2. 1
During the 8th annual Relocation Policy Summit, that was hosted by
Graebel University at the Graebel world headquarters in Colorado,
magic happened. Powerful energy among the 92 attending human
resource and relocation management executives with more than
530 years of combined global mobility experience brought forth
industry best practices and break-through ideas that many plan
to enact in the coming year.
Throughout the content-rich, two and half-day stretch to
discuss all things mobility, the Summit was kicked off with
three optional workshops:
1. Global Tax
2. Relocation Policy Development
3. Relocation 101
77-percent of Policy Summit participants attended one of these
hands-on workshops which provided the opportunity to dig deep
into their area of choice.
The remaining two days were filled with sessions that were
identified by participants and segmented into U.S. Domestic,
International and Universal global mobility topics. In advance of
the Summit, attendees selected their most desirable mobility topics
to ensure the maximum takeaway value of the event.
Five executives from the Fortune 500 offered their guidance as
moderators of U.S. Domestic and International mobility sessions.
In addition to their human resource background, the guest
moderators averaged nine years of global mobility industry
experience. Because the Summit is driven on all fronts by
participants, this approach offered a unique perspective and flair
in which their peers could easily relate.
To further leverage their time in Colorado, some global mobility
clients elected to take advantage of their trip to Denver and met
with their Graebel team to conduct client business reviews prior to
or after the Summit.
Since its inception eight years ago, a principal goal of the Policy
Summit has been to create an open environment where human
resource professionals can gather, share and create innovative
ideas. All came to the event with a mobility program wish-list of
items to address and departed with answers and guidance from
industry peers to help move their programs in a forward motion.
This <XX-page> digest of the Summit offers the hottest topics and
solutions from the lively discussions, vibrant keynote speakers and
networking events that took place.
Introduction
APAC and EMEA Graebel University hosted
Mobility Summits are planned in 2014
3. 2
Professionals from a wide array of diverse
industries collaborated during the Policy
Summit. From new-to-relocation to
seasoned veterans, the blend represented
22 different industries which made for
thought-provoking discussions during the
breakout and educational sessions. Nearly
half of the companies represented the
Fortune 1000 and one-third, the Fortune 500.
2014 Summit attendees are eligible to earn:
11 General credit hours for re-certifications
through the HR Certification Institute:
> Professional in Human Resources®
(PHR)
> Senior Professional in Human Resources®
(SPHR)
> Global Professional in Human Resources®
(GPHR)
Up to 18 re-certification credits for Worldwide
Employee Relocation Council®
(WERC) credentials:
> 9 Certified Relocation Professional®
(CRP) credits
> 9 Global Mobility Specialist®
(GMS) credits
36,266 Company average number
of employees worldwide
FORTUNE
250
34%
15%
46%
Summit Participant Backdrop
92 Total attendees
61 Organizations
-
6.3 Average years in global mobility
530 Combined years in relocation industry
$14.9 Billion average annual company revenue
Financial
Manufacturing
Healthcare
Retail
Energy, Oil & Gas
Hospitality
Consumer Goods
Technology/Software
Engineering
Professional Services
Communications
Insurance
Freight Services
Automotive
Non-profit
Agriculture
Utilities
Pharmaceutical
Aerospace
Construction
Mining
Education
Top 7Big Data Trends
1. The cloud
Reduced IT and infrastructure costs
2. Mobile apps
Increasingly competitive to
access meaningful data
3. The infinite aisle
Online purchasing and
inventory management
4. Security and privacy
Securing data in AND out of systems
(i.e. immigration)
5. Mergers and acquisitions
27,000 M&As took place in 2013,
complex to merge data/systems
6. Digital natives
Millennial generation’s obsession
with digital devices
7. Rise of the machines
Imbedding technology needs
(i.e. Amazon Drones)
Industries RepresentedSummit Participant Backdrop
4. 3
Global Mobility Staffing
Staffing the most effective number of people
to support each company’s mobility volume
was noted as a figure that has been hard to
nail down historically. For those represented
at the Summit, volume varied from less than
20 and up to 1,700 annual moves per year.
Companies in attendance average 365 U.S.
Domestic and 54 international assignments
annually and reported their overall staffing
situations in a survey conducted onsite.
Average Mobility Staffing
2.6 Full-time
4.6 Part-time
Leading Discoveries
Exception Requests
DownException requests have dropped
for most and there is evidence that
this drop resulted from strengthened
approval process steps, including
instituting stronger policy language
and enhanced internal communications
within a company.
24-MonthPayback Agreement
Most Common
Payback agreements are used by
the majority and the most utilized
time-frame was 24-months. Only a
few engage in an active collection
process to recoup funds.
Can Return on Investment
(ROI) legitimately be
Measured
All agree that it is difficult to track
and measure ROI for global mobility.
Creative solutions were identified
-and discussed in detail.
Top ROI Measurements
• Turnover rates
• Employee
satisfaction results
• Successful project or
assignment completion
• Performance review scores
• Promotion rates
Locations Most Deliberated
Africa
Canada
China
France
Germany
India
Japan
U.S.
Rise in
2014 Volume
66% U.S. Domestic
54% Rest of the World
Executive Summary
Annual Global Mobility
Volume on the Increase
More Fortune 500 employees will
be asked to relocate or take an
assignment worldwide in 2014.
5. 4
66%
Preference
105%
Most common
home listing cap
.
Contributing Causes for
Recent Changes Made to
U.S. Domestic Policies
• Increases in Exceptions
• Company budget restraints, cost
containment and relocation costs
• To improve transferees’
relocation experience
• Company growth through footprint
expansion, acquisition, merger
• Shift in company culture
Workforce
Security
Security measures and
protecting workforce
health was top of
mind for most mobility
professionals, and
among the extreme
measures enforced
in high-risk locations
such as Afghanistan,
Africa and Brazil.
Trending
International
Policies
Expat-Lite
Local Plus
Rotational
(AKA Backpack policy)
Return of
Foreign Nationals
Discussions revealed
that a select number of
mobility executives have
taken steps to create
specific policies that
will address the return
of foreign nationals from
these locations:
China
India
Japan
Localization
36 vs.
Historic
60 Months
A sliding scale
approach to localizing
expats has been
paralleled with a
timeframe that has
shifted from
3 to 5 years
since 2013.
Home Leave
Most allow
assignees to travel
anywhere for their home
leave, however creative
ways have surfaced
to incentivize
expatriates otherwise.
U.S. Domestic
Topics to Note
Costly and tight rental market
coast-to-coast, plus finding
suitable rental properties for
families was acknowledged
as an added difficultly among
the 2014 Summit participants.
Focus on the Rest of the World
Buyer Value
Option (BVO)
leading home
sale program
Some have been
forced to build
or buy temporary
living units in rural
counties in states
such as Colorado,
Texas and Wyoming
Exception overall
identified as
temporary living
#1
6. 5
WEF Global Leaders’ Segment Mix
The Summit attendees were treated
to a dynamic presentation featuring
Carol C. McMullen, chief innovation officer
for the Crossland Group, presented an
overview of the World Economic Forum
(WEF) that took place in Davos, Switzerland
in January.
At the annual WEF participants gather and
discuss global issues and discover what
matters most to the world for the coming
year. McMullen was among the 2,500 global
leaders and dignitaries invited to the Forum.
In her keynote address at the Policy Summit,
McMullen presented the primary topics and
her biggest takeaways from the Forum.
Because McMullen identified the U.S.
economy as the key driver for what is
happening around the world, her presentation
focused on the country’s role within the
shifting world. McMullen also opened the
audiences’ minds about the centuries’ old
and present day conflicts between China and
Japan; the Middle East tension and the critical
state of worldwide data security.
Continuing State of the U.S. Economy
Business 80%
Government 11%
Academia 7%
NGO/non-profit 2%
Top 10 Global Issues for 2014
Identified at the WEF
1. Rising Social Tensions in the
Middle East and North Africa
2. Widening Income Disparity
3. Structural Unemployment
4. Cyber Threats
5. Inaction on Climate Change
6. Diminishing Confidence in
Economic Policies
7. Lack of Values in Leadership
8. Expanding Middle Class in Asia
9. Growing Importance of Megacities
10. Rapid Spread of Misinformation Online
Unemployment rate dropping
Workforce productivity rising at
5% vs. world average of 3.5%
Consumer debt is below levels in 1983
Cash on corporate balance sheets is
stockpiling and needs to be deployed
in order to grow the economy
Fewer worldwide large scale mergers
and acquisitions due to waning
U.S. economic power
U.S. expected to have little reliance
for crude oil from Saudi Arabia
per year
7. 6
U.S. Manufacturing on the Horizon
With 22-percent of the 2014 Graebel Summit attendees
representing the manufacturing sector, McMullen pointed
out that industry is expanding significantly within the U.S.
and wages have increased 4-percent since 2006-2011. The
U.S. is on pace to have lower manufacturing costs than
both Europe and Japan by 2015. Many manufacturing jobs
that were previously sent offshore are slated to return
to the U.S. in 2014 and 20,000 new jobs are expected to
surface nationwide.
Additional relevant information was shared in a
comprehensive thought leadership hand-out to
participants. Next shares a few of these documents::
Africa Transforming Technology in 2014
Latin America: Transforming the Future of Technology
Will Africa be the Next Hotspot for Business?
Offshoring? Reshoring? Nearshoring?
The very scope of manufacturing is mounting with the
growth of digital technology, which is causing increasing
difficulty for companies to find and hire talent in this
competitive arena. Plus, with the digital technology
increase, cyber-threats have targeted manufacturers
making their industry the highest hit sector at 19-percent.
It was no surprise that Summit executives actively sought
out McMullen for the best approach to create the most
attractive, competitive global mobility program in lieu of
the WEF forecast for employment increases.
Outlook on Mobility
and Talent Management
McMullen outlined her stance on
what was relevant to the world
and talent management:
70% of newly appointed CEOs come
from internal appointments
25% of which worked for the respective
company for their entire career
-Devote career paths and extra care
for these potential leaders
Respect talent and labor
-Value employees, diversify
-Offer career paths, apprenticeships
Differentiate suppliers who are truly
global versus a U.S. company that has
gone international
Trust and partner with companies that
act with a fiduciary responsibility to set
an ethical, trustworthy standard
Institute a conscious data strategy
-People are moving away from jobs
that can be replaced by apps
continued:
8. 7
HR Big Data – Fact, Fiction, or Simply Hype?
Keynote speaker Brad Cook, global vice president of talent
acquisition at Informatica shared his experience with the Summit
group about big data and its rapidly increasing role within nearly
all industries and specifically the human resource landscape.
A key takeaway from the insightful keynote address was the
realization of how big data is being utilized now around the
world and its current trends.
Cook noted that every industry has the opportunity to leverage
data to sell products and services and even more valuable, to
hone in on business intelligence that can be aggregated to a
single view.
The Summit audience identified two functions that would be
beneficial to leverage big data in the mobility space:
Business travel and immigration
Skillsets and resumes
Based on Cook’s experience with big data, he has found that
under the human resource umbrella, talent acquisition is where
the most value can be realized by an organization.
Cook’s DIY recipe for talent acquisition big data:
Map processes
Standardize protocol
Add social data
A comprehensive thought leadership hand-out was also provided
to participants and next shares a few of the these documents.
What is Big Data?
Big data has been
defined a number
of ways and its
definition changes
according to who you
ask. In general, Big
data is a collection of
data from traditional
and digital sources
inside and outside
of your company that
represents a source
for ongoing discovery
and analysis.1
According to Cook,
big data is about
complexity and
incorporates three
types of companies:
Big data storage
Big data consumers
Big data platforms
(integration)
1
Lisa Arthur. What is Big Data?
Forbes, August 15, 2013
Top 7Big Data Trends
1. The cloud
Reduced IT and infrastructure costs
2. Mobile apps
Increasingly competitive to
access meaningful data
3. The infinite aisle
Online purchasing and
inventory management
4. Security and privacy
Securing data in AND out of systems
(i.e. immigration)
5. Mergers and acquisitions
27,000 MAs took place in 2013,
complex to merge data/systems
6. Digital natives
Millennial generation’s obsession
with digital devices
7. Rise of the machines
Imbedding technology needs
(i.e. Amazon Drones)
Top Big Data Trends
Segment data
Build intelligence
Target geographic shifts
1. The cloud
Reduced IT, infrastructure costs
2. Mobile apps
Increasingly competitive to
access meaningful data
3. The infinite aisle
Online purchase,
inventory management
4. Security and privacy
Securing data in AND out of
systems (i.e. immigration)
5. Mergers and acquisitions
27,000 MAs took place in 2013,
complex to merge data/systems
6. Digital natives
Millennial generation’s
obsession with digital devices
7. Rise of the machines
Embedding technology needs
(i.e. Amazon Drones)
9. 8
Over a third of the Policy Summit attendees move
more than 50 employees within the U.S. each year,
and among all companies’ the volume ranged from
less than 20 to more than 1,700.
Annual U.S. Domestic Volume
When reflecting on 2013, many people made
changes to their U.S. Domestic programs in
a variety of facets.
The top drivers for policy updates:
Increase in Exceptions
Company budget restraints, cost
containment and relocation costs
Improve transferee’s
relocation experience
Company growth
Shift in company culture
U.S. DOMESTIC
Chart A:
Annual U.S. Domestic Volume
Homeowner
Under 20 20%
20-50 28%
50+ 36%
Renter
Under 20 18%
20-50 20%
50+ 18%
100+ 30%
U.S. Domestic Lump Sum
Annual Volume
Under 20 24%
20-50 22%
50+ 8%
100+ 20%
Chart B:
Annual International Volume
Long-Term Assignment (LTA)
5-20 34%
20-40 6%
40+ 20%
Short-Term Assignment (STA)
5-20 30%
20-40 2%
40+ 14%
Permanent Transfer
5-20 38%
20-40 4%
40+ 12%
Chart C:
Home Sale Programs
Buyer Value Option (BVO) 66%
Guaranteed Buyout (GBO) 19%
Direct Reimbursement (DR) 34%
Listing Price
Capped Percentages
2014
2014
2013
2009
12%
8%
4%
40%
103% 104% 105%102%
29%
15%
365
Average U.S.
Domestic annual
volume of
participants
A glimmer of a positive economic outlook
for the year ahead was solidified by
66% of Summit participants
anticipating an increase
in their U.S. Domestic volumes for 2014.
10. 9
Nationwide Cost Saving Tactics
Because cost was a major deciding factor that altered mobility programs, several
successful suggestions were shared during the U.S. domestic breakout sessions:
Set the Tone
Educating recruiters, candidates and business managers will help set
expectations and this may reduce exceptions
Core-flex programs have helped some companies balance their core
budgets and increase employees’ satisfaction by offering optional benefits
within an allotted amount
Cap, Cap and Cap
Cap overall relocation costs based on employee level
Cap home sale benefits and cap home listing percentage to the most likely
sales price (MLSP) from the Broker’s Market Analysis (BMA)
Cap Loss-on-sale (LOS) amount
Cap household goods amount
Cap gross-up on relocation expenses (some use a flat rate of 27% or 35%)
Money Talks
Offer a marketing allowance for home repairs and staging
Provide a home sale incentive which may prevent inventory costs
Incent with cash to rent versus buy at destination
Take Control
Manage the mobility budget within the HR department versus allowing
business units the freedom
When relocation exceeds budgeted amount, increase accrual
Implement Buyer Value Option (BVO) home sale program to greatly reduce
gross-up costs
Running a Cost-of-Living Analysis (COLA) helps some companies identify
eligibility for stipends by assessing the difference in costs between the old
and new locations in their entirety versus focusing solely on housing costs
Participant Cost Savings Successes
One high-volume company recently experienced a
major organizational restructure and this resulted in
a major overhaul of its mobility program. The biggest
cost-saving change was shifting the household goods
management from a third party supplier to directly
booking its business with the carrier. The company
has calculated a potential savings of $2Million of their
$30Million annual relocation budget.
Another company faced attention on regional talent
recruitment and allowing only regional-based versus
cross country moves to save money. For example, this
firm will allow a move from Florida to New Orleans,
but not one from Florida to Washington state. The
participant posed this question to the group: “Do we
really need to find talent 3,000 miles away or can we
find someone within the region?”
One organization has been facing a serious talent
gap and identified new competencies and determined
which roles are required to be mobile. Its study led to
implementation of a new parameter, and the company
has seen a significant reduction in costs due to a
fewer number of people who are actually relocated.
For the marathon transferees, this company only helps
with a LOS benefits once.
U.S. DOMESTIC
11. 10
To Move or Not to Move…
How are Pre-Decision Programs Administered?
A third of the Summit executives incorporate a pre-decision
program into their mobility models. Several successful
methods were discussed that have helped transferees to
determine if a relocation will suit their situation:
Pre-departure home appraisals – helps with the
home value reality check
Home purchase pre-qualification
Outline important relocation implications on intranet
Pre-move trip
Counselling to understand benefits, parameters –
either by relocation management company or employer
Self-assessment survey
Home Sale Programs
With the U.S. real estate market ticking upward in many cities coast-to-
coast, some markets are still struggling and therefore adjusting home sale
programs was a mainstream topic.
The Buyer Value Option (BVO) tops the chart for the sixth straight year at
the Summit with 66-percent utilizing this mode in 2014. In the past few years,
many have been slowly backing away from the Guaranteed Buyout option
(GBO) and on the rise is the Direct Reimbursement.
Top of the List…Listing Caps
Capping the home listing price at a
pre-specified percentage above the
Broker’s Market Analysis (BMA) price
has undeniably increased since the Great Recession.
Results show that 60-percent of Summit executives
offer a listing cap, up nine-percent from just last year.
105-percent above list price owned the scene with
40-percent enforcing this ratio which is a whopping
45-percent increase since 2009.
30%
Employ a
pre-decision
program
60%
Enforce
a listing
price cap
U.S. DOMESTIC
lume
Chart B:
Annual International Volume
Long-Term Assignment (LTA)
5-20 34%
20-40 6%
40+ 20%
Short-Term Assignment (STA)
5-20 30%
20-40 2%
40+ 14%
Permanent Transfer
5-20 38%
20-40 4%
40+ 12%
Chart C:
Home Sale Programs
Buyer Value Option (BVO) 66%
Guaranteed Buyout (GBO) 19%
Direct Reimbursement (DR) 34%
Listing Price
Capped Percentages
2014
2014
2013
2009
12%
8%
4%
40%
103% 104% 105%102%
29%
15%
Chart A:
Annual U.S. Domestic Volume
Homeowner
Under 20 20%
20-50 28%
50+ 36%
Renter
Under 20 18%
20-50 20%
50+ 18%
100+ 30%
U.S. Domestic Lump Sum
Annual Volume
Under 20 24%
20-50 22%
50+ 8%
100+ 20%
Chart B:
Annual International Volume
Long-Term Assignment (LTA)
5-20 34%
20-40 6%
40+ 20%
Short-Term Assignment (STA)
5-20 30%
20-40 2%
40+ 14%
Permanent Transfer
5-20 38%
20-40 4%
40+ 12%
Chart C:
Home Sale Programs
Listing Price
Capped Percentages
2014
2014
2013
2009
12%
8%
4%
40%
103% 104% 105%102%
29%
15%
12. 11
Housing Double-Dip
Adopting a duplicate housing benefit
was popular among the vast majority. The
consensus was that this allowance has
decreased the need to drum up creative
home sale programs in lieu of the under-
performing housing market.
Pssst, Loss-on-Sale (LOS) Anyone?
While 38-percent have LOS formally outlined
in policy, a large number offer this expensive
option on a case-by-case basis.
Some agreed that when the LOS is offered,
a good best practice is to outline the added
benefit in the offer letter as it is a document
that can be audited. For a large percentage
that have LOS in their policies, it was added in
only the last few years to reduce the amount of
exceptions for this subsidy.
According to the Graebel-sponsored
Worldwide Employee Relocation Council
(WERC)®
2013 Relocation Assistance: U.S.
Domestic Transferred Employee Report,
nearly 60-percent of respondents report
that their companies reimburse duplicate
housing expenses in instances when the
employee purchases a home in the new
location prior to selling the home in the
old location. Most organizations impose
a time limit on the assistance.
Average costs for duplicate housing
dropped from $3,742 in 2012 to $4,019
in 2013 according to the Worldwide
Employee Relocation Council (WERC)®
2013 U.S. Transfer Volume Cost Survey.
U.S. DOMESTIC
38%
Have formal LOS in policy
up 2% from 2011
Top topics in 2014
Capping household goods
costs is trending and many
continue to cap shipment
weight. Some suggested
adding policy language that
defines ‘reasonable’
household goods items
Home Purchase
Home Sale
Even Deal?
Some debated the idea that the playing field
is leveled, when balancing the amount of loss
experienced on a home sale in relationship to a
lower cost home or when the employee buys a
home that is under market price.
13. 12
THE Exception to the Rule – Temporary Living
Temporary living arrangements and the increasing number of
excuses to extend stays led this benefit to top the exception
charts for most.
Best practices to move families and engage the employee as soon as possible
were deliberated:
Only release sign-on bonus or miscellaneous expense allowance after the
family has moved
- Some have found that a candidate may accept an offer and relocation
package then choose to keep their family at origin, while the transferee stays
in temporary living as long as possible to ‘test the waters’ (i.e. company
culture, right position, etc.)
Enforce a 12-month timeframe for the employee and family to fully transition
Allow one trip home per month while in temporary living, per month
Pay for a nannie to care for the children of c-suite employees
Suggestions for meal provisions while in temporary living:
Do not include when housing has kitchen
Impose a per diem
Reimburse on actual costs for breakfast and dinner only, lunch on own
#1 Exception
temporary living
The Morphing Renter Population
No doubt, the rental market is tight and tense
from Florida to the San Francisco Bay Area
and most cities in between. Finding affordable
rental properties or even rental options at
all has been a huge challenge for most. The
group openly admitted that the days of finding
rentals for single transferees are over and
finding suitable rentals for large families has
added to the obstacle.
For one energy company headquartered in
California, rental prices have been sky-high
and scarce. To fill the void, the company has
communicated internally to seek roommate
options and available rental properties.
The company’s culture lends itself to a high
number of people renting spare bedrooms to
their colleagues. Plus, because of the high-
cost location, a cost-of-living allowance
(COLA) is offered to its renters.
These trends were captured during the
Summit discussions:
Two month lease break
assistance benefit versus rental
finding assistance
Homeowners request to rent
prior to purchase
Not presenting home purchase
assistance in the new location
to renters
U.S. DOMESTIC
The lack of temporary living in rural communities has forced some human
resource professionals to become creative and take extreme action in order
to accommodate their transferees. The only option for most was to either
buy properties or build new properties (condos, homes) and hire a property
management company to manage.
14. 13
One Lump or Two or Three?
Lump Sum Program Variance
While 54-percent offer a lump sum policy within their respective
company’s U.S. Domestic program, the majority expressed concern
that a lump sum only program was not sufficient. Most shared that a
monitored, more robust program has a higher success rate. For the
individuals who do offer a lump sum only program, cost control and
easing the administrative burden were cited as the top two reasons
to embrace this one-size-fits-all approach.
Lump sum amounts varied widely from company to company, and
benefits were typically tiered and ranged from $5,000 to $45,000.
There was very little similarity of when funds were released to
transferees, but one best practice was unanimously defined: Paying
out as close to the start date as possible provided the least amount
of risk to the company:
Lump sum amounts that were provided as a part of a core-flex
program or within policy varied greatly too, here however most
included household goods, a home finding trip and temporary
living respectively.
A few allow their relocated employees the alternative to select
specific benefits in lieu of a lump sum.
One Fortune 500 company prefers to provide its employees a budget
and permits them to manage a select portion of benefits on their
own. This company offers a lump sum tier. Other tiers include
benefits plus a $5,000 miscellaneous allowance to cover incidentals
or “hush money” to quiet exceptions. A lump sum is also provided
for the final trip for the entire family and the house hunting trip
which is calculated by Runzheimer.
Flexing Core-Flex
Many were intrigued, but only a few in the group conduct a
U.S. Domestic core-flex program which was recognized to offer
options to some and, especially the millennial generation. Some
who utilize this method take advantage of online tools in which
their transferees can select optional benefits within their allotted
amounts that best meet their circumstances.
U.S. DOMESTIC
Chart A:
Annual U.S. Domestic Volume
Homeowner
Under 20 20%
20-50 28%
50+ 36%
Renter
Under 20 18%
20-50 20%
50+ 18%
100+ 30%
U.S. Domestic Lump Sum
Annual Volume
Under 20 24%
20-50 22%
50+ 8%
100+ 20%
Chart B:
Annual International Volume
Long-Term Assignment (LTA)
5-20 34%
20-40 6%
40+ 20%
Short-Term Assignment (STA)
5-20 30%
20-40 2%
40+ 14%
Permanent Transfer
5-20 38%
20-40 4%
40+ 12%
Chart C:
Home Sale Programs
Buyer Value Option (BVO) 66%
Guaranteed Buyout (GBO) 19%
Direct Reimbursement (DR) 34%
Listing Price
Capped Percentages
2014
2014
2013
2009
12%
8%
4%
40%
103% 104% 105%102%
29%
15%
Two weeks prior to start date
Before or after background
check complete
Start date
On payroll for two days
Top topics in 2014
Capping household goods
costs is trending and many
continue to cap shipment
weight. Some suggested
adding policy language that
defines ‘reasonable’
household goods items
$100,000 Valuation was
common among the group
Pre-made boxes are
acceptable versus crates
for flat screen TVs
Discard and donate
Home Purchase
Home Sale
15. 14
Gross-Up
Summit conversations revealed that most employees do not worry about relocation
taxes until Uncle Sam or foreign country’s tax deadlines roll around. Many receive
numerous questions regarding taxes and the topics of gross-up and true-up tend to
surface from their employees, and in the eleventh hour.
For one publicly-held company, its executives’ relocations are audited by people
unfamiliar with the relocation industry which creates a constant need to explain
items like grossing-up gross-ups.
The group chatted about best practice suggestions:
Add methodology (i.e. flat supplemental rate) into policy to reduce the
number of questions. If preferable not to add to policy, create an amendment
to policy that can be shared on demand when questions arise
Gross-up only the necessary benefits i.e., temporary living, house hunting
trips. Do not gross-up bonuses or miscellaneous expense allowances.
Do not gross-up if transferee does not follow policy parameters
Do not gross-up an exception granted outside of policy
Supplemental rate gross-up calculation is the most common
Peek into a Fortune 500 company’s gross-up strategy:
Gross-up at a flat supplemental rate of 25-percent
- 90-percent of employees have received a windfall
Case-by-case true-up
- Majority are higher tax bracket executives,
and only 3-4 exceptions per year
U.S. DOMESTIC
The Goods on Household Goods
Household goods exception noise has quieted in
recent times, many in the Summit expressed very
few recent exception instances.
Top topics in 2014
Capping household goods
costs is trending and many
continue to cap shipment
weight. Some suggested
adding policy language that
defines ‘reasonable’
household goods items
$100,000 Valuation was
common among the group
Pre-made boxes are
acceptable versus crates
for flat screen TVs
Discard and donate
programs
Two weeks prior to start date
Before or after background
check complete
Start date
On payroll for two days
Top topic
Capping ho
costs is tre
continue t
weight. So
adding po
defines ‘re
household
$100,000 V
common
Pre-made
acceptab
for flat s
Discard
Home Purchase
Home Sale
16. 15
UNIVERSAL
and the list goes on and on…
UNIVERSAL MOBILITY TOPICS
To remain current and competitive, many
essential elements should be identified,
considered and ultimately implemented in
order to run a successful mobility program.
These elements weigh on the minds of the
Summit attending executives and mobility
professionals alike constantly.
This section touches on the most prevalent
universal mobility items shared by peers in
the intimate sessions.
StaffingProperly
Training
Polices
Compliance
Escalations
Volume
Projections
Budget
Managing
Suppliers
Reporting
17. 16
A high-concentration was placed on working with
talent management and other stakeholders within
the participants’ respective organizations. The fusion
and cooperation (or lack thereof) of such a variety of
departments was top-of-mind for many.
Many expressed concern about incorporating talent acquisition/talent management
with mobility. Emphasis was placed on the importance of having mobility
represented ‘at the table’ with the business in early stages of strategic planning
so that aspects like cost, logistics, tax, and compliance could all be considered
thoughtfully when companies plan for a talent strategy.
For instance, a company that operates globally, but mainly in the APAC region had
expansion plans for a division that projected talent growth by 20-percent. Because
the mobility manager was present in the strategic leadership meetings, she was
able to provide expert advice to decision makers about costs and compliance
issues, therefore changing the tactic from strictly growing talent (promoting
from within and relocating individuals) to hiring local talent to fill necessary and
applicable positions.
Communication and Education – By All Means Necessary
Working across different groups within a company can be difficult. The Summit
assembly agreed that communicating in various ways and properly educating is the
golden nugget to getting buy-in and cooperation.
Communication best practices:
Use a hub and spoke model by designating
a point person in each group (including HR)
Hold regular meetings
– monthly, quarterly
Conduct annual review meetings to update
on changes in policy, culture, processes, etc.
Provide meaningful information to key
stakeholders with metrics, reports
UNIVERSAL
Overall, with an annual average of
2.6 Full-time 4.6 Part-time
internal employees support
each company’s relocation volume
40% International volume
52% U.S. Domestic volume
365
U.S. Domestic
Moves
54
International
Assignments
Representatives’ and their teams’
time was dedicated to
$50,000
Standard
Employment
Population
Relocation or
Assignment
Population
Termination Rate Comparison
Callout/infographic Julie, please use an
icon or image of Canada and design an inter-
esting QA type infographic that shows the
group asking questions of this person amid
the group.
India
Africa
GermanyCanada France
Japan
Who Does What, Why and How?
Staffing a global mobility team can be tricky. For many people,
relocation is not their sole responsibility. Participants were
polled and with an 86-percent response rate, results revealed
their company’s mobility staffing structure.
Stay Tuned! A special report outlining the results of
the extensive survey taken during the Summit will
reveal details about corporate global mobility roles and
responsibilities. Results will be further broken down
on how much time is allocated to specific mobility
responsibilities based on volume levels so that companies
can benchmark how their peers compare in this arena.
Have a global talent
management practice
that includes relocation
36%
18. 17
Participant Examples
One participating person recently took on ROI
assessments and researched the termination rates
of employees that had already relocated or taken
assignments versus the Company’s remaining
employment population and found that the termination
rate for the relocation/assignment cluster was higher.
A participant representing
a Fortune 500 company
recently hired an external firm
to track and report ROI.
Cost Estimate Data Extraction
Most company representatives relayed that cost estimates have been performed
upfront on most relocations. One company in particular has been rigorous about cost
estimate reporting and analysis in order to keep average employee relocation costs
current and competitive. With the help of their relocation management company, this
person tracks and reports on:
Employee level
Policy type
Homeowner or renter status
Some have shared cumulative cost estimate data results with business units for
budget planning purposes. When sharing this data however, the group stressed the
importance of reiterating that the data provided is not a cap of relocation expenses,
but merely an estimate.
UNIVERSAL
Overall, with an annual average of
2.6 Full-time 4.6 Part-time
internal employees support
each company’s relocation volume
40% International volume
52% U.S. Domestic volume
365
U.S. Domestic
Moves
54
International
Assignments
Representatives’ and their teams’
time was dedicated to
How long employee stayed
with the company
If employee was promoted
Performance review results
$50,000
Standard
Employment
Population
Relocation or
Assignment
Population
Termination Rate Comparison
ico
es
gro
the
France U.S. Germany
Can
each company’s relocation volume
40% International volume
52% U.S. Domestic volume
Representatives’ and their teams’
time was dedicated to
How long employee stayed
with the company
If employee was promoted
Performance review results
$50,000
Standard
Employment
Population
Relocation or
Assignment
Population
France U.S. Germ
Return on Investment (ROI)
Because ROI can be subjective
in mobility, many find it difficult
to measure and report. Attendees
discussed ways that they have
successfully measured ROI within
their companies:
Turnover rates (one company
shared its 32-34-percent
employee turnover with a
rehire rate of 18-percent)
Employee satisfaction results
Successful project or
assignment completion
Performance review scores
Promotion rates
Many had reporting wish-lists and
33-percent of respondents in one
Universal Mobility session stated
that they would personally run
ROI reports, if available, and the
remaining 67-percent would request
the data from the provider on a
regular schedule.
19. 18
Accepting or Rejecting Exceptions
The vast majority of the Summit crowd experienced a decrease in
exception requests and the top three reasons were attributed to:
1. Consistency with the approval process
2. Stronger policy language which deterred exceptions
3. Communication outlining policy and expectations upfront to:
- Human resources - Recruiting
- Business unit management - Transferee
For international assignments, school and tuition assistance topped
assignee exception requests.
Nearly all agreed that executives are granted immunity for
most exceptions.
Extreme Executive Exception
In one case, a company’s executive did not observe any of the rules
of the relocation program and the company moved an airplane that
cost the company $50,000.
Many Summit-goers have experienced outrageous
exception requests.
A participant mentioned that an employee requested weekly maid
service (the company does not allow maid service in temporary
living). The request was denied and the participant recommended
that the employee use the miscellaneous expense allowance for
that type of request.
Another representative had enough when the company accepted
the exception of three truckload deliveries of household goods from
California to St. Louis for a 1,600 square foot home with the weight
equivalent to seven bedrooms of furniture, and eight flat screen
televisions. A household goods weight limit was implemented into
policy to avoid future abuse.
To curtail these types of appeals, one company requires that the
company’s ceo approve everything over $25K. In most instances
however, a vice president or higher-level approval is required in
order to move forward with an exception to policy. Some rely on the
ability to point the requester toward the apportioned miscellaneous
allowance to cover exceptions outside of policy.
A few cited constructing an approval chain with as many as five
required signatures to make it as difficult as possible to permit
an exception.
Sanctioning others to approve exceptions helps reduce the
administrative burden of smaller-cost items:
One firm handles up to $500 of exceptions within the
mobility group, above $500 the approving power shifts
to the business unit
A large majority relinquish exception control to the
relocation management company up to a certain amount,
averaging $1,000 in the group
Exception reporting was a top ranked cost-containment
solution at the Summit offering the opportunity to map
out trends which provide ammunition to change policy
where applicable.
UNIVERSAL
20. 19
Payback Agreements
Majority ruled on incorporating payback agreements within the
mobility program and with a 2-year term on a varying sliding scale
range. 12-Months was the second noted timeframe and for these
few companies, plans were to expand their payback agreements
to 24-months.
Many at this year’s Summit have not attempted to recoup the money
owed after an employee has left the company prior to the contracted
term, but those who have, are steadfast about collections.
Some payback collection approaches:
Deduct as much as possible from final
paycheck and/or PTO balance
Employ a collection agency
Utilize internal resources (i.e. payroll)
As leverage, forgive amount as a part of the
settlement agreement
Involve legal department
Collection has been halted in some U.S. states such as California
and beyond the lower-48 due to legal restraints.
A high-volume company participant chimed in on the topic and noted
that its collection efforts are currently in the works for as far back
as 2010. The collection push began with sending multiple letters and
last year $86,000 was recovered.
UNIVERSAL
Top 5 best practices
1. Incorporate sliding scale payback amount
(ranging from 100-percent to 25-percent)
2. Present within offer letter
3. No services ordered until agreement letter is signed
4. Commence effective date at either:
a. Signing of the offer letter
b. Hire date
c. Position start date
5. Activate payback as late as possible at either:
a. Date of last relocation expense
b. When employee arrives in the new location
c. Household goods delivery
21. 20
INTERNATIONAL
INTERNATIONAL MOBILITY
Is globalization treading water as the Summit keynote speaker,
Carol C. McMullen, chief innovation officer for the Crossland
Group, suggested? This year, 56-percent of the 61 companies at
the Summit expect an increase in international transfer volume
as compared to 92-percent in 2011. Volume of the companies
present for the Summit spanned from less than 20 assignments
or permanent transfers to 400 annually.
Annual International Volume
c Volume
Chart B:
Annual International Volume
Long-Term Assignment (LTA)
5-20 34%
20-40 6%
40+ 20%
Short-Term Assignment (STA)
5-20 30%
20-40 2%
40+ 14%
Permanent Transfer
5-20 38%
20-40 4%
40+ 12%
Chart C:
Home Sale Programs
Listing Price
Capped Percentages
2014
2014
2013
2009
12%
8%
4%
40%
103% 104% 105%102%
29%
15%
22. 21
During an international session, questions surrounded mobility practices
in Canada. A Summit participant representing a company headquartered
in Canada shared her knowledge on the following questions:
Question: In Canada do you offer different benefits?
Answer: We do not offer any different benefits in the different provinces.
Question: Are documents available in English and French?
Answer: In the provinces where French is spoken, documentation is
provided in both French and English. We do not offer language assistance
because there are plenty of bilingual and French immersion schools.
Question: What do you do about assignments in Canada and transitioning
assignees to a permanent status versus remaining an expat?
Answer: Once assignees have worked 990 hours they can obtain their
permanent status without an employer sponsor. The Canadian experience
is Canada’s way to help build their workforce numbers.
Question: Do you have any programs for global nomads?
If so, what is the success rate?
Answer: We have a program where assignees work 28 days in 12 hour
shifts and then they are off for 28 days. Assignees’ do not accrue vacation
time during the off days and their family stays in the home location during
the assignment. This group is self-insured for health care. Initially when
the program was launched it was tough to sell and now people find it
works well. There have only been two unsuccessful assignees in this
program and that was due to the poor location.
INTERNATIONAL
A great deal of focus was placed at the Summit on locations around the
world that were causing the most concern or noise for global mobility
leaders and their assignees.
China was deemed a problematic location due to the visa and immigration
process. It was identified as complicated due to:
Provinces requiring separate work authorizations
Constantly changing laws because processes remain in various
stages of approval in the country’s system therefore execution is
rare and even more changes result
Many mobility managers uncovered that short-term or long-term
assignees were sent by their company to the destination with the wrong
visas in order to avoid the exhaustive process required to obtain the
appropriate visas. This has provoked a red flag situation for most because
the group has detected that China has begun verifying documentation and
placing pressure on companies to file for the proper work visas.
For India, the group shared their experiences of the same compliance
issues as China and many other locations where companies have exposed
their brand by continuing to take improper work visa and tax risks.
Many mobility professionals have taken action to educate business unit
managers regarding the high-risk practices.
d
ent
on
son
Callout/infographic Julie, please use an
icon or image of Canada and design an inter-
esting QA type infographic that shows the
group asking questions of this person amid
the group.
Germany
India
Africa
GermanyCanada France
Japan
Where in the
World was
the Focus?
52% U.S. Domestic volume
How long employee stayed
with the company
If employee was promoted
Performance review results
$50,000
Callout/infographic Julie, please use an
icon or image of Canada and design an inter-
esting QA type infographic that shows the
group asking questions of this person amid
the group.
France U.S. Germany
23. 22
Popular Policies
Rotational programs (AKA Backpack assignments) are dominated
by millennials and offer a culture-rich experience with fewer
benefits. Many in this age group view overseas assignments as
a rite of passage.
Typically less than 90 days in one location, backpack assignments
may include multiple locations in sequence:
Intra-country
Cross-border
International
The group discovered that many are in the process of exploring the
creation of policies for returning foreign nationals to these countries:
Expat Lite programs have gained traction with many of the attendees,
because ultimately the tax impact can be minimized.
Local plus programs have gained popularity, too.
This movement shortens the length of time it takes
to localize an assignee and reduces costs to the
employer, because benefits are eliminated while
keeping the assignee on the host payroll such as:
No COLA
No equalization
Fewer allowances to assist
with the initial settling-in services
INTERNATIONAL
An example was shared by an attendee of their intra-zone
policy. This type of policy is designed to accommodate
assignees in the company’s busiest locations
The company’s intra-zone package features:
Three year assignments
Ongoing tax preparation assistance
(no equalization)
U.S. citizens remain on U.S. payroll
Non-U.S. citizens transition to host
country payroll
Repatriation or full localization
2.6 Full-time 4.6 Part-time
internal employees support
each company’s relocation volume
40% International volume
52% U.S. Domestic volume
Representatives’ and their teams’
time was dedicated to
How long employee stayed
with the company
If employee was promoted
Performance review results
$50,000
Standard
Employment
Population
Relocation or
Assignment
Population
Termination Rate Comparison
Callout/infographic Julie, please u
icon or image of Canada and design an
esting QA type infographic that show
group asking questions of this person a
the group.
France U.S. Germany
India
Africa
GermanyCanada France
$50,000
Standard
Employment
Population
Relocation or
Assignment
Population
Termination Rate Comparison
Callout/infographic Julie, please use an
icon or image of Canada and design an inter-
esting QA type infographic that shows the
group asking questions of this person amid
the group.
France U.S. Germany
India
Africa
GermanyCanada France
Japan
Not so popular:
only 8% of
surveyed
respondents’
employ regional or
country-specific
policies
24. 23
Mission Critical - Workforce Security
is Serious Business
Protecting the global workforce at the highest level
was a major concern for all at the Summit. Many have
regimented security briefings with departing assignees
to provide:
Detailed information about the location
Expectations of the assignee
Emergency evacuation procedures
Completing a security form prior to an assignment was
a key element for one attendee. On the form, three
questions are asked that only a family member would
know such as specific markings on their body.
For high-risk areas, a few have tasked their risk
management department with site visits and assessments
of the location prior to sending their assignees onsite.
This process prompted one participant to require that all
assignees live in a compound.
A zero-tolerance policy is enforced for another
participant because a fatality took place after the
assignee elected to take a quick break on the side of the
road before entering the compound. Busing assignees to
and from their designated compound with zero outside
contact is now required in the dangerous country for
the company.
Most provide a hardship allowance in hazardous
areas which is capped based on the location.
INTERNATIONAL
Ensuring the positive health status of employees was a top topic. For example,
the dangerously poor air quality in China prompted the group to share a few
techniques among their global mobility peers:
Through a provider, conduct online health screenings prior to departure
and while in the host country
Pay for annual medical exams. While the assignees’ results are not
provided to a company, one participant suggested that a company
request health assessment medical results become a part of the terms of
employment for new hires not affected by HIPPA-requirements.
Removals
Security is also critical when considering international household goods services
and it is best to select a provider that is dedicated to anti-bribery practices and
security-threat compliance worldwide.
Common removal parameters determined by the mobility
professionals were justified as:
Many in the group authorize international household goods storage benefits based
on projects. Assignees in one participant’s company have a fifty-fifty chance of
receiving the benefit. And for a selection of projects, $150 per month of storage
is apportioned.
Long-term assignment allowances:
Family - 40’ shipment container, +2 LDNs via air
Single – 20’ shipment container, +1 LDNs via air shipment
Short-term assignment allowance:
Equates to excess baggage only
75%
25. 24
Some shared a mutual resistance from assignees who
have refused to localize, because their pensions would be
surrendered. France and Germany were recognized as having
rich pension plans and localizing people in those countries
can be costly.
One company participant offers a local premium in all
countries that it sends assignees, and for three years offers:
Local payroll
Lump sum for healthcare
School allowance
Housing assistance
A relatively few try to avoid localization altogether. One option
shared was to incorporate language in the offer letter and
within the assignment policy that states after five years the
assignee must return home or move on to another assignment.
INTERNATIONAL
In Africa and other countries where expats are unable to
reside on the local social program, enacting a Local Plus
option was discussed as a favorable alternative.
a air
a air shipment
timeline of three years
with a sliding scale
reducing the $ percentage
from
Adding a world map or
somehow representing that
this person is being
detached from the home
country and now
permanent in the new
country would be ideal. nt
25%50%75%
Time to Localize, Now What?
When many of the seasoned executives attended the
international sessions at the Summit they discovered that
all were on a similar path to realigning their programs
approach to localization. Many have taken a more
structured and regimented methodology to weaning their
assignees to the host country payroll and benefits.
Shortening the localization timeframe from five to three
years and phasing out allowances (excluding COLA) on a
sliding scale each year was a hot trend:
26. 25
INTERNATIONAL
Language training has been proven successful for assignees
and their spouses. But, during an international breakout
session this puzzling question was raised:
“What is the proper age for children
to attend intercultural training?”
The session moderator sent an instant message to Dean Foster,
president of DFA Intercultural Global Solutions, LLC who
offered this response:
“Evidence indicates that when a family is relocating abroad,
the most important individuals to receive cultural training
are the parents who will be responsible for the successful
adjustment of the children, and not the children themselves.
The younger the child, the less responsible they can be for
the success of their own adjustment and adaptation to a
challenging foreign environment.
There may be occasional situations where children are
uniquely curious, insightful, or need special attention to
personal questions and concerns, and for these situations, a
separate individual children’s training is advised. This often
comes up when working with adolescents, who typically may
have strong concerns about making an international move.”
Some companies offer programs that are segmented by age
groups and range from 8 to 13+ years old.
Shifting Gears - Reverse Relocation Policy
Failed assignments happen. One company has a policy in
place for permanent transfers that are not successful within
three years of the assignment start date. A household goods
shipment is covered under their reverse relocation policy and
travel expenses are reimbursed.
Protecting assignees in this awkward situation was a concern
for most. A similar policy offered by one firm includes
assignees have been laid off by the employer. The repayment
agreement is not enforced and this firm will only help relocate
the assignees back to their home location if a job within the
organization is available.
