Cost Containment Initiatives Impairing Recruitment Efforts
At the peak of the recession in 2011, companies were focused on cost containment efforts, which in some cases, are now preventing them from obtaining the right talent. The talent shortage we experienced prior to the economic crisis is surfacing again. The 2014 Atlas Corporate Relocation Survey validates this trend and indicates that the use of these cost containment measures decreased from 70% in 2011 to 54% now.
Shift in Top Reason for Declining a Relocation Opportunity
Over the last several years the top reason that employees declined offers to relocate were connected to the employees’ housing and mortgage concerns—mainly around the losses they would suffer if they sold their homes.
Although some areas of the country continue to experience depressed housing values, the majority of employees are now indicating family issues/ties as the number one reason they are declining a relocation opportunity. When family concerns are paramount, additional personal attention and increased services are typically the answer.
More Renters Then Homeowners
U.S. Domestic home ownership is at its lowest rate in almost 20 years at 64.3% of households vs. the peak of 69.4% in 2004. Renters have become the dominant housing group.
This impacts global mobility on three major levels related to program costs: 1) it changes the pricing dynamic for relocation management companies to provide services at reduced fees because there are fewer referral fees captured to offset program costs, 2) it increases the demand for available rental properties, thereby driving up rental costs and 3) it places companies in a position to have to pay for additional services to renters.
Compliance and Mitigating Risks
Each country establishes its own set of rules and regulations covering immigration, work permits, tax reporting, data security, etc.—and those rules change frequently. Navigating the complexities of these changes continues to be challenging and if not followed closely, can result in severe penalties, such as hefty fines or expelling an employee and/or company from the country.
Additionally, companies need to carefully consider how immigration regulations impact the timing of relocating employees around the world. For instance, to enter Finland, you have to arrange an appointment with the local police department and in many of the major cities, those appointments are already booked two to three months out.
As the shift from Boomers to Millennials continues, we are seeing a less rooted workforce which could be a double edged sword. While Millennials want to be globally mobile, retention efforts may become the evolving issue requiring companies to shift benefits from trying to convince individuals to accept a relocation to providing them with benefits to keep them grounded where the company needs them.
Some companies have started to provide new home closing costs benefits to renters in an effort to help them establish roots.
Those companies who continue to expand globally are moving from the BRICs (Brazil, Russia, India and China) into the new and emerging markets of the MINTs (Mexico, Indonesia, Nigeria and Turkey).
These regions of the world are seen as the next high-profile areas for market penetration of global services and products. No matter where new expansion efforts take companies, they continue to look for competent insight and support.
Security, redundancy, disaster recovery and business continuity are all forefront issues related to technology in the relocation industry. Add to that the desire for self-service tools that put program details, stats, projections, cost estimates, accruals, exception management, load tracking and a hundred other items at the client and relocating families’ fingertips and you can see how technology is evolving and becoming more important.
Although there is an increased desire for these self-service tools, there is still an overwhelming need for that personalized assistance—supported by technology.