage of small firms offering to pay for the packing of all items increased significantly from last year (69% vs. 59%).

Over half of companies indicate they reimburse/pay:

  • To pack all items (80%, up from 71% last year, returning to 2003-2005 levels).
  • To move an automobile (68%, same as the last two years).
  • To move exercise equipment (54%, up from 49% and similar to the past four years).
  • To unpack all items (52%, first time measured).

The overall percentages of companies offering "non-core" relocation benefits (i.e., pick up belongings from a secondary residence, moving a boat or antiques/statuary, etc.) remain similar to last year. However, significantly fewer large firms indicate a willingness to pay for permanent/extended storage of some possessions (25% vs. 39%). Additionally, over the past five years the number of large firms willing to pay for moving statuary/paintings/antiques has progressively declined (34% vs. 43%, 52%, 49% and 61%).

Additional Insights:

  • Manufacturing/processing firms are more likely than service firms to offer:
    - To move an automobile (74% vs. 62%)
    - To move a second automobile (44% vs. 28%)
    - To pack all items (85% vs. 74%)
    - To unpack all items (57% vs. 44%)
    - To move exercise equipment (62% vs. 48%)
    - To move recreation/lawn equipment (45% vs. 34%)
  • Companies in the Northeast and Central/West are the most likely to reimburse/pay to move one automobile (81% and 77%) vs. about two-thirds or less of companies from other U.S. regions.
  • Midwest companies indicate they are the most likely to offer to move a boat (20%); companies from the South, Southwest and Northeast are least likely to do so (9%, 10% and 11%).
  • Only 38% of companies from the Central/West region of the U.S. indicate they pay for unpacking of all items, while 50% or more of firms from all other U.S. regions do so.
  • Northeast companies are more likely to pay for the relocation of pets (40%) than those in the Midwest, South, and Southwest (18%, 22%, and 20%).
Specialized Assistance for Homeowners/Renters -

The majority of firms offer specialized relocation assistance for employees who are either homeowners or renters (81% and 82%, respectively).

For homeowners, the majority offer:

  • Homefinding trips (66%)
  • To reimburse/pay for home sale costs (57%)
  • To move one or more automobiles (54%)
  • To reimburse/pay for home purchase costs (53%)
  • Storage (50%)

For renters, the majority offer:

  • To reimburse/pay for lease cancellation (59%)
  • Homefinding trips (59%)

Mid-size and large companies are more likely than small firms to offer specialized assistance to homeowners and renters (87% & 96% vs. 67% and 86% & 98% vs. 70%). Manufacturing/processing firms are also more likely than service firms to offer this assistance (91% vs. 73% and 91% vs. 76%, respectively). Regional firms are less likely than national and international firms to offer these benefits (57% vs. 83% and 90%; 61% vs. 82% and 92%, respectively).

International Relocation Volume -

Majority Expect Volumes/Assignment Durations to Remain Unchanged

Forty-two percent of responding companies transfer employees between countries. Close to a third of these firms indicate that the number of employees they relocated internationally increased in 2006 compared to the previous year. Almost two-thirds of small firms, however, indicate that international relocation volume stayed the same as 2005.

  • Twenty-nine percent of companies responding expect increases in international relocation volume in 2007.
  • Large firms are more likely than small firms to expect increases in international relocations in 2007.
  • Over half of companies, regardless of size, indicate they expect 2007 relocation volume to remain unchanged from 2006 levels.

Over half of responding firms indicate the duration of a typical international relocation assignment is greater than 12 months but less than three years, regardless of company size. Nearly a third indicate these assignments last three years or more. Only 12% of international assignments in 2006 were temporary (less than 12 months). Nearly two-thirds or more of all firms (regardless of size) expect temporary international assignment volumes to remain unchanged from 2006 levels.

Question 47b: International Relocation Volume
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International Outsourcing -

An Increasing Trend

In 2006, a similar percentage of firms overall indicate outsourcing international relocation services as in the past two years (66% vs. 62% and 58%), continuing to trend upward from 2004. However, while more small firms indicate outsourcing (similar to the overall trend), slightly fewer mid-size firms indicate outsourcing international services in 2006 than 2005 (64% vs. 75%). Similar to the past two years, 82% of large firms outsourced international relocation services; roughly half or more outsourced destination services/orientation tours and securing rental property.

  • Similar to overall results, small firms indicate increases in almost every international relocation outsourcing category (securing rental property, household goods carrier contracts, etc.).
  • In 2006, larger percentages of mid-size and large firms indicate they outsourced the contracting of household goods carriers for international transportation than in the previous year. Among all firms responding, this is reported at higher levels than in 2005, but still lower than in 2003 (36% vs. 23% and 48%).
  • Smaller percentages of large firms indicate they outsourced securing rental property in 2006 than 2005 (47% vs. 60%).
  • The percentages of firms that outsourced counseling about planning and details of international relocation and their company's international relocation policy remain significantly lower than in 2003, as in the past two years (23% vs. 36% and 17% vs. 28%).
  • The percentages of firms outsourcing international shipment monitoring and intercultural and language training are significantly higher than the previous year (27% vs. 14% and 30% vs. 18%).
  • Most international relocation-related services continue to be outsourced by a fifth or more of all companies who relocate employees internationally.

Among companies that outsourced relocation services domestically, the percentage that did so internationally remained similar to 2005 (80% vs. 79%), maintaining increases over 2004 (70%). Mid-size and large firms remain much more likely than small firms to outsource international relocation services.

Question 47e: International Outsourcing
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Question 47e: International Outsourcing
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International vs. Domestic Policy -

Majority of Firms Offer Additional Considerations; Employment Assistance for Spouse/Partners Internationally Increases

Most firms (85%) indicate there are differences between their domestic and international relocation policies. Half or more offer the following: additional tax considerations (69%), additional leave time with at least one visit back to the home country (58%), allowances for children to attend certain schools (56%), intercultural and language training (51%), and additional leave time (50%). However, progressively fewer companies indicate providing increased allowances for permanent storage, significantly lower than in 2003 and 2004 (37% vs. 49% and 56%).

  • Large firms remain more likely to offer additional considerations than small firms, and the percentages of these firms offering specific considerations remain similar to last year.
  • Slight decreases are observed among mid-size companies offering additional considerations from last year. Increases from 2006 appear only for higher rental housing allowances, higher relocation allowances, and more communications equipment.

Additional Insights:

  • Manufacturing/processing firms are more likely than service firms to offer additional tax considerations (78% vs. 62%) and intercultural and language training (60% vs. 40%).
  • Midwest firms have the highest percentages of those allowing additional leave time with at least one visit back to the home country (77%) and offering intercultural and language training (67%) in their international policy.

Forty-six percent of companies offer employment assistance to spouses or partners relocating internationally (significantly increasing from levels reported in the previous four years: 33%, 24%, 22% and 27%, respectively). This appears to be driven by substantial increases in small and mid-size firms indicating they offer such assistance over last year (42% vs. 25% and 46% vs. 29%). The most popular form of spousal/partner assistance for mid-size firms is paying for a work visa (20%), while most large firms either pay for a work visa or provide networking assistance (24% each). Networking assistance is the most popular among small firms (32%) with work visa payment a close second (26%).