Corporate professionals find themselves responsible for far more policy types than in the past. While the vast majority maintain formal policies for domestic (81%) and international relocations (83%), many also have policies covering short-term/temporary assignments (65%) and permanent international transfers (70%). Over half have extended business travel (52%) and international-localization (59%) policies as well, and 41% state a policy exists for long-distance commuter arrangements.
Increasingly, firms are vetting candidates to determine assistance for successful relocation. Over the past three years, around half of firms reported they perform assessments on candidates prior to relocation; this year, nearly three-fourths state this is policy. The most popular method is to conduct assessments for all relocations (48%), roughly double previous levels (21%, 2012-2014). But markedly more firms are using assessments domestically, internationally, by policy tier/reimbursement level, or for transferees as well. These trends hold across company size. The expanded use of this tool following the Great Recession likely helps relocation professionals stretch budgets to meet business objectives.
As relocation volumes increased last year amid pressures from many different sources, professionals drew on solutions created during the recession. One popular technique is to incorporate core/flex elements into policy. Over the past two years, nearly three-fourths of firms took this approach; in 2015 nearly 9 out of 10 (86%) did so. Favored by mid-size and large firms in the past, core/flex usage is now similar across company size. Coverage for core components continues to be the most popular aspect across company size (either across all employee levels/categories or depending on employee level/category). But the percentages of firms offering flexible use of the full relocation benefit or a portion of it have roughly doubled.
While use of incentives dropped in 2013, the vast majority of firms again used these last year. Since employee reluctance jumped substantially in 2014, a corresponding increase in incentives is not surprising. As housing/mortgage pressures lessened, far fewer firms offered extended, temporary housing benefits than did in 2013 (58% vs. 72%), although it remains one of the top three incentives offered. Relocation bonuses and cost-of-living adjustments (COLAs) in salary rounded out the top three across company size.
Incentives continue to be highly successful in convincing employees to relocate: nine out of ten firms say they worked almost always or frequently, similar to historical levels.
After an uptick in budget constraints last year as volumes leapt, it is not surprising that the percentage of firms using cost containment also jumped. Methods generated for survival during the recession are stretching resources as the demand for relocation faces budgets that have not kept pace with volumes over the past few years.
While the percentage of large firms using cost-containment methods is similar to percentages in recent years, markedly more small and mid-size firms used such tools last year than did previously. Overall, a greater variety of methods were used. While relocation required greater flexibility (i.e. core/flex, incentives), a variety of cost-containment methods also proved appropriate. Generally, capping relocation benefit amounts remained the most popular. At the same time, percentages reporting these methods roughly doubled: restructuring policy tiers/eligibility for benefits; offering pre-decision counseling; and utilizing short-term/extended business travel/commuter arrangements.
In addition to changing the allocation of budgets, the Great Recession seems to have made a lasting mark on how relocations are performed. Roughly two-thirds of firms now use alternative assignments of some type, far more than in the previous three years. While the percentage of large firms using such arrangements progressively increased over the past four years (73% vs. 60%, 62% and 66%), the percentages of mid-size and small firms using them has more than doubled compared to 2014 (75% vs. 37% and 48% vs. 19%, respectively). Additionally, while alternative arrangements were key to business strategy in prior years, they are now just as important as replacements for long-term assignments. However, there is no overarching method for their use inside mobility policy; nearly every potential use is indicated by roughly a third or more of firms, regardless of company size.
When determining whether to use an alternative assignment, the three “key factors” are job function, assignment purpose, and cost, similar to previous years. However, the percentages citing assignment purpose (53% vs. 66%+) and cost (51% vs. 64% in 2013) have fallen dramatically, while job function remains similar to historical levels. The percentage of firms using alternative assignments in response to employee requests jumped markedly from last year (43% vs. 31%).