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Outsourcing

More than two-thirds of companies outsourced relocation services last year, shifting slightly lower than the historical highs of 2014-2016 (70% vs. 73%-77%) but remaining similar to the past three years and the peak in 2011 (72%). Outsourcing continues by the overwhelming majority of large firms (upper mid-range historically) and in the higher range for mid-size firms. After running much higher for small firms over the last three years, including historical highs in 2015-2016 (63%-65%), it decreases to roughly half (49%). However, this is far above the average over the previous 12 years of roughly one third. Large firms continue outsourcing to a greater extent and with more services than do mid-size or small firms.

Outsourcing for most service categories in 2017 remained at levels similar to 2015-2016 with slight decreases compared to 2016. However, some categories saw significant drops compared to 2016: real estate purchase (25% vs. 36%), real estate sales/marketing (30% vs. 39%), counseling about relocation planning & details (25% vs. 34%), audit/payment of invoice (13% vs. 19%), and compensation services (10% vs. 18%). These returned to near 2015 levels (22%, 28%, 26%, 14% & 14%), after increasing in 2016 over lower levels seen in 2014-2015. However, even with these shifts, outsourcing of most service categories fell between historical lows and mid-ranges, down from historical highs. As companies continue to balance which aspects of relocation provide the best cost/benefit outsourced vs. serviced by in-house staff (or have administration simply handed off via lump-sum programs), certain services may simply be less necessary at the corporate level, while others are simply more likely to be handled in-house.

  • Outsourcing at large firms in 2017 decreased notably from 2016 for a few categories: real estate sales/marketing (48% vs. 62%), real estate purchase (42% vs. 53%), orientation tours at new location (32% vs. 47%), and tax gross-up assistance (30% vs. 41%). However, even with these marked declines, each of these categories maintained an increase over 2015’s historical lows (40%, 33%, 28%, & 23%). The trend across all other items was for slight decreases from 2016 levels, remaining similar to or above 2015 levels, with percentages falling near historical lows or within lower mid-ranges.
  • At mid-size firms, outsourcing stayed about the same or decreased slightly from 2016 across nearly all categories. The exceptions were real estate purchase (22% vs. 32%), relocation planning & details counseling (21% vs. 34%), and compensation services (8% vs. 18%) which saw marked decreases to historic lows. Outsourcing runs near or at the lowest levels historically across most categories again, indicating continued selectivity among mid-size firms.
  • After outsourcing across nearly all categories rose to or near historical highs in 2016, a pullback occurred in 2017. The most dramatic decreases were: real estate sales/marketing (15% vs. 26%), real estate purchase (11% vs. 26%), relocation planning & details counseling (15% vs. 24%), household goods carrier contract (14% vs. 23%), and property management (8% vs. 18%). The retreat essentially dipped to 2015 levels (15%, 11%, 16%, & 10%). Across all other items the trend was for slight decreases from 2016, but remained similar to 2015 levels with percentages falling in historical low to mid-ranges.
 
Question 43-1
Possible outsourced relocation services in 2017
Chart Q43
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Question 43-2
Services outsourced to a relocation service, HRO or brokerage firm in 2017
Chart Q43-2
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International

Similar to the previous four years, far more firms outsourced internationally in 2017 than did overall (80% vs. 70%). International outsourcing overall remains at historic highs, although across individual outsourcing categories there is great variation. It is used heavily across firms of all sizes, although large firms outsource a greater variety of services than mid-size and small firms do.

  • After seeing increases in 2016, international outsourcing across individual categories saw marked decreases last year across most service categories, with levels falling in the mid to lower ranges historically. Five areas saw the greatest decreases: contract of household goods carrier (30% vs. 44%), relocation planning & details counseling (29% vs. 44%), destination services/orientation tours (30% vs. 43%), arrangement of family’s temporary accommodations (29% vs. 42%), and coordination and monitoring of international shipment (29% vs. 41%).
  • Similar to domestic trends, outsourcing across categories for small and large firms decreased from 2016. The pullbacks were often more dramatic internationally than overall, especially among small firms. Mid-size firms saw either declines or stability across categories, but were far less likely to have reduced outsourcing across most categories compared to either small or large firms last year.

Among companies that outsourced relocation services domestically, the percentage that also outsourced internationally in 2017 matches the historical high (98%) in 2014 and trends above 2016 (95%). For the fourth straight year, firms that outsource domestic services and relocate internationally almost universally outsource services abroad. Large firms continue to be the most active for outsourcing internationally: around a third or more did so across almost all survey categories.

 
Question 46j-1
List of possible outsourced international relocation services in 2017.
Chart Q46j
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Question 46j-2
International services outsourced to a relocation service, HRO or brokerage firm in 2017
Chart Q46j-2
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