FACTORS IMPACTING RELOCATION
COVID-19 Drove Change
The COVID-19 pandemic eclipsed all other factors impacting relocation last year. Roughly two out of three companies say this had the most significant impact in 2020. Second place goes to economic conditions, which increased to levels near prior recessions (37% vs. 44%+). However, COVID-19 saw impacts roughly twice that of economic conditions and far more than any other factor
From 2011-2019, the key external factor affecting relocation volumes was the lack of qualified local talent. Only one in four firms say the lack of available talent was a significant issue impacting relocation in 2020, roughly half that of the previous nine years, lower than the Great Recession (31%: 2009), and near levels not seen since the early to mid-1990s. This is a dramatic shift away from talent needs being a key driver of relocation.
- As a relocation driver, company growth falls below the recessionary levels of 2008-2009 (20% vs. 24%-33%). However, one out of three firms continue to report that volumes are affected by expansion (facility, new territories, or international), indicating efforts to expand the company footprint continue to be a larger driver than growth, similar to 2019 (32% vs. 39%).
- The impact of budget constraints on volumes remains elevated for a third straight year (20%: 2020 & 20%: 2019, 16%: 2018, vs. 13%) and equally weighted to company growth. While within historic ranges for recovery, its elevation over previous years is an indication of continued pressure to contain costs.
- More than one out of four companies indicate hiring/ employment issues (staff reductions/furloughs/layoffs or delayed onboarding/hiring) impacted relocation volumes in 2020.
- One out of five companies say the expansion of virtual/remote work played a role in the number of relocations performed last year.
Across company size, the COVID-19 pandemic is the factor with the greatest impact on relocation volumes in 2020. Midsize and large companies cite it more often than small firms, but more than half still say it was the main issue. Hiring/employment issues (staff reductions/furloughs/layoffs or delayed onboarding/hiring) also saw similar levels of impact across firms of all sizes.
- Large firms were most affected by COVID-19 (62%), with expansion efforts (35%), competition growth (34%), and hiring/employment issues (reductions/delayed hiring) (30%) nearly equal in weight after the pandemic.
- For midsize firms, the biggest impact on relocation resulted from COVID-19 (69%), followed by economic conditions (42%) and expansion efforts (36%).
- Small firms’ biggest issue was COVID-19 (53%), followed by economic conditions (41%) and hiring/employment issues (reductions/delayed hiring) (30%).
- Midsize and small firms are more likely to say economic conditions impacted relocation volumes last year than large firms (41%+ vs. 28%). Conversely, competition growth impacted large companies far more than smaller ones (34% vs. 21%). Both midsize and large firms were more impacted by expansion efforts than small firms (35%+ vs. 25%).
Political/regulatory environments (domestic or international) as a notable impact on relocation volumes continue to be elevated and trending higher than most prior years. The percentage of firms reporting political/regulatory issues as having a significant influence remains similar to the highest levels seen in 2018-2019. Political and regulatory issues, including visa/immigration restrictions, travel bans/closed borders, and others, continue to affect the number of relocations being performed by companies. More than one out of four large companies say this had a notable impact last year, and large companies were far more likely to be impacted than smaller firms.
- 29% say hiring/employment issues (staff reductions/delayed hiring) impacted relocation volumes
- 20% say expansion of virtual/remote work impacted relocation volumes
COVID-19'S IMPACT ON RELOCATION
The impacts of the COVID-19 pandemic were pervasive for people across the globe, with industries and life disrupted at levels not seen since World War II and the polio epidemic in the 1940s and '50s, respectively. Relocation/workforce mobility saw numerous changes as well.
In 2020, roughly one out of two companies say the COVID-19 pandemic:
- Increased the complexity of relocation administration
- Increased relocation costs
- Increased relocation policy changes
- Increased the difficulty of recruiting employees to relocate
Additionally, nearly 4 out of 10 say it reduced the number of relocations performed last year. Roughly two out of three midsize and large companies say COVID-19 increased complexity of relocation administration, far more often than small firms. Large firms are the most likely to say relocation policy changes increased in response to the pandemic. Small firms are the least likely to say there were increases in relocation. Across other factors, the impacts on firms were remarkably similar, regardless of company size.
In 2021, while more than a third of firms believe the impacts of the COVID-19 pandemic will remain the same as in 2020, more than 40% of firms believe the impact will result in:
- Increased relocations
- Increased complexity of relocation administration
- Increased relocation costs
- Increased relocation policy changes
- Increased difficulty of recruiting employees to relocate
Large firms are the most likely to expect increases in the complexity of relocation administration. recruiting difficulty and relocation costs in 2021 compared to smaller firms. One out of four small firms expect relocation volumes to decline in response to the pandemic this year, more so than larger firms. Across other factors, projected impacts are similar across firm size next year.
COVID-19'S WORKFORCE PLANNING IMPACT
8 out of 10 firms say they made changes to their internships due to the COVID-19 pandemic in 2020. 41% reduced their internship program, one out of three offered a hybrid (on-site/remote) internship program, and one out of four offered virtual-only internships. One out of four canceled their internship program last year.
- Around half of midsize and large firms reduced their internship programs; only one out of three small firms did so.
- Large firms were the most likely to go hybrid with their internships (40%), compared to around one out of four smaller firms.
- A fifth or more of firms across size canceled their internship program in 2020.
Three out of four firms say they anticipate changes to their internships due to the COVID-19 pandemic in 2021. 4 out of 10 are planning for hybrid internship programs, one out of three for internship reductions, and one out of four virtual-only internships. Only 1 out of 10 plan to cancel their internship program this year.
- Almost half (44%) of large companies plan to go hybrid with their internships, compared to just over a third of smaller firms.
- Large companies are the most likely to anticipate reducing internship programs (43%) compared to 33% of midsize and 29% of small firms.
- More than one out of four midsize and large firms are planning virtual-only options; only one out of six small firms are doing so.
As companies navigate COVID-19 and prepare for what work looks like in the future, there is a lot of uncertainty. When asked about return-to-work plans, nearly half (42%) plan to require COVID-19 vaccination prior to employees returning to office/location-based work. This is most popular among small and midsize firms (44% & 47%), compared to large firms (35%).
The most popular return-to-work plans for workforce management in 2021 and beyond are:
- Phased-in/staggered return to work (office/location-based) (37%)
- Hybrid (in office/remote) arrangements for employees (32%)
More than one out of four companies say they have a full return-to-work plan; however, one out of four either say they are providing allowances for certain areas of the company to remain remote or allowing employees to choose whether to remain remote or return to the office.
Overall, going forward companies predict that around a third of their workforce will be fully remote. Small firms predict that almost half (44%) of their workforce will return fully to office/on-site location work; larger firms only expect around one out of three employees to fully return. Companies predict that more than a fourth of their employees will be hybrid workers, regardless of company size.
95% of companies participating in the survey believe at least some portion of their workforce will be remote, either full time or partially. The vast majority of companies hold this view across size (89% of small, 97% of midsize and 99% of large). As companies shift to remote work environments, nine out of ten (across size) have constraints in place for employees working from home. The most popular stipulations are working during certain hours/time zone availability (40%), and office setup rules (36%).
- Half (48%) of midsize firms stipulate work hour availability, compared to around one out of three small or large firms.
- More than one out of four companies are looking at salary adjustments/reductions if employees are living in areas with lower costs of living.
- One out of three large companies are requiring employees to live in a specific geographic area, compared to one out of four smaller firms.