Relocation Policy
Innovations
Cathy Bauman
Runzheimer International
June 9, 2011
Runzheimer International
Mobile Workforce
Business Travel
Business Vehicles/Fleet
Relocation
Virtual Office
International Assignments
Route Planning & Logistics
●
Mobile – 45%
●
Concern:
Employee
Productivity
●
Benefit:
Employee
Satisfaction &
Competitive
Advantage
Benchmark Key Findings
• Mobility cost per employee—$7,350
• Business Travel—32% expect spending
to increase
• Business Vehicles—67% concerned with 24/7
liability with company-provided vehicles
• Virtual/Home Office – need to develop policy
• Corporate Aircraft—executive use dropped;
use by ‘managers of multiple sites’ increased
• Relocation—43% expect increase in volume
DOMESTIC MOBILITY
• What Changes Have You Made to Your
Relocation Policy in the Past Year?
- 40% None
- Remainder Various
-- Increased Loss on Sale
-- Offered Pre-Decision Counseling
-- Reduced Mandatory Marketing Time
and Increased Temp Living Assistance
RELOCATION POLICY UPDATES
Policy Updates
15%
15%
5 Years
2 Years
1 Year
24%
6 Months
39%
POLICY TIERS/ADDITIONS
• Number of Policies
- 3 Policy Tiers – Average
• Various Changes:
- Increase Loss on Sale
- Incentive to Rent
- Extending Marketing Time
- Extending Temp Living Benefit
HOME SALE PROGRAMS
Home Sale Programs
 54% Guaranteed Buyout
 23% BVO
 2% BVO & GBO
Loss-On-Sale Program
 84% Provide
 Caps
- 15% - $50K
- 11% - $10K & $30K
- 5% - $100K
EQUITY ASSISTANCE
Negative Equity Assistance
12%
No
Yes
88%
COST OF LIVING ALLOWANCES (COLAs)
• Do You Provide a COLA?
- Yes – 73%; No – 27%
• Do You Provide a COLA for High Cost
Locations Only?
- Yes – 76%; No – 24%
• Do You Provide a COLA for All Transferees?
- Yes – 28%; No – 72%
• Do You Provide a COLA to Homeowners and
Renters?
- Homeowners – 92%; Renters – 92%
EMPLOYEE LEVEL FOR COLA
• What Level of Employee Receives COLA
- Transferee – 79%
- Executive – 42%
- Experienced New Hire – 38%
- New Hire – 38%
- Other – 25%
COLA THRESHOLDS, CAPS & SUBSIDIES
• COLA Thresholds
- 48% No Threshold
- 24% - Threshold = 5%
- 12% - Threshold = 10%
• COLA Caps
- 96% No
• Mortgage Subsidy
- Yes = 52%; No = 48%
- 23% Subsidy Based on COLA
LUMP SUM POLICIES
• Do You Have a Formalized Lump Sum
Policy?
- Yes = 82%; No = 18%
• Number of Policies
- 30% More than 5 Policies
- 21% = 2 Policies
- 18% = 4, 5 Policies
• Temp Living Days – Homeowner
- 37% = 30; 28% = 60; 8% = 45
• Temp Living Days – Renter
- 51% = 30; 8% = 60
NEW POLICIES/PROGRAMS DEVELOPED
•
•
•
•
Temporary Living or Renter – 53%
Other – 53%
Talent Management – 12%
Virtual or Home Office Program – 12%
GLOBAL/INTERNATIONAL
MOBILITY
Survey targeted strategic objectives and policy
offerings that companies have adopted or are
considering adopting in response to today’s
mobility environment
Two Major Findings:
• Companies once again expanding expatriate
population
• Companies adopting increasing number of
mobility policies and compensation
approaches, with a continuing trend toward
multiple policy types and adoption of lower
cost alternative solutions
Source: AIRINC
EXPATRIATE POPULATIONS
INCREASING
• 42% of Companies Report Increase in
Expatriate Population in 2010 Compared to
26% in 2009
• US and Asia Pacific Companies More Likely
to Increase Expatriate Population Numbers
at 53% and 50% respectively
• Only 38% of European Companies Expect
to Increase Their Expatriate Populations in
2011 although 52% report populations to
remain stable
EXPATRIATE POPULATIONS
INCREASING
• Expatriate Population Growth Strongest in
High Tech, Financial & Professional
Services, Manufacturing and
Transportation Industries
• Companies Report on Average 3-4 Formal
Assignment Policies
- Most Common:
-- Balance Sheet 83%
-- Short Term – 73%
-- Localization – 45%
-- Host Plus 21%
-- Commuter 21%
GLOBAL/INTERNATIONAL POLICIES
• Half of companies are looking to adopt new
policies in 2011.
-- Most common policy type under
consideration is Localization Plus – 28%
-- Localization – 26%
-- Reduced Balance Sheet – 21%
-- Host Plus – 21%
-- Commuter – 21%
ALTERNATIVE PACKAGES
• Decision-Makers Continue to Explore and
Implement Los Cost Alternative Packages
• 2010 – 15% of Companies Implemented
One or More Low Cost Alternative Package
• 30% More Considering
• 44% Respondents Package in Active Use
BALANCE SHEET
• Balance Sheet is Still Most Popular Expat
Compensation Scheme
- 83% Respondents use Balance Sheet
- 74% Companies use Balance Sheet
Exclusively for Long Term Assignments
- 60% Use Balance Sheet as Only Approach
to Long Term Assignments
- 14% Use Mix of Full and Reduced Balance
Sheets.
HOST PLUS
• Host Plus Used Most by Financial Firms and
Companies Headquartered in Asia-Pacific
and European Regions
• 43% Asia-Pacific
• 35% European
• 14% U.S. Companies use Host Plus
• 45% of Financial Firms Regardless of HQ
use Host Plus
SENDING & RECEIVING LOCATIONS
•
Top Sending Countries
- U.S. – 80%
- U.K. – 71%
- Australia – 31%
- Canada – 26%
- Singapore – 21%
•
Top Receiving Countries
- U.S. – 65%
- U.K. – 50%
- China – 41%
- Singapore – 29%
- Hong Kong – 22%
TAXES AND IMMIGRATION
• Tax and Immigration Top Challenges for
Mobility Practitioners
• Other Challenges
- Designing globally consistent policies
- Aligning mobility with talent management
THANK YOU
QUESTIONS AND ANSWERS
Cathy Bauman
Runzheimer International
ceb@runzheimer.com
262-971-2356