Articles & Whitepapers

Car Rental Costs Impacting Relocation Budgets

‍Current car rental costs remain far above pre-pandemic prices with no relief in sight for the foreseeable future due to consumer demand and vehicle availability. This is directly impacting relocation services and global mobility travel budgets.

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Stubbornly High Costs

Airfare and lodging prices are still near all-time highs with flights five percent more expensive than in May 2019. Hotels are up 15 percent over the same period, according to a May 2023 report from the Bureau of Labor Statistics (BLS). Yet, when estimating talent mobility travel budgets for home finding and temporary living benefits, renting car costs may be the most surprisingly high factor.

The typical cost of renting a car in the U.S. increased 48 percent since May 2019, according to data from the BLS, so a rental that was $100 per day four years ago would now cost almost $150 per day.

It’s been two years since the initial price rise in the spring of 2021 and what some have called “the rental car apocalypse”, so why does this situation persist today?  

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Supply, Demand and Profits

Some say the reason prices have soared is simple:

• Supply
• Demand
• Record profits

Higher car prices severely impacted supply:  rental car companies couldn't stock their fleets as fast as in the past due to supply chain issues and microchip shortages. Though fleet inventories finally grew again in 2022, they still have a long recovery to fulfill pent-up demand after companies sold off massive portions of their vehicle inventories to offset bleak demand during the pandemic. Consider that the Avis Budget Group alone sold 250,000 vehicles in 2021.

After the pandemic, demand skyrocketed as more people travelled in general, tourism activity and in-person business trips have approached pre-pandemic.

Finally, there was the issue of profits: some rental car companies had their best profit and revenue years and seek to make up for the lost years of the pandemic. Consumers continue to show a willingness to pay more to get around, so they are not inclined to reduce costs soon with continued high consumer demand.  

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Relocation Impact and Options

While the auto rental market may seem a small piece of a complex permanent move or international assignment, consider the times relocating employees / families may need to rent a car:

• For orientation /home finding trips to the destination to explore the new community
• When vehicles are needed at the departure location while relocating families’ cars are also being shipped to the destination
• When individuals inbound from another country may not be able to purchase an auto upon arrival in the destination

To contain costs, NEI Global Relocation Account Executives proactively guide relocating families in coordinating all schedules to minimize additional costs associated with such waiting periods.

Further, to make the best of the personal or professional travel situation, one might consider the following suggestions by NerdWallet to find available vehicles at the lowest prices:

Consider ways to avoid driving altogether. Public transportation, especially in large cities, can significantly reduce the cost of a trip.

• Check out alternatives to traditional rental car companies. Turo, Getaround and Audi on demand all offer different pricing and rental models, which could save money.
• Make smart shopping choices. Not all rental car companies have the same prices, nor do all locations. For example, renting a car at the airport is 26 percent more expensive than a downtown location, according to a NerdWallet analysis of 360 rental car reservations to better understand the cheapest ways to rent.  

Among the rental car companies in the analysis, Enterprise was often the cheapest, while National was often the most expensive. It also found that last minute rentals are typically cheaper than those booked months in advance, and one may almost always save by booking at an off-site rental car location versus at the airport.

NerdWallet also recommends using a search engine that compares several rental car companies to obtain the best rate. However, make sure  the final price  includes all taxes, fees, and insurance costs needed.

Last, but not least, don’t over-pay for coverage that might already be provided through your credit card benefits.

Freedom to Get Around

It is believed rental car prices might come down later this year or early next. However, we’ve heard this before and statistics regularly show people are traveling for pleasure and business today more than ever and making up for lost travel opportunities due to the pandemic.

Renting a car can be a rewarding experience – allowing for independence and freedom – but stress and relocation costs can be minimized with proactive awareness. NEI consistently works with our clients to discuss the most cost-effective options available.

If you would like to discuss this or other relocation / travel policy trends or cost-saving solutions, please reach out to your NEI representative.

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Expert Home Pricing for Corporate Relocation

In the fast-paced arena of global mobility, swift and efficient property sales are critical for seamless relocations. Partnering with a relocation management company, like NEI Global Relocation, which vets top-tier real estate agents for their relocation related experience can help expedite moves.

John D'Ambrogio of @Properties is one such relocation agent and explains why proper pricing for relocating families is so important.

The Parade Only Passes by Once

In real estate, timing is everything. The parade of potential buyers passes by just once. When a property is freshly listed at the right price, it captures the attention of a vast pool of potential buyers. However, delays or mispricing can lead to minimal exposure, longer time on the market, and missed opportunities for relocation managers.

The Power of Proper Pricing

Today's buyers value precision. Overpricing a property can deter them. The National Association of Realtors states that pricing a property correctly appeals to 60 percent of buyers, but just a 10 percent overpricing reduces this figure to 30 percent. This reinforces the need to offer competitive and fair corporate relocation services.

Timing Matters in Real Estate and Relocation

Timing is pivotal in both real estate and relocation. Seasonal variations significantly impact outcomes. Just as summer is the peak season for home sales, winter tends to be slower. Choosing a reputable relocation management company with a service partner network of quality agents can help you adapt pricing and strategies accordingly to ensure efficient transitions.

Conclusion

Successful pricing for relocation hinges on selecting the right partners and understanding the critical role of timing. If you're seeking a partner with a track record of professionalism and delivering exceptional results in corporate relocation services, don't hesitate to reach out to NEI Global Relocation.

International Assignment Mentor Program Benefits

Designing an effective mentor program in the home country for employees returning from an international assignment can greatly benefit employee retention.

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Aiding The Competition

Sometimes, the “larger cost” of an employee’s international assignment may only be felt when they resign from the company after repatriation due to feelings of being unappreciated or underutilized.

Consider “Gustavo”, who completed an exciting two-year assignment in Latin America. Upon repatriation to his home country, he was relegated back to the same position he held before leaving. His managers didn’t know how to use his new skills and envious colleagues teased that his assignment looked more like a paid vacation.

He felt like his new professional growth and knowledge from the assignment counted for nothing, so he accepted a position with a competitor that valued it. Now, his old company competes against Gustavo daily - having paid for him to gain the valuable international experience.

“The employee sees the assignment as a passport to promotion,” writes Benjamin Bader, co-author on a repatriation study, “but the employer wants someone to get the job done and is not making any promises.”

Sadly, Gutavo’s situation above is not an exception: according to a report by Deloitte, 71 percent of employees who leave a company within two years of an international assignment think their leadership skills were not being fully appreciated.

Mentorships Make an Impact

What can be done to reduce such unfortunate and costly post-assignment situations?  Best practice assignment repatriation strategies to retain talent can include:

• Planning and discussing expectations of post-assignment career possibilities.
• Helping counter reverse culture shock, boredom, and re-adjustment difficulties.
• Maintaining strong, regular communication to remain connected to the corporate office/team while on assignment.
• Requiring home leave visits to the home country office to stay connected and consider post-assignment roles, rather than unrestricted home leave benefits to any location.
• Conducting assignee career planning at least eight-to-ten months before their repatriation.

A missing, often overlooked option towards maximizing one’s Return on Investment is a low cost / high value international assignment mentor program that can improve the likelihood of repatriating employees hitting the ground running after repatriation and staying with a company long term.

Consider these remarkable corporate mentor program statistics:

• Ninety percent of workers who have a mentor report being happy in their job and 71 percent of people with a mentor say their company provides them with good opportunities to advance in their career, per a CNBC/Survey Monkey report.
• Employees who are involved in mentoring programs have a 50 percent higher retention rate than those not involved, per MentorcliQ.
• Millennials intending to stay with their organization for more than 5 years are twice as likely to have a mentor than not (68% vs 32%), according to a Deloitte survey.
• Since the pandemic, there has been a 30 percent increase in mentoring initiatives at organizations, according to talent solutions provider LHH.
• 89 percent of those who have been mentored will also go on to mentor others, according to the firm McCarthy Mentoring.

After all, having someone who has been through an assignment and repatriation – and knows the inner workings of the organization can prove invaluable.

A Structure for Success

It is critical to get employees on assignment thinking about “post-assignment life” well in advance of repatriation.  

It has repeatedly been shown how important it is for employers to recognize and validate returning assignees' new “international identity” by giving them opportunities to use their skills learned on assignment for their employer.

Home country mentors can add a personal touch -- based on their own, previous repatriation experience and going through a similar transition. Consider the following steps to develop a program by starting small and building up the programs over time:  

1:  Define objectives.

Make program goals realistic so they are obtainable. If there’s too much formality, the mentor programs risks being seen as the company pushing a “feel-good directive” and it might turn people off from participating if it’s seen as more work with no direct benefit.

2:  Keep it simple.

A successful home country mentor program could start with a small pilot program that includes a handful of employees going on assignment and mentors who have been through the process. Programs that take a proper amount time to gather the appropriate volunteers and budget, while piloting a small-scale effort, will succeed more often before engaging in company-wide home country mentor program.

3:  Identify and pair mentor cadres.

Finding willing mentors may prove a challenge. Opinions diverge on the best approach to forming each mentor-employee connection. Some firms use an application and interview process while others let employees on assignment choose from a pool of approved mentor names. A good mentor is like a good coach who asks the mentee probing questions based on their repatriation experience to help them transition back and discuss potential expectations, challenges, and opportunities.

4:  Choose desired training approaches.

Formal, informal or hybrid training? No matter the approach selected, a mentee should be asked up front what they want to get out of such a mentorship program.

5:  Setting clear and realistic expectations.

Setting clear expectations upfront in writing and counseling each assigned mentor-employee pair about your company’s vision for the program is key, as is the program’s expected timeline, personal boundaries, and the need for confidentiality between parties.  HR should make clear to all involved that the mentor’s role is not to help secure the repatriating employee a new position or advocate for them before they return. Ultimately, that is commonly the employee’s responsibility at most companies today.

6: C-suite buy in for the program.

Finally, having buy in for an assignee mentor program initiative from one’s C-suite on down the chain of command is imperative. As noted in Success Magazine: “If you start a mentorship program that does not involve the C-suite, it will fail. Senior management should be heavily involved in setting guidelines, actions and goals for the program.”

Executives can also host quarterly, small group virtual sessions with company employees on assignment “so protégés can benefit from their wisdom and insight – without the tinge of favoritism that could otherwise arise” if they were to act as direct mentors themselves.

Challenges and Opportunities

One may think people would embrace the opportunity to become a mentor to others, but there are challenges to consider for attracting mentor candidates. These can include time, interest, and motivation:

• ‍Time:  In an already time-starved business environment, who has the time to oversee this program is one consideration, but even the most motivated mentors may defer from participating if they’re already too busy and it’s not part of their core objectives.  ‍
• Interest:  The best mentors are those who have volunteered (not “voluntold”), who get satisfaction from helping colleagues, and who have themselves also had international assignment experience. According to Jan Rose of Capital H Group, in Chief Learning Officer magazine: “People lose interest…People lose track of what the program is supposed to do…Mentoring program failure might occur because the program’s goals are either fuzzy or they’re all over the place.”‍
• Motivation:  If a corporate culture is ultra-competitive internally or there may be concerns about future downsizings, mentors may not want to coach their fresh-off-an-assignment colleagues.

For employees who have concerns over the above attributes, but the right past experience to help an assignee, there are additional perks mentors experience beyond helping a colleague.

It is found that employees who mentor typically raise their visibility within the organization and expand their personal network of contacts and mentors are 6 times more likely to be promoted, according to stats compiled by the Human Resources department of Sun Microsystems, writes Anne Fisher of Fortune Magazine.

Mentorships today also don’t need to be down the hall, in the same building or even the same country. Mentoring can be done via phone, Zoom, FaceTime, Teams, or email.

Finally, “Tapping into a mentor’s knowledge doesn’t have to be a person who is older. We live in an era that, in a few years, over 50 percent of Americans will have a boss who is younger than them,” says author Chip Conley.

Better Than Finding Qualified Replacements

Ideally, the importance of “life after repatriation” would be discussed with the employee at the same time they accepted the assignment and, six months prior to returning. The company would distribute the employee’s information to divisions and company hiring managers with open positions that would complement the employee’s experience.

Combined with this approach, mentor programs are highly effective to make employees feel supported before, during and after assignments. Though they seem easy on paper, internal planning and oversight for ongoing success and sustainability is key. It is a low-cost effort that can differ greatly by organization, but mentorship programs can make a lasting, positive impact on employee satisfaction, retention, and company ROI.

For more information, please contact your NEI representative.

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The first half of 2023 is behind us...

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...But there’s much economic and real estate market uncertainty going into the second half for renters and homeowners. How will this affect global mobility and relocation services?  

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Real Estate Market Tug of War

Lawrence Yun, Chief Economist, National Association of Realtors (NAR) recently captured the changing real estate market conditions succinctly: “The market is clearly turning.”

Yet demand is not diminishing with the scarcity of single-family homes and there’s only a three-month supply of existing inventory. Add on to that, one-in-seven homeowners refuse to sell due to current mortgage rates. This puts continued pressure on rising home prices.

“Home price trends are caught in a tug of war between stretched buyer budgets and limited inventory forcing competition despite reduced affordability,” said Danielle Hale, Chief Economist for Realtor.com.  

What can be done to help relocating employees with this issue in 2023 and 2024?

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Good News / Bad News: First Time Homebuyers

While lower home values could hurt sellers, any listing price drops may entice buyers to submit offers – especially Millennials who rent. This is especially true for the record number of American renters who are spending at least one-third of their income on rents, according to Harvard’s Joint Center for Housing Studies.

However, paying a lower home purchase price and then having to finance it with a high interest rate can seem like “good news/bad news” to first time home buyers. In Q2 2023, the share of all prospective buyers who are in the market for the first time dropped to 61 percent, down from 71 percent in the first quarter per the National Association of Home Builders.

New construction has become an alternative solution for some frustrated buyers. Sales in the $200,000-$300,000 range for new builds surged in May 2023 to 12,000 new home builds sold, compared to May 2022 when only 5,000 sold. With that in mind, 51 percent of all housing market construction in Q1 2022 was for high-cost / luxury rental units and this shift towards higher-cost rental units has been observed through Q1 of 2023, per Moody’s.

Companies can help renting relocating employees who wish to become homeowners. NEI sees more companies now offering reimbursement of destination home closing costs and direct-billed mortgage partner assistance to relocating renters.

Another method companies can use to help recruit critical talent to needed locations is to offer homebuyers funds towards new home down payments or other incentives in the form of forgivable loans that don’t have to be paid back unless the employee leaves the company within a certain period, perhaps two or three years.

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High-Rate Environment Drives Corporate Relocation Assistance

There are limited incentives for homeowners to give up their low mortgage interest rate when securing a new 30-year fixed mortgage since the average rate now sits in the seven percent range - over double the average rate during the pandemic.

Fed Chairman Jerome Powell was watching the unfolding situation carefully: “Housing is very interest-sensitive…it’s one of the first places that’s either helped by low rates or held back by higher rates.”

With possibly one or two more Federal Reserve rate hikes expected this year, consider the following options to help employees/candidates consider a company-sponsored move in such a high-rate environment:

• 3-2-1 Interest-Based Mortgage Subsidy

An appealing option for companies to consider is a subsidy program that supports mortgage payments over a set period to help the employee ease into the higher mortgage payment.

Many companies use a three-year period with the subsidized rate decreasing each year until the company would no longer subsidize interest. For budgeting, some prefer to define a maximum subsidy dollar amount spent per year for the benefit.

• Mortgage Interest Differential Allowance (MIDA)

MIDA was developed as a solution to assist employees purchasing a home at a significantly higher interest rate. Eligibility is based on if a specific interest rate threshold is passed (e.g., 7.5 or 8 percent with at least 2 percent differential on the employee’s existing mortgage). The company would temporarily pay the difference in interest between the employee’s former mortgage rate and their new one, for a set amount of time. The MIDA is sent to the lender and reflected on the employee’s payment.

Some mobility policies require employees to invest their full equity from the sale of the old home into the new home’s purchase to be eligible and maximums are sometimes placed on the total differential.

• Prepaid Interest

Companies can pay for loan discount points to assist relocating employees facing higher rates on a home purchase. Discount points are paid up front in exchange for a lower interest rate over the life of the loan.

Some mobility policies have a sliding scale for points coverage tied to the current market rate. If using a sliding scale, it may make sense to lower thresholds. Companies may offer to pay for one point when rates reach seven percent, two points at eight percent, and so forth. Thresholds help keep pace with changing rates and make moving more agreeable. Because this benefit impacts the life of the loan, this may not be the best option for an employee who could be relocated again within a few years.

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Few Economists Expect Housing Crash

Predictions about a housing market crash create headlines, but few economists expect a nationwide decline like 2007-2009. Consider some big differences today:

• There are simply not enough homes to meet current demand and the country ultimately needs 4.3 million more homes, according to a Zillow analysis.
• Most homeowners with a mortgage today have great credit, significant home equity and a low rate. Housing prices in October 2022 were 38.1 percent higher than they were at the start of the pandemic in March 2020, per Fortune.
• About 90 percent of U.S. mortgaged homeowners have an interest rate below 6 percent, a Redfin report showed. 62 percent have a rate below 4 percent and nearly one-quarter have mortgage rates below 3 percent.
• Home value increases or decreases are more impacted by location today as compared to nationwide 15 years ago. Western U.S. home values have been hit particularly hard.
• Finally, we have strong consumer demand today and unsold inventory sits at a 3.1-month supply. “There are simply not enough homes for sale,” said Lawrence Yun of NAR. Realtor.com reported home sellers were less active in June 2023 with 25.7 percent fewer homes newly listed for sale compared to 2022.

For comparison, there was an 11-month supply of inventory in June 2008, interest rates were 6.32 percent, and 33.8 percent of homeowners were in a negative equity position. Since then prime mortgage requirements have become significantly tighter.

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Unpredictable Markets, Proactive Relocation Services

The U.S. may likely end 2023 with higher short-term interest rates, but Moody’s Analytics Chief Economist Mark Zandi anticipates housing affordability will improve over the next few years, as reported in Fortune magazine.

Zandi feels rates will drift towards 5.5 percent in 2025 and national home prices may fall around eight percent, but "In our thinking this [price] weakness plays out over the next three years, there's no cliff event here, it's more of a slow grind lower," Zandi told Fortune.

NEI proactively counsels relocating employees about the emotional ups and downs when buying/selling a home and during the necessary negotiations, and we help clients brainstorm solutions. NEI monitors market and economic conditions to proactively discuss various options with clients, so client recruitment and retention goals are achieved.

For more information on the above or other needs or to discuss in more detail, please reach out to your NEI representative.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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Changes Coming to Banking Regulations in the UK

An important change was announced regarding the list of countries where supporting assignees in opening bank accounts is allowed while still in the home country and prior to arrival in the UK.

Previously, global bank HSBC had been able to open accounts for residents of 27 EU countries while they were still in their home country. Due to changes in cross-border regulations and recent developments regarding Brexit, the number of eligible EU countries has been reduced to 12 with immediate effect.

Please see the revised list of 12 EU countries below, provided by NEI’s London-based service partner Icon Relocation, where HSBC can support assignees with a UK account before arrival in the UK. There is no change with supported international countries outside the EU.

Note: this chart relates to the country of residence, not the nationality.

According to Icon Relocation, assignees living in the approved countries can provide proof of their overseas address. HSBC and Barclays Bank will continue to support other assignees once they have arrived in the UK without the need for proof of a permanent UK address.

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Reminder of Documents Required

• Proof of identity document, e.g., passport.
• Address verification document for one’s residential address in the UK or overseas. HSBC can accept a letter from one’s employer that must be from a member of the HR team, issued on UK company letterhead, and include employment dates. The letter must also include a UK address if known or an overseas address if the UK address is unknown or not yet confirmed.
• Salary verification may be required.
• Verbal disclosure of Tax Identification Number.

NEI and our global service partners will continue to provide clients with updated information on this topic and others as they arise and to manage relocating employee expectations accordingly.

If you would like to discuss this visa and immigration situation further, please reach out to your NEI representative or Mollie Ivancic, NEI’s VP, International Services.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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NEI Service Partner Spotlight - Bennett International

‍This month’s NEI Service Partner Spotlight features Bennett International’s President, Timothy Dwyer, discussing the challenges associated with coordinating school and home selections for all relocating assignees and their families.

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What to Focus On?

It’s the mobility world’s equivalent of the “chicken or the egg” conundrum: when preparing to move to a new location, should the family focus first on schooling or on housing? In an ideal world, the child would be placed in a school with an appropriate curriculum that is a good match for their learning style and needs, while the family’s housing would be in a vibrant, safe neighborhood not too far from both the school and the parents’ work locations. That ideal world can be tough to achieve.

Making the right choices for both housing and schooling are crucial to the success of an international assignment, but getting there often requires expertise in both areas and simultaneous, closely coordinated searches. And when the intention is for the children to attend public (free) schools (as opposed to fee-based Private or International Schools), the challenge becomes even more complex.

No Guarantees

Perhaps the most common misperception is that residing in a particular neighborhood— within the “catchment area” of a desired school—will result in the child attending that particular school. A "catchment" is a defined area of a community within which a school will normally accept students. Depending on the country and specific location, living inside the designated catchment area may improve the child’s chances of attending a particular school, but it is rarely a guarantee. There are several factors that might come into play:

• Limited Space. The school might not have enough room. Neighborhoods with “good” schools tend to attract residents, resulting in schools being filled to capacity. Last year, in the greater London area, almost 20 percent of secondary school students did not receive a place at their preferred school because of limited space.
• ​Special Needs. The child might have a special education need which is not adequately supported by the nearest school, and they may therefore be directed to a school better equipped to address their specific need. This could also happen if the child is not sufficiently conversant in the host-country language; many cities have public schools dedicated to supporting students with significant language needs.
• ​Barrier to Entry. The nearest school might be a charter, magnet, specialized, or other type of selective school which has a barrier to entry. This might consist of academic prerequisites, a required examination, academic achievement and/or nomination from the child’s current school, some schools even employ a lottery system for entry.

Often the first steps of the admission process and related exams for these schools begin long before the start of the school year. Newly arrived families are at a distinct disadvantage when competing with those who have already been navigating the process for months or sometimes even years.

At the same time, finding suitable housing in the right location that is within the employee’s budget can also be difficult in many major cities. Often, desirable properties are on the market only briefly before they are snatched up. Yet a relocating family can be hesitant to commit to a property until schooling is settled. The challenge in that situation is that many public schools can require proof of long-term residence (such as a signed lease) before they will allow a child to enroll.

Close Collaboration is Key

When housing and schooling both pose challenges for relocating families—a situation we see in many high-volume destinations—the most effective answer is for the home-finding and education advisement experts to work closely together throughout the relocation process. They must be able to form a team, balancing the priorities and requirements in each area while keeping the family’s best interests front and center. Few things can be more frustrating for a family going through the stress of relocating than receiving contradictory guidance from different members of the team assembled to support them.

When Bennett is part of a relocation support team, we embrace good coordination with our settling-in and real estate partners. We have seen how thoughtful, friendly, and creative collaboration between all players on a relocation team is the key to a seamless and positive experience for the relocating family. Indeed, it’s the well-woven safety net of expert service providers that can transform the assignee and family experience from one of uncertainty and stress to one of clarity and excitement. Our goal is for the assignee to not only realize that an assignment can “work”, but to welcome it as a rich and thrilling next chapter—for them and for their children.

If you have questions about the support available to relocating families on international assignments, please contact Mollie Ivancic, VP International Services at NEI Global Relocation.

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Surging Global Rent Prices

Rent prices worldwide have been surging at an alarming rate, increasing by 23.5 percent since 2019; with a projected compound annual growth rate (CAGR) of seven and two tenths percent for rental properties until 2027.  This global phenomenon is driven by multiple factors, such as:

• Growing preference for renting among millennials
• Limited housing supply
• Rising homeownership costs
• Return of transferees or natives to their home countries

These soaring rent prices are compelling companies to reassess their relocation strategies. Let's delve into the rent increases across different regions and explore the implications for company relocations.

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United States and Canada

Renting instead of buying has been more popular for individuals and transferees. According to Dwellworks, the United States has been building rental supply at a significant pace, with nearly 400,000 multi-family units being built since April. However, Single-family units are still behind on the amount of supply needed to cover the demand for transferees who might prefer a home.

Rental markets are still seeing a spike in demand for rental units however, with most of these being cities based in the Midwest due to their lower cost of living, the highest rise in rent YOY include:

• Indianapolis, seven and four tenths’ percent YOY
• Kansas City, seven percent YOY
• Chicago, Columbus, Cincinnati, and St. Louis, six percent YOY

According to Realtor.com, the average monthly rent for a one-bedroom apartment in the U.S. from May 2023 is $1,628 USD and $1,903 USD for a two-bedroom apartment. Like the U.S., Canada is grappling with a shortage of housing supply and escalating demand. The average rent for a one-bedroom apartment in Canada stands at $1,811 CAD ($1,356 USD), while a two-bedroom apartment commands $2,239 CAD ($1,677 USD). It is unlikely that the rent will lower in Canada anytime soon, best-case scenario is that rents will remain the same.

Little to no new construction, particularly in cities like Toronto and Vancouver, coupled with high immigration rates have further exacerbated the rental price surge and international transferees are usually placed near the bottom of the priority list.

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EMEA

Europe overall has seen a spike in rent increases due to inflation and shifting relocation patterns, keeping transferees in major urban cores.

In the United Kingdom, the Renter's Reform Bill is awaiting a second reading in Parliament. While the bill aims to grant transferees more rights, such as protection against arbitrary evictions and accommodations for children and pets, it has inadvertently triggered a wave of evictions by private property owners and a significant spike in rental prices. As of April 2023, rent in the Greater London Area reached £2,516 GBP ($3,170 USD) per month for a one-bedroom flat, and a two-bedroom flat going for £3,448 GBP ($4,344 USD). This represents an increase of nearly £200 compared to the previous year.

In Dubai, rental prices have soared due to intense competition to acquire a "golden visa," a slowdown in construction activities, and stricter financing policies. Between January and April 2023, rents surged by almost 26 percent, with the average monthly rent for an apartment reaching 8,556 AED ($2,330 USD).

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APAC

Singapore has experienced a staggering surge in rent, with an average monthly cost of $5,075 USD, surpassing Hong Kong as the most expensive rental market. Although experts anticipate a potential cooling down later in the year, Singapore's measures to stabilize the market and a decline in demand resulting from tech sector layoffs have influenced rental prices. Moreover, native Singaporeans are increasingly choosing to rent as singles, adding to the growing demand.

Australia has witnessed an 11.2 percent increase in median house rent during the first quarter of 2023. Factors contributing to this surge include the reopening of borders, high immigration rates, proprietors capitalizing on the heightened demand, rising construction costs, and favorable tax policies for property owners.

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Conclusion

As the world navigates a new way of life, these rent fluctuations may persist, posing challenges for relocating employees and temporary assignees. NEI recognizes the complexities involved in global mobility and strives to secure suitable housing for transferees and assignees well in advance. While being proactive and starting an early search is important, understand that housing costs will still be high. Allocating an appropriate budget remains the most crucial step.

NEI works globally with local destination service providers who are on location and in country to provide the most timely and relevant picture of local market conditions. They can provide the best options available at any given time. If you have concerns related to the global escalation of rental rates, please reach out to your NEI representative for more information.

This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors before engaging in any transaction.

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Travel Authorization Shifts

Enforcement of three new travel authorization systems have been postponed again in the U.S. and Europe:

1. ETIAS (European Travel Information and Authorization System) – until 2024
2. The UK’s ETA (Electronic Travel Authorization”) visa waiver – dates vary by county
3. REAL ID – delayed until May 2025

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ETIAS Postponement

Europe receives over 37 million visitors each year, so the introduction of ETIAS – similar to the U.S. ESTA program (Electronic System for Travel Authorization registration system) – is expected to have a significant impact on travelers from around the world, including the globally mobile workforce.

The roll-out for ETIAS has been planned for years, but the start date has been repeatedly pushed back from 2020, 2022 and 2023, to launch in 2024. There is speculation the new 2024 date could be pushed back further, perhaps after the Summer Olympics in Paris concludes on 10 August 2024.

Once implemented, all visitors who previously travelled visa-free to Europe’s Schengen Zone will be required to register in advance online. To register, individuals will need a passport valid for three months beyond the intended stay, an e-mail account, and a credit or debit card. Passengers will be required to complete an online application form that covers a range of biometric, travel and security related questions. Data will be checked against a variety of European and International databases including no fly lists, to identify potential terrorist and criminal threats who will then be refused entry via the ETIAS program.

When up and running, it is expected most ETIAS applications will take 20 minutes to complete, but time will vary based on additional fields one may need to fill out. Applications may be processed and delivered by e-mail within one hour if no further checks are required, but it could take upwards of 96 hours if additional information’s needed. An application fee will be €7, though travelers under the age of 18 or over the age of 70 will not need to pay a fee.

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United Kingdom ETA Visa Waiver

Coinciding with the EU’s introduction of ETIAS next year, the United Kingdom (UK) announced that its “Electronic Travel Authorization” (ETA) visa waiver will be implemented this fall, with a fee of £10 per applicant and mandatory for all foreign visitors, including those from the U.S., requiring them to apply online before their trip.

The UK will gradually implement the ETA, starting with Qatar citizens in November and extending to travelers from Bahrain, Jordan, Kuwait, Oman, Saudi Arabia, and the UAE in February 2024. Other nations – including the U.S. – will need to apply for the ETA by the end of 2024.

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REAL ID Postponement

To help improve airline security, Congress passed the REAL ID Act in 2005 and the U.S. Transportation Security Administration and other federal agencies announced they would require REAL ID compliant licenses for people 18 years old and older to fly anywhere within the U.S. starting in May 2023.

However, the Department of Homeland Security announced the deadline would be extended until 7 May 2025 since state motor vehicle departments need more time to process the backlog of applications created by COVID-19 and only about 50 percent of the U.S. population has REAL ID compliant documentation.

Secure REAL ID will “set standards for the issuance of sources of identification, such as driver’s licenses” and will have a star at the top of the license. When enforced in 2025, it will be required for every air traveler 18 or older at airport security checkpoints for domestic travel. Those under 18 must be travelling with an individual who has acceptable documentation.

To get a REAL ID license, a person typically will need to show proof of their full legal name, date of birth, Social Security number, two proofs of residence and lawful status. Lawful status means that the person will need to provide valid documentary evidence that they are lawfully in the United States per Section 202.(c)(2)(B).  

Still, despite REAL ID requirements, other documents may be substituted or used instead when enforcement starts in 2025. These may include U.S. passports, Department of Homeland Security-trusted traveler cards, U.S permanent residence cards, federally recognized tribal-issued photo IDs, and USCIS Employment Authorization Cards.

Costs will be tied to local fees associated with obtaining driver licenses or identification cards. Employers should encourage their employees to determine if their current identification includes the star. If not, it would be good to advise them to obtain the REAL ID designation to avoid unnecessary delays obtaining the necessary documentation for traveling by air by the 7 May 2025 start date.

This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors before engaging in any transaction.

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NEI Service Partner Spotlight - Furnished Quarters

This month’s NEI Service Partner Spotlight is on Furnished Quarters and how they serve the dynamic needs of today’s temporary housing needs across multiple countries.

Read the whitepaper here.

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Attention to Detail

Moving can be stressful for families in the best of situations, but one of the major considerations for accepting a relocation involves the impact to one’s children. For companies relocating families with a “special needs” child, the situation can be particularly challenging.

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More Preparation

There are 7.2 million students aged 3-to-21 studying under the Individuals with Disabilities Education Act (IDEA) in the U.S. today, making up about 15 percent of all U.S. public-school students.

Though awareness of child learning, health disabilities and other special education needs have increased dramatically, relocating loved ones with such needs usually requires more preparation and attention to detail to ensure the right support is provided before, during and after a transition.

Additionally, because health information about an employee / family is private, companies may never even know if relocation candidates turn down offers because they were either unsure if their child’s unique requirements could truly be met in the destination or if they would have access to necessary special needs support services similar to their current network of providers.

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Active Listening Makes a Difference

NEI has considerable experience assisting families with special needs children, be it learning disabilities or health concerns, and we navigate each situation to develop the best solutions. In fact, our experience led us to develop the You Allowance as a way for companies to provide additional support for unique situations just like this.

Our Account Executives are trained to conduct a detailed Family Needs Assessment to learn each relocating family’s priorities, needs and interests. They also learn how to recognize unspoken needs or concerns that could lead to employee/family reluctance to relocate.

NEI and client-approved service partners can provide guidance to families and work with resources in the destination to create a pre-move strategy and timetables to maximize the family’s time and address their home finding trip concerns. The following information provides two case studies involving the need for special assistance.

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Short Term Rental with a Pool for Therapy

NEI worked with a family with two children moving from Missouri to New Jersey, one of whom had special needs. The family’s original intent was to purchase a home, but due to other circumstances they had to secure temporary living for six months with one requirement: a pool for the child’s therapy, as well as a separate living space for him.

Identifying a real estate agent who specializes in short-term rentals was NEI’s first step. The agent quickly located a private residence that included both a pool and the exact accommodations requested so the child’s routine wouldn’t miss a beat.

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The Perfect Destination School

With the client’s approval, NEI partnered with a fee-based service partner to help a transferee find the perfect school for his child with autism when he was needed for an Atlanta to Los Angeles relocation. The service partner set up family appointments to visit each school based on the family’s unique needs, helped with the interview process, consolidated all documentation from the child’s previous program in Atlanta and even helped with school admissions paperwork.

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Planning, Research, Preparation

For families deciding to relocate with a special needs child, it is important to start researching and planning early. Gathering all documents necessary to obtain the services and support needed in the new location is critical. Letters from teachers, therapists and other professionals who currently work with the child should be requested as quickly as possible to save time and stress.  

Simultaneously, NEI provides links to school information in the destination city on our personalized NEI Cities website and, if client-approved, will recommend a contact for professional school search support. This is considered a best practice with NEI coordinating and managing expert service partners to advise employees on available schools, curriculums, and answer all questions. Here is a great example of how this type of support can help:

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Supporting a Child Not Happy about the Relocation

NEI’s service partner worked with a family who was going on a house hunting trip to South Carolina. The family’s 10-year-old autistic son was resisting them – at every step – and was very unhappy. However, he had a new passion: martial arts. Our service partner located several martial arts studios and recommended the family trip include exposure to the different facilities and instructors. Their son tried three studios and, from that point on, he was “sold” on their relocation, even volunteering to help with decisions regarding the move.

If professional assistance is not offered by an employer, transferees are encouraged to contact destination area schools well in advance to discuss their child's needs and share copies of any individualized education plans. It is vital to speak to school counselors in the new location to understand the options a school offers.

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Breaking the News

Acquainting a special needs child with the idea of relocating is important. Experts encourage families to:

• Announce the move with plenty of advance warning: weeks for a younger child; a month or more for teenagers
• Make a visual schedule of the move process
• Involve the child in planning and packing
• Show where the family is headed by viewing online photos and videos of their destination’s neighborhood, school, playgrounds, parks, library, and points of personal interest to the family.

The smallest details about transportation of household goods and temporary living for the families of special needs children cannot be overlooked. NEI worked with one family having very specific needs:

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Exceptions for Household Goods and Temporary Living

During the NEI assessment call, an employee indicated he had a child with special needs and one of his biggest worries about relocating concerned the transfer of his medical equipment and temporary living accommodations. Our Account Executive:

• Secured a client exception to move items that were a necessity for the child, including a hoist chair, hospital bed and automated wheelchair
• Worked with the client and temporary housing partner to accommodate the family in an Airbnb home environment, rather than a corporate apartment
• Arranged for installing a temporary wheelchair ramp at the home
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Patient, Proactive and Compassionate

Relocation success is so much more than just selling a home and moving household goods – it affects the entire family and requires everyone’s buy-in for the move to be a success.

Understanding how important it is to be patient, proactive and compassionate for all relocations, but especially for those which can be more complicated, has been engrained in our culture at NEI since our founding.

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If you would like to discuss proactive policy changes, such as our You Allowance, or options to help families with special needs children, please reach out to your NEI representative.

Nations Revamp Immigration for a Skilled Workforce

Global competition to attract top talent and skilled labor is heating up as countries look for every edge to attract the best foreign workers and students. To that end, countries are shifting immigration policies to favor the best candidates and help solve internal economic and demographic challenges.

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Intense Country Competition

The 2023 Hiring & Workplace Trends Report produced jointly by companies Glassdoor and Indeed finds there will likely be a persistent tight supply of workers for years to come in key economic sectors and without sustained immigration, an increase in labor productivity or a focus on attracting workers, many industrialized countries will continue to struggle with a tight labor market.

Countries are implementing new programs to not only understand where new talent may come from, but also which countries’ talent pools they can best attract and then changing immigration requirements to support this.

Successful governments are implementing four key strategies to attract international talent, according to the Mauve Group, a provider of Global Business Solutions and Consultancy Services:

1. Introducing new work visas

2. Shifting immigration policies

3. Targeting incentives for specific occupation shortages

4. Offering financial incentives and better benefits

Consider this small sample of recent country-specific schemes to attract talent:

• The UK feels its High Potential Individual (HPI) visa route will attract the "brightest and best" early in their careers allowing identified talent permission to stay in the UK for at least two years.
• Hong Kong says its “Top Talent Pass Scheme” will raise its international competitiveness by offering them a two-year visa that allows them to work, establish a business or change employers in Hong Kong.
• Finland’s “Talent Boost” program aims to attract high-skilled workers from Vietnam, as well as Brazil, Turkey, and India.
• Canada’s New Brunswick province hosted recruitment sessions for candidates of specific countries, such as Nigeria, the United Arab Emirates, and Argentina.
• Bahrain’s Golden Residency Visa helps international workers stay in Bahrain permanently.
• The German government announced plans to make it easier for IT workers from India to obtain German work visas.
• The United Arab Emirates extended its Golden visa program to attract skilled foreign talent -- professionals, scientists, and researchers - to live, study, or work in UAE for 10 years.

Clearly, a post-pandemic global battle for talent and immigration shift is underway, one that will be critical to the future success of many countries as demographics and economies evolve.

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Country Case Study: Japan

Every country’s immigration scheme has their own specific and highly unique details for candidates to qualify for entry and attention to details cannot be emphasized enough.

Consider the example of Japan, which ranked 41^st of 63 economies in 2022 for attracting and retaining talent. To improve its position in the high-stakes global talent game, it recently introduced two new visas, the J-Skip and the J-Find:

• The “J-Skip” Visa, aimed at attracting special, highly skilled professionals to Japan.
• Requirements: Individuals who hold at least a master’s degree or 10 years’ relevant work experience with an annual income of 20 million JPY ($143,530 USD) or more can apply for either a Highly Skilled Professional (i)(a) - advanced academic research activity or a Highly Skilled Professional (i)(b) - advanced specialized/technical activity. Individuals with 5+ years of practical experience in business management with annual income of 40 million JPY ($287,060 USD) or more can apply for a Highly Skilled Professional (i)(c) Advanced business management activity.
• The “J-Find” Visa, designed for recent graduates of highly ranked universities to pursue job or entrepreneurship opportunities in Japan. They will be allowed to stay in Japan for up to two years for job hunting and preparation for starting a business. They can also accompany their dependents, such as spouses and children.
• Requirements: Status of residence will be granted by Japan to graduates of a university ranked in the top 100 of at least two of the following three World University rankings* within the last five years and have an amount of deposit and savings of at least 200,000 JPY ($1,435 USD) for living expenses when applying.  * QS Top Universities, the Times Higher Education World University Rankings, and Shanghai Jiao Tong University’s Academic Ranking of World Universities.

Further supporting this effort and a talent pipeline, Japan’s Council for the Future of Education Creation also recently announced an initial proposal to further “internationalize” higher education with the goal of attracting over 400,000 foreign students from overseas institutions and encouraging them to work in Japan after they graduate.

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Global Talent and Immigration Shift

It is clear countries will continue modifying visa and immigration laws to help boost their future economies and compete as popular destinations for global talent.

If you would like to discuss this or other immigration or global mobility trends or company needs, please contact your NEI representative.

The above article is provided for informational purposes only. Please consult your tax, legal, immigration or accounting advisors before making any decisions or transactions.

Inflation Decreasing, but Insurance Increasing

On the heels of high inflation costs, homeowners across the U.S. are feeling new financial pain when receiving their annual home insurance renewal bills.  

This in part due to rising costs of materials to repair or replace homes – the values of which have risen 37 percent nationwide over the last three years – and in part due to extreme weather – hurricanes, tornados, ice or hailstorms, and wildfires.

Analysts expect further insurance rate hikes this year and homeowners are feeling the impact. As reported in the New York Times, American homeowners have seen their bills for property coverage grow by 21 percent on average since 2015 with some individual state averages, like Florida, reaching as high as 57 percent with another 40 percent increase anticipated next year!

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Home Insurance Rate Factors

Rates can vary significantly based on where a home is, how much coverage one needs, and personal factors of an individual, like one’s credit and claims history.

According to Bankrate.com rates for $250,000 in homeowner coverage, by state, averages from $3,659 per year in Oklahoma to $382 per year in Hawaii. Although the national average is near $1,500 per year, it is a bit deceiving due to the wide swings in premium costs.

• The top five states with the highest average rates include Oklahoma, Kansas, Nebraska, Colorado, and Arkansas.
• The bottom five states with the lowest average rates include Hawaii, Vermont, Delaware, Utah, and Oregon.

High risk has made insurance companies pull back in event-prone areas. Insurance companies State Farm and Allstate recently stopped accepting new homeowner insurance applications in California citing risks from catastrophes. In Florida, ten insurers became insolvent in the last two years due to losses and more than a dozen others either left the state or placed moratoriums on writing new business.

For those employees considering a relocation, homeowner insurance in some states could be a shock and should be considered when developing a relocation package.

What to Do?

Homeowner insurance is not required by state or federal law, but mortgage lenders will almost always require insurance to protect their financial interest and despite two out of every three homes in America reported to be under insured already, a sharp rise in costs may tempt more homeowners to cut coverage back further despite the risks.

Consumer Reports says now is the time to shop around and a good time for an insurance checkup, ask about any discounts for switching, be financially prepared for storms and have the right types/levels of coverage.

Mark Friedlander of The Insurance Information Institute suggests in a report by WUSF News that homeowners might consider bundling home and auto insurance, increasing deductibles for a lower rate and asking about available discounts. He noted that a higher deductible can lead to lower premiums, but one will be responsible to pay more out of pocket for a loss, so weigh the pros and cons.

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Market Monitoring for Clients

NEI continues to be diligent about client costs for every single move, monitoring market and economic conditions to ensure the selected insurance provider offers competitive rates for clients who have inventory properties.

For more information, please contact your NEI representative.

The above article is provided for informational purposes only. Please consult your tax, legal, or accounting advisors before making any decisions or transactions.

NEI Service Partner Spotlight - Homebuyers Preferred

This month’s NEI Service Partner Spotlight is on HomeBuyer's Preferred and the ins and outs of radon in your home or rented space. Why is radon important to mitigate? What happens if you don't? Click HERE for the infographic.

NEI Spotlight on Corporate Living

Discover how extended-stays make temporary living easy and seamless for transferees from their full-service residential complexes offering apartment-style accommodations, real-time booking systems, fully-equipped kitchens, spacious layouts, and flexible rental agreements.

Download the infographic here.

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Canada's Relocation Property Rules Eased

On 1 January 2023, the Canadian Government imposed restrictions on non-Canadians from buying residences with the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which prohibited relocating employees from purchasing a home in Canada until certain restrictions were met . We’re happy to provide some recent updates that have amended the situation.

After much lobbying from the Canadian Employee Relocation Council (CERC) and Worldwide ERC, Ahmed Hussen, Canada’s Minister of Housing and Diversity and Inclusion, announced amendments to the law that will help alleviate stress for anyone who is considering moving to Canada.

Updated Amendments

• Non-Canadian employees with a valid work permit who work in Canada for at least 183 days may now purchase a single home.
• The requirements for a non-Canadian investor owning equity in a private Canadian business was increased from 3 percent to 10 percent. Once the equity threshold has been met, these investors will also be able to purchase a home.
• Non-Canadians may now purchase property for development purposes, such as vacant lots, zoned for residential or mixed use.

“These amendments will allow newcomers to put down roots in Canada through home ownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities,” says Hussen.

Unfortunately, non-Canadian relocation management companies (RMCs) are still not able to acquire homes as part of a Guaranteed Buy Out or Buyer Value Option program.

NEI will continue to keep our clients updated with any further developments as they occur.

Passport Processing Woes Persist

The Pandemic may be officially over, but U.S. citizens in need of a passport are facing increased challenges with passport processing times.

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Millions in Backlog

During COVID, there was a government backlog of 1.7 million U.S. passport applications. Today, the U.S. State Department reports “unprecedented” delays in processing documents due to software and staffing issues with some three million applications now backlogged.

Though the Department issued a record 22 million passports in 2022, the weekly volume of applications so far this year is 30 to 40 percent higher than last year with an influx of about 500,000 new passport applications received each week now.

Before COVID, it took about four-to-six weeks to process a passport after receipt. Today, after receiving the application, new estimates for processing and issuing passports are more than three-to-four months. Mailing times can add additional weeks to a month and some people report receiving their passports five months after applying in the traditional manner and even four months after paying for an expedited service.

Further, many countries have "six-month passport rules," where they will not accept entry by travelers whose passports will expire less than six months after the beginning of their trip.

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Prepare Extra Early

In addition to the current backlog, 23 percent of U.S. adults say they plan on traveling internationally this summer – up from 20 percent in 2022. For U.S. citizens planning international travel this year, whether it is personal or business related, if you need a passport preparation should begin well in advance to avoid delay.

Just how far in advance? A minimum of four to six months when using expedited shipping is recommended. Consider the following:

• Applicants should make certain details and supporting documents (like pictures and driver’s license) are 100 percent correct to avoid delays.
• If travel is this October or later, applying the traditional way is likely safe, but your application should be submitted immediately with expedited shipping.  
• If travel is this August or September, one can potentially still get a passport in time, but will need to pay a fee to expedite processing as well as expedited shipping, but there is no guarantee.

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Checking on Passport Status

You can check the status of an in-process application by visiting the U.S. Passport Application Status page. If there is a proven life-or-death emergency or urgent international travel coming up within 14 days, one can try making an in-person appointment at one of 26 passport agencies throughout the U.S., but an appointment to visit an agency is mandatory and the only way to make an appointment is by calling 1-877-487-2778 between 8 a.m. and 10 p.m. ET, Monday through Friday. Spaces are limited and agencies do not accept walk-in services.

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Expediting Agencies

Expediting agencies are companies that assist with rushed passport applications and charge an additional fee on top of the standard passport application fee and expedited passport service fee. The fastest turnaround time is one week for $799 or a two-week option for $599, but even these can be limited in availability since expeditors rely on a subset of appointments being available.

In limited cases, expediting agencies may have extremely limited availability of next day or three day turnaround slots, but these are very few and often attract a much higher management fee from the agency according to EIG, one of NEI’s Visa and Immigration (V&I) service partners. There are various passport expediting agencies that offer these services, with each being allocated a certain number of faster appointments. So, if the agency first approached does not have any available appointments, it is worth checking with an alternative provider directly.

Newland Chase, another V&I service partner, suggested that companies may consider having their frequent business travelers obtain a secondary U.S. passport which would be valid for four years and could be quite helpful if an application is tied up in process and international travel is required.

NEI will continue to provide clients with updated information on this topic and manage relocating employees’ expectations accordingly. If you would like to discuss this passport situation further, please reach out to your NEI representative.

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Navigating Relocation Concerns

Relocating employees often face various challenges and concerns when considering a move. Understanding these common hesitations can help employers better support their employees during the relocation process. Based on data from 2022, we’ve identified the top five reasons why employees are hesitant to accept relocation assignments.

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#5: Undisclosed Personal Reasons

During a relocation, families may have sensitive personal reasons that they hesitate to disclose. As part of our commitment to supporting relocating employees, NEI's Account Executives are trained to observe and listen for subtle cues. By being attentive, we can address specific needs, such as accommodating a newborn with extraordinary medical requirements.

To help employees meet the needs of undisclosed concerns, many companies offer their employees more choice in selecting benefits that best fit their needs by using technology like NEI's iSelect tool or providing a “You” Allowance to access additional funds for needs unique to their situation. These types of actions bring peace of mind to relocating families and ensure smooth transitions.

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#4: Unfamiliarity with the Destination Location

Moving to a new area can be daunting, as families leave behind the comfort of their old home, family, and friends. Studies show that three out of four Americans express regrets after relocating, with acclimating to a new community being a significant stressor.

At NEI, we recognize the importance of personalization and strive to match relocating employees with real estate agents or service partners who understand their situation and can help minimize their concerns. Our city search tool allows your employees to explore their new location and connect with identified essential services, such as information about schools, shopping, parks, or community events.

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#3: Financial Considerations

Financial concerns are a common worry for relocating families. Rising housing costs and fluctuating interest rates pose challenges when purchasing a new home. If they are moving to a higher cost-of-living location, the concerns increase. NEI works closely with relocating families to help them thoroughly understand the available relocation benefits the company is providing to ease financial burdens.

We consult with our clients extensively in developing competitive benefits that lead to greater transferee satisfaction while minimizing corporate expense. Our Client Relations Managers partner with our clients for whatever they need, such as running cost-of-living analyses (COLA), advising them on various ways to support homeowners during challenging real estate markets, or offering significant insights on any topics of concern to aid acceptance rates.

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#2: Health and Safety

In an ever-changing world, health, safety, and security are paramount concerns for relocating families. One way that NEI helps to reassure them of the new location is to collaborate with local real estate agents or destination service partners for an area orientation. Advising them of the various neighborhood nuances and desired amenities is important prior to making any decisions. Obtaining this type of information helps relocating families feel confident they are making good decisions about relocating and where to settle. It prioritizes their sense of well-being so they can settle into their new environment with peace of mind.

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#1: Spousal/Partner Acceptance

The support and acceptance of a spouse or partner significantly influences an employee's decision to accept a relocation assignment. NEI recognizes the importance of spousal acclimation and recommends that companies provide this type of support because one of the top reasons for a failed relocation or assignment is an unhappy spouse or partner.

For example, if the relocating family needs to maintain a dual income household, helping that person acquire a new position can be essential to a successful relocation and a productive employee. Additionally, NEI continues check-ins with relocating families for extended periods, up to six months or longer, if needed, to ensure a smooth transition and address any concerns.

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Conclusion

At NEI, we understand that effectively relocating a family goes beyond finding them a new home. NEI founder, Chairman and former school psychologist, Kate Dodge emphasized, “The significance of supporting and grounding the family is critical during the relocation process. Our commitment to Service Exceeding Expectation means that we go above and beyond to ensure satisfaction from all parties involved.”

By placing proper focus on these top five concerns—undisclosed personal reasons, unfamiliarity with the destination location, financial considerations, health and safety, and spousal acceptance—companies can make each relocation a positive experience.

Should you like to discuss any of these topics further, please contact your NEI Representative.

NEI Service Partner Spotlight - PrimeLending

One of the best things you can do for yourself when you're getting ready to buy a new home is to know how much home you can afford. Read more for a glimpse of the type of trusted advice PrimeLending offers tranferees. Click here for details.

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NEI Global Relocation (NEI) is thrilled to introduce the latest in core-flex technology. Today’s relocating families want to be empowered to select benefits that fit their specific needs. That desire is nothing new, nor is the fact that companies have been using core-flex programs internally for some time now.

What is new is iSelect, our revolutionary design that improves the employee experience with choice and an online tool featuring opportunities to explore their options and various combinations of benefits before deciding what is best for them.

With iSelect, their onboarding experience begins with confirming and updating their information.  From there they are taken to a brief explanation of their core benefits, then quickly advanced to the selection process for their flex benefits. A points calculator is visible to show them how their budget is impacted with each selection.  Once initial selections are complete, your employee can easily coordinate a meeting with their NEI Account Executive through a collaborative calendar.

iSelect makes every relocation a personalized experience and NEI is here to help your relocating families think through their moves, manage the delivery of benefits and answer questions, enabling your employees to stay productive.

The entire process is streamlined, flexible and personalized!

It’s the latest in core-flex technology and we can’t wait to show it to you. Current clients should contact Cindy Beitel, CRP, NEI SVP, Global Client Relations to learn more. If you are not an NEI client, but would like additional information, please reach out to Pam Jacknick, CRP, GMS, NEI SVP Global Client Development.

New Travel Authorization Systems Postponed Again in U.S. and Europe

Enforcement of two new travel authorization systems have been postponed again in the U.S. and Europe:

1. ETIAS (European Travel Information and Authorization System) – until 2024; and
2. REAL ID – until May 2025

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ETIAS Postponement

Europe receives over 37 million visitors each year, so the introduction of ETIAS – similar to the U.S. ESTA program (Electronic System for Travel Authorization registration system) – is expected to have a significant impact on travelers from around the world, including the global mobile workforce.

The roll-out for ETIAS has been planned for years, but the start date has been repeatedly pushed back from 2020, 2022 and 2023, to launch in 2024. There is speculation the new 2024 date could be pushed back further, perhaps after the Summer Olympics in Paris concludes on 10 August 2024.

Once implemented, all visitors who previously travelled visa-free to Europe’s Schengen Zone will be required to register in advance online. For European countries which will be using ETIAS starting 2024, please see click here. To register, individuals will need a passport valid for three months beyond the intended stay, an e-mail account, and a credit or debit card. Passengers will be required to complete an online application form that covers a range of biometric, travel and security related questions. Data will be checked against a variety of European and International databases including no fly lists, to identify potential terrorist and criminal threats who will then be refused entry via the ETIAS program.

When up and running, it is expected most ETIAS applications will take 20 minutes to complete, but time will vary based on additional fields one may need to fill out. Applications may be processed and delivered by e-mail within one hour if no further checks are required, but it could take upwards of 96 hours if additional information’s needed. An application fee will be €7, though travelers under the age of 18 or over the age of 70 will not need to pay a fee.

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REAL ID Postponement

To help improve airline security, Congress passed the REAL ID Act in 2005 and the U.S. Transportation Security Administration and other federal agencies announced they would require REAL ID compliant licenses for people 18 years old and older to fly anywhere within the U.S. starting in May 2023.

However, the Department of Homeland Security announced the deadline would be extended until May 7, 2025 since state motor vehicle departments need more time to process the backlog of applications created by COVID-19 and only about 50 percent of the U.S. population has REAL ID compliant documentation.

Secure REAL ID will “set standards for the issuance of sources of identification, such as driver’s licenses” and will have a star at the top of the license. When enforced in 2025, it will be required for every air traveler 18 or older at airport security checkpoints for domestic travel. Those under 18 must be travelling with an individual who has acceptable documentation.

To get a REAL ID license, a person typically will need to show proof of their full legal name, date of birth, Social Security number, two proofs of residence and lawful status. Lawful status means that the person will need to provide valid documentary evidence that they are lawfully in the United States per Section 202.(c)(2)(B).  

Still, despite REAL ID requirements, other documents may be substituted or used instead when enforcement starts in 2025. These may include U.S. passports, Department of Homeland Security-trusted traveler cards, U.S permanent residence cards, federally recognized tribal-issued photo IDs, and USCIS Employment Authorization Cards.

Costs will be tied to local fees associated with obtaining driver licenses or identification cards. Employers should encourage their employees to determine if their current identification includes the star. If not, it would be good to advise them to obtain the REAL ID designation to avoid unnecessary delays obtaining the necessary documentation for traveling by air by the 7 May 2025 start date.

API Integrations and Relocation - What You Should Know

API integrations for relocation are the future of working faster and more efficiently. As global mobility professionals face growing responsibilities and increasingly complex processes, workflow efficiencies become more important to meet your talent objectives.

That’s where API integrations demonstrate true value. APIs, or Application Programming Interfaces, create communication protocols between business systems, automate workflows and streamline processes within and outside your organization.

Automation drives efficiencies for HR Mobility teams, all who touch your mobility processes, and improves the overall experience of your relocating employees. Automated workflows allow your team members to focus on what is important – securing critical talent and getting them where they are needed as quickly as possible.

It also helps your business scale for future growth by leveraging technology.

UNITE Integration Platform

NEI's UNITE Integration Platform simplifies the integration process to easily connect client and supply chain partners within a highly efficient mobile workforce management system to:

• Seamlessly integrate systems and synchronize data between the client and NEI
• Automate entire business processes, including authorizations, relocation activities, invoicing, compensation, and tax gross-up
• Drive efficiencies and improve the overall experience of your relocating employees through the timely delivery of quality services

While technical staff are needed for API integrations, NEI’s UNITE Integration Platform minimizes the one-time investment to create efficiencies throughout your relocation lifecycle. This investment pays long-term dividends, freeing up time and energy for what matters most - getting the right people in place to unlock new business capabilities for your company.

In Summary

As a full-service global mobility company offering related global compensation and consulting services, NEI Global Relocation (NEI) uses UNITE to unify the entire relocation experience.

Innovation through API integration is a strong focus toward our collaborative approach to provide trustworthy, consultative mobility solutions that make the relocation process work better, so you can achieve your talent agility objectives.

For more information on how UNITE can improve your workflows, please contact  NEI Global Relocation.

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NEI Global Relocation once again makes the HRO Today Baker’s Dozen for Relocation! NEI is one of only two companies to be recognized in the survey for at least 11 of the past 13 years, indicating strong consistency in satisfaction for the services provided to our clients and their relocating employees.

“We are very appreciative of our clients taking the time to participate in this survey,” said Randy Wilson, SCRP, President | CEO, NEI Global Relocation. “Time is precious, especially for today’s global mobility professionals. Our employees work very hard to ensure each relocating family has a positive experience and this type of recognition is important to see given the challenges we have all faced over the past two years.”

The Baker’s Dozen for Relocation is one of two annual industry surveys measuring client satisfaction among global mobility providers, the other one being the Trippel Relocation Managers’ Survey, which provides more overall detail. NEI is also a high performer in that survey, achieving more #1 rankings than any other relocation management company in each of the last three surveys.

NEI Service Partner Spotlight - IOR Global Services

Cultural training is a critical component of preparing for an assignment in a foreign country. Customs and communication styles can vary significantly and raising awareness of those differences can help relocating employees navigate the nuances of a new location.

In the linked infographic, you can see a glimpse of the type of information that is shared when working with one of our service partners, IOR Global Services. Click here for details.

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A Welcome Price Drop

The ocean is a giant “highway” of vessels moving containers of goods across the globe. During the pandemic and until recently there were significant price increases for overseas shipping, but global shipping costs are back down to pre-pandemic levels.

• Shipping a 40-foot container from China to a U.S. west coast port was down 93 percent from its high of $20,600 in September 2021.¹  That’s roughly equal to February 2020. Shipping costs from China to U.S. east coast ports and to Europe have also decreased.

• Other global shipping routes have seen costs fall also: freight charges on Europe-to-U.S. routes dropped from highs of $16,000 to around $3,000.

This is welcome news, but will the trend last for corporate relocation?

NEI Global Relocation has advised clients since the start of the pandemic that companies' global mobility programs should remain prepared and flexible for the unexpected in such uncertain times. Today is no different.

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What 2023 Could Bring

Issues that could threaten lower international shipping costs and fewer delays may include:

• Geo-Political Disruptions: The world has become more economically linked, and any military conflict can force the system to adapt in unpredictable ways including areas declared off-limits to shipping. Russia’s invasion of Ukraine could further disrupt global transport.
• China’s COVID Surge: This threatens to upset 2023 global supply chains again and could increase supply chain volatility. Three major ports across China have already experienced new supply chain delivery problems because of COVID and at the Port of Shanghai, the world’s number one container port, cancellations have increased.²
• Container Shipping Reliability: This will remain volatile in 2023 as a recent report found that global vessel schedule reliability had a 56.6 percent on time record in December – a huge improvement from 30 percent recorded earlier in 2022 – but the average on time was 74 percent in 2018 and 2019.³
• Rising Oil Costs: The shipping industry keeps a close eye on oil prices as fuel costs can correspond to 50 or 60 percent of a ship’s total operating costs, depending on vessel size. When oil prices/demand are on the rise and as China reopens after ending its Zero COVID policy, the shipping industry may pass those higher costs on to customers.
• Labor Shortage / Labor Strikes: Beyond finding moving crews / drivers, the global transportation infrastructure is under regular threat from labor strikes. 2022 saw many strikes at both air and seaports. The chances of new strikes disrupting supply chains in 2023 are high and there is pressure on employers to increase salaries with global inflation.
• West Coast Ports Avoidance: Cargo owners are seeking new supply-chain options and diversifying their port entry locations. Shippers continue to reroute to gulf and east coast ports, away from California, due to higher cost of transporting freight over land, labor disputes with dockworkers, and rail workers' unions causing uncertainty.

Despite these risks, some feel freight volatility and international freight shipping costs may continue to decrease. Dubai-based global logistics company DP World expects global freight rates to drop by a further 15 to 20 percent in 2023.

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Relocation Assistance Risk Considerations

Given the potential risk factors detailed above, what does this mean for client companies and global relocation assistance?  

Foremost, one should remember that:

• Potential rate increases could re-bound in 2023 if the recent, positive circumstances change; and
• Shipments could get delayed or re-routed to other ports, increasing time for one’s expected goods.

Companies need to continue to weigh the impact of potential, quickly changing rate increases and associated incremental costs of delayed shipments (e.g., temporary housing) on their budgets against the increased delays for relocating employees who could have to wait longer than expected for their goods should global supply chain disruptions arise.

If NEI is not managing your international shipments, we recommend:

• Remaining flexible on fluctuating rates due to swiftly changing economic conditions and budgeting for changing international container rates in your cost estimates.
• Working with the best partners to develop processes that include verification of all options, freight costs and that any increases or above average costs are genuine.

To be prepared for shipping costs to be fluid in the year ahead, set expectations with relocating employees and consider alternative policy considerations for shipping household goods internationally, if applicable.

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NEI Guidance and Diligence

NEI continues to be diligent about client costs for every single move. Our Client Relations Managers will work with each client to discuss the most cost-effective international household goods shipping options available and considerations for providing a relocating employee a small allowance towards being without those goods due to a longer transit.

To proactively discuss various options with our clients that may assist them in reducing or avoiding costs, NEI constantly monitors market and economic conditions so talent goals can be met.

For more information on this situation going forward, please reach out to your NEI representative.

Sources: 1) Freightos; 2) SCNBC; 3) Sea-Intelligence’s “Global Liner Performance” Report.

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