2011 Corporate Relocation Survey

 
Results 44: Corporate Relocation Survey - Year 2011 Results 44: Corporate Relocation Survey - Year 2011

 

Who Responded?

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.

  • Most respondents (86%) work in human resources/personnel or relocation services departments for firms in:
    • service (39%)
    • manufacturing/processing (33%)
    • wholesale/retail (10%)
    • financial (9%)
    • government/military (4%)
    • other industries (5%)
  • For analysis, responding firms are categorized by size:
    • 37% have less than 500 salaried employees (small)
    • 37% have 500-4,999 salaried employees (mid-size)
    • 27% have 5,000+ salaried employees (large)
  • Over half (55%) of the companies surveyed this year are international firms.


Results Highlights

Relocation Volumes and Budgets

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.

  • The median number of relocations by mid-size firms increased in 2010, returning to the average range (20-49) reported in 2002-2007 after falling to "10-19" in 2008-2009. However, the median range for large firms remains "100-199" for the third year in a row, down from "200-399" reported in 2002-2007.
  • About a third of manufacturing/processing and for-profit service firms reported increased relocation volumes in 2010, and over a fourth saw budget increases. Their expectations for 2011 are similar: roughly a third expect increases in volumes and budgets, and over half expect stability.
  • Over a third of international and regional firms reported relocation volumes increased in 2010, compared to only about one-fourth of national firms. International firms are most likely to have reported budget increases: one-third compared to under one-fourth of regional and national firms. International firms are also most optimistic; about one-third expect further increases to volumes and budgets this year, compared to roughly one-fourth or less of regional and national firms.

 

International Relocation Volume

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%).

  • For-profit service firms are more likely to expect international relocation volumes to increase in 2011 (38% vs. 21%); manufacturing/processing firms are more apt to expect declines (21% vs. 10%).
Question 6: Overall Relocation Volume
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Question 46b: International Relocation Volume
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Economic Outlook

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.

  • Roughly two-thirds or more of all-size firms saw their financial performances improve in 2010 and expect further improvement in 2011.
  • International firms are most optimistic: over three-fourths expect improved financial performances this year compared to roughly two-thirds or less of national or regional firms.
  • Expectations for an improved U.S. economy in 2011 are shared by roughly half or more firms across company size, business reach, U.S. regions, manufacturing/processing, and for-profit service industries. The most optimistic: large firms (64%), international operators (59%), and those in the Midwest (61%).
  • For-profit service firms are more likely than manufacturing/processing firms to predict improvement in the U.S. real estate market this year (40% vs. 26%). However, expectations for a stable or improving real estate market are the overwhelming consensus for both segments (88%+).

 

Market Impact on Relocations

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.

  • In 2010, the percentages of international firms that reduced relocations due to economic/market pressures for entry level/new hires and middle management positions fell significantly, from roughly half to about a third. However, far more international firms decreased entry level/new hire relocations than did regional or national firms (36% vs. 15% and 23%).
  • Manufacturing/processing firms are more likely than for-profit service firms to have increased senior manager/executive relocations due to economic/market pressures (25% vs. 16%).

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%).

  • Internationally operating firms are more likely than regional or national firms (43%+ vs. 21% or less) to feel the impact of economic/market pressures on assignment durations. The number of long-term assignments were more likely to have decreased than increased (29% vs. 15%), and the number of short-term assignments were more likely to have increased than decreased (27% vs. 17%).
Question 8: Market Pressures Impact on Relocation Volumes
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Employees Declining Relocation

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).

  • International and national firms continue to be more likely than regional firms to experience declined relocations (68% and 58% vs. 41%).
  • More manufacturing/processing firms than for-profit service firms (65% vs. 53%) report declined relocations.

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%).

  • For large firms, housing/mortgage concerns are by far the biggest factor; 85% say employees declined relocation for this reason.
  • While housing/mortgage concerns are the biggest issue for mid-size firms (67%), a similar percentage (59%) cite family issues/ties. For small firms, family issues/ties surpasses housing/mortgage concerns by a small amount (53% vs. 49%).
  • Housing/mortgage concerns are the biggest issue for regional, national and international firms, cited by more than six out of ten. However, family issues/ties are weighted almost as heavily among regional firms (57% vs. 61%). International firms are far more likely than regional firms to cite spouse/partner employment (46% vs. 29%) or cost of living in the new location (36% vs. 18%).
Question 12a: Select Reasons Relocations Declined: 2002-2010
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Incentives & Cost Containment

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.

  • Since 2008, progressively more large firms have offered relocation incentives (63%, 2008; 73%, 2009; 80%, 2010), while percentages of small and mid-size firms offering incentives have remained fairly static.
  • International firms were more likely to have offered loss-on-sale protection and COLAs than were national or regional firms (53% vs. 40% and 29%, 51% vs. 28% and 24%, respectively).
  • Manufacturing/processing firms were more likely to have offered loss-on-sale protection than were for-profit service firms (54% vs. 38%). However, service firms were more likely to have offered mortgage payoffs (21% vs. 10%).

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%).

  • For-profit service firms were more likely than manufacturing/processing firms to have restructured policy tiers/eligibility for certain benefits (22% vs. 14%).
  • International firms were more likely than regional or national firms to have reviewed/renegotiated supplier contracts (29% vs. 11% and 14%), offered short-term/extended travel/commuter arrangements (21% vs. 7% and 10%), and tightened real estate assistance requirements (17% vs. 9%).

 

External Factors

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:

  • For large firms, the percentage citing economic conditions (55%) is similar to 2008-2009 (55%+) but falls significantly below 2003 (70%), the peak of the previous recession. The percentage of large firms citing real estate also remains similar to 2008-2009 (54% vs. 52%+), significantly above 2007 (37%). While the percentage citing a lack of qualified local talent increases significantly in 2010 (29% vs. 18%), this is far below 2004-2006 levels (44%+).
  • The largest reported decrease in the impact of economic conditions comes from mid-size firms, cited by about one-third (32%) compared to over half (57%) in 2009. This approximates 2004-2005 post-recessionary levels (33%+), yet is above 2006-2007 (18%+). Nearly half (47%) cited a lack of qualified local talent in 2010, similar to levels for most of the past eight years (36%+), but significantly below 2005 and 2007 (59%+).
  • For small firms, lack of qualified local talent reclaimed the top spot among external factors by a small margin over 2009 (41% vs. 34%), still lower than in 2002-2008 when nearly half or more cited it as the top issue. Falling from first place, economic conditions are a close second (37%), similar to 2002-2004, 2008-2009 (32%+) and significantly above 2005-2007 (19%+). The impact of the real estate market remains elevated compared to 2007 (27% vs. 17%).
  • For international and national firms, the top three external factors (economic conditions, the real estate market, and a lack of qualified local talent) weighed nearly equally last year (42%, 41%, and 39%; 42% and 37%, respectively). Regional firms, however, cited the lack of qualified local talent as their top issue (46%), followed by economic conditions and the real estate market (31% and 30%).
  • Manufacturing/processing firms cited economic conditions and the real estate market much more frequently than for-profit service firms (46% vs. 31%, 44% vs. 27%, respectively). However, both types of firms weighed the lack of qualified people similarly (41% vs. 36%).
Question 14: Select External Factors Impacting Relocation: 1988-2010
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Internal Factors

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:

  • While more than a third of firms, regardless of size, cite company growth as a main internal factor impacting relocation volumes last year, large firms were more likely than mid-size or small to also cite:
    – Budget constraints (32% vs. 14% and 19%)
    – Expansion into new territories (27% vs. 17% and 14%)
    – Use of short-term assignments (19% vs. 9% and 5%)
    – Closing of facility (18% vs. 9% and 5%)
  • Nearly identical percentages of international firms cite company growth and knowledge/skills transfers as their top internal factors (38% and 37%). National firms cite company growth (39%) followed closely by promotions/resignations (36%); regional firms cite these two factors equally (31%).
  • Manufacturing/processing firms cite four internal factors nearly equally: corporate reorganization (33%), company growth (30%), knowledge/skills transfers (30%), and promotions/resignations (29%). The clear top factor at for-profit service firms was company growth (45%).
Question 15: Select Internal Factors Impacting Relocation: 1988-2010
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Outsourcing

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 increases across every service category from 2009; most increases are significant and the largest occur in transportation/shipment-related items. Individual category levels essentially meet or exceed nine-year highs with one exception, supplementary services.
  • The most dramatic shift occurs in outsourcing household goods carrier contracts. Almost half (45%) outsourced this function, the highest in nine years and up significantly from an eight-year low (23%) in 2009.
  • Significantly more companies outsourced the arrangement of family transportation and accommodations than in 2009 (34% vs. 19%), just under the nine-year high (36%) in 2003.
  • After dropping considerably in 2009, the percentage of firms outsourcing household goods shipment monitoring increased significantly (36% vs. 23%) to the highest level in nine years.

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:

  • International firms are more likely than national or regional firms to have outsourced relocation services (76% vs. 62% and 39%). However, international and national firms share a similar likelihood of having outsourced household goods carrier contracts (52% vs. 47%).
  • Manufacturing/processing firms are more likely to have outsourced each type of relocation service than for-profit service firms, with three exceptions: orientation tours (37% vs. 31%), tax gross-up assistance (33% vs. 26%), and supplementary services (19% vs. 14%).
Question 40: Outsourcing
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Relocation Reimbursement/Payment

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%).

  • In 2011, the percentages of firms offering full reimbursement to transferees or new hires remain below the 2008-2009 levels that approached 2003-2005 highs. The use of lump sum and partial reimbursement methods for both transferees and new hires has generally increased since 2003, and are now at the highest levels in nine years.
  • The percentages of small and mid-size firms offering full reimbursement to transferees or new hires approach the lowest levels in nine years, while percentages offering partial reimbursement or lump sums approach or exceed nine-year highs. Large firms trend similarly, except for full reimbursement among new hires, which is up 10% from 2010 (47%), similar to 2004 and 2006-2009; however, it remains far below 2003 and 2005 highs (71%+).

Additional Insights:

  • Most manufacturing/processing firms (61%) offer full reimbursement to transferees, while less than half offer lump sum payments (48%) and partial reimbursement (41%). Half or more of for-profit service firms offer each form of payment (52%, 50%, and 54%, respectively).
  • Similar percentages of manufacturing/processing and for-profit service firms offer lump sum payments to new hires (55% and 53%), and less than half offer full reimbursement (45% and 41%). However, service firms are more likely to offer partial reimbursement (56% vs. 45%).
  • While roughly half or more of regional, national and international firms indicate offering these reimbursement methods (full, partial, lump sum) to new hires, international firms are more likely than regional firms to offer full reimbursement (61% vs. 42%) or partial reimbursement (51% vs. 34%) to transferees.

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:

  • Regional firms use lump-sum payments for household goods shipping/storage costs and rental assistance/transactions far more often than national or international firms (46% vs. 27% and 23%, 28% vs. 12% and 16%). These firms also report lump sums are typically offered to executives more often as well (62% vs. 36% and 41%).
  • Nationally and internationally operating firms use lump sums for miscellaneous allowances far more often than regional firms (59% vs. 36%), and both offer lump sums to entry-level employees and renters more often than regional firms (49% and 60% vs. 31%, 44% and 48% vs. 23%).
  • Manufacturing/processing firms are more likely than for-profit service firms to offer lump sums to homeowners (40% vs. 22%) and renters (52% vs. 35%).

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.

Question 32: Relocation Reimbursement Methods
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Cost Coverage

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:

  • Pack all items (80%).
  • Move an automobile (76%).
  • Move exercise equipment (51%).
  • Unpack all items (50%).

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:

  • Temporary housing allowance (71%).
  • Home-finding trips (67%).
  • Reimburse/pay for home sale costs (58%).
  • Storage (53%).
  • Reimburse/pay for home purchase costs (51%).

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:

  • Temporary housing allowance (65%).
  • Home-finding trips (60%).
  • Reimburse/pay for lease cancellation (58%).

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%).

 

Question 28: Transferee Reimbursement 2003-2011
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Question 28: Transferee Reimbursement 2003-2011
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Question 28: New Hire Reimbursement 2003-2011
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Trailing Spouse/Partner Assistance

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.

  • Most small firms that offer employment assistance provide networking assistance (68%), much more regularly than mid-size or large firms (44% and 51%). Mid-size and large firms are more likely than small firms to offer outplacement/career services from an outside firm (56% and 52% vs. 22%) and interviewing skills training (22% and 28% vs. 10%).
  • Manufacturing/processing firms are more likely than for-profit service firms to offer employment assistance overall (57% vs. 33%). However, service firms are more willing to find employment within the company for an employee's spouse/partner than manufacturing/processing firms (22% vs. 10%).

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%).

  • Manufacturing/processing firms are more likely than for-profit service firms to indicate the employment status of a spouse or partner impacts relocations (57% vs. 38%).

 

International Relocation Durations

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.

  • For-profit service firms are more likely than manufacturing/processing firms to indicate that the typical length of an international assignment is less than a year (21% vs. 6%). However, about a fourth of both firm types expect short-term international relocations to increase in 2011.

 

International Outsourcing

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.

  • Outsourcing at small firms across most international service categories remains nearly the same or slightly higher than 2009, similar to most of the past seven years. There are two notable exceptions. In 2010, slightly fewer firms outsourced visa/immigration services (19% vs. 21%), far below the 2008 high (38%). Additionally, despite an uptick, the outsourcing of international real estate services remains far lower than historic highs (4% vs. 13% and 15%).
  • Outsourcing of international relocation services by mid-size firms increases across most categories, while the rest are nearly identical to 2009; most are significantly above seven-year lows and similar to most prior years overall. The exception is international real estate, which remains significantly below 2004-2005 and 2008 (17% vs. 29%+).
  • Overall, outsourcing of international relocation services across categories at large firms increases or remains nearly the same as 2009. Historically, outsourcing levels for most categories nearly meet or exceed the highest levels in eight years. The most significant 2010 outsourcing increases appear in transportation arrangements for families (42% vs. 17%), international real estate (26% vs. 9%), and securing rental property (57% vs. 41%).

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.

 

International vs. Domestic Policy

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%+).

  • For large firms, policy considerations are generally similar to 2010 and most previous years, but fall in the mid-range or approach nine year lows on average. There are two exceptions that increase notably over 2010 and approach or meet nine year highs: allowances for children to attend certain schools (67% vs. 53%, 70%: 2007) and higher rental allowances (58% vs. 48%, 58%: 2008). Intercultural and language training also increases slightly (68% vs. 62%) and approaches the highest level of offering in eight years (70%: 2004), while increased permanent storage allowances increases (61% vs. 47%) but remains in the mid-range historically.
  • Policy considerations from mid-size firms trend the same or higher across most categories compared to last year, and they remain similar overall to 2010, continuing to fall short of nine year highs. Only two considerations decrease compared to 2010: fewer firms offer intercultural/language training (45% vs. 59%) and allowances for children to attend certain schools (43% vs. 48%); but these levels remain in mid-ranges historically.
  • Policy considerations remain similar to last year for small firms but are evenly split between slight increases or decreases across categories. Overall, policy considerations are similar to the lowest levels over the past eight years, with many significantly below previous category highs. Additionally, the percentages of firms offering additional tax considerations (38%), intercultural and language training (19%), and extended per diem charges (10%) in 2011 are the lowest levels recorded in nine years.

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.

Question 46e:  International Short-Term Relocation Expectations
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