The industry is still healing from the housing crash and Great Recession. Answering new economic challenges has yielded tools in policy and practice that allow greater flexibility to adapt. As pressures ease, firms are still using these new tools—but are less dependent on them.
While most firms still offer incentives to relocate, use in 2013 has dropped significantly from 2011 to 2012, especially among large firms. Perhaps the reduction in housing/mortgage concerns is offsetting the need. However, a variety of economic and social factors still constrict employee willingness. The most popular incentive is extended temporary housing benefits, offered by two-thirds or more of companies.
Relocation bonuses (54%), cost-of-living adjustments (COLAs) (45%), extended duplicate housing benefits (31%), and loss-on-sale protection (29%) round out the top five incentives. Around half or more of firms across size offered relocation bonuses or COLAs. Large firms were more likely than mid-size and small firms to offer loss-on-sale protection (50% vs. 31% and 13%) or extended duplicate housing benefits (47% vs. 25% and 26%).
The majority of firms employed cost-containment measures last year, but overall use trends lower compared to its recessionary peak. Markedly fewer small and large firms are taking such measures. Yet mid-size and large firms continue to be the heaviest users of a variety of methods. More than a fourth of firms, regardless of size, capped relocation benefit amounts; this was the most frequently used method for small and mid-size firms. Large firms relied most on reviewing/renegotiating supplier contracts.
Nearly three-fourths of firms incorporate core/flex elements in their policies, similar to last year's findings. These are most popular with mid-size companies (83%), followed by large (77%) and small firms (60%). The most popular aspect is coverage for core components, either across all employee levels/categories or depending on employee level/category. This is true regardless of company size.
Firms continue to use the flexibility of alternative assignments, with 37% of firms indicating so overall. This includes roughly two-thirds of large firms, 37% of mid-size firms, and 19% of small firms. Similar to the last two years, the reason for their use cited most often is to meet strategic business goals. About two-fifths of firms also use alternative assignments to develop internal talent, to accommodate employee needs, to maximize budgets/corporate resources, or along with long-term assignments. Less than a fourth typically use them as replacements for long-term or traditional short-term assignments. Regardless of company size, the top three "key factors" in the decision to use an alternative assignment are assignment purpose, cost, and job function.