Each year in the Fall I look forward to reading the Worldwide ERC Transfer Volume and Cost Survey. After reading this year’s survey, I wanted to write about some of the highlights that I think are important, mostly because they can be a good tell for the future of relocation. Even though this survey collects data that is almost a year old – this year’s data is from 2011 – I think it’s still relevant and interesting.
The survey respondents include representatives from approximately 23 different industries including pharmaceutical, utilities, insurance and more. Consequently, the majority of relocation managers and relocation services companies should find some of the data points to be relevant to their business. Here are some of my key takeaways from this year’s survey:
Relocation outperformed projections. How awesome is that? Companies forecast that the transfer volume for 2011 would be about 273 moves – but the actual volume jumped to 323 moves. Not only did volume beat expectations by leaps and bounds, but it reflects a 30 percent increase over 2010. Historically, this marks not only the largest jump in volume, but also the highest level of volume since the survey began. Even better, projections for 2012 volume rose to 343. Could this mean that relocation is past recovery and is now poised for future, sustainable growth? These numbers don’t reflect budgets or spending, but we certainly hope so.
Are we balancing out? One of the symptoms of the housing market crash was that fewer homeowners were willing or able to relocate. As a result, companies moved more renters. In 2010, a whopping 62 percent of transferees were renters. In 2011, 59 percent of transferees were renters. While this is still high, the hope is that this slightly downward trend is indicative of a stabilizing housing market. This is a likely conclusion given the positive housing reports in the news lately.
Relocation costs on the upswing. Unfortunately (and, yet, fortunately) the Zombie apocalypse theory remains untested. Relocation costs are rising. In 2011, the average cost to relocate a current employee homeowner and new hire homeowner was $97,166 and $72, 672, respectively. This is up from $90,081 and $69,020, respectively, in 2010. The majority of the cost increase for homeowners is due to temporary living expenses. This makes sense as there is still a drag on the time it takes to secure financing and close on a home. That said, this is an area that can be adjusted with the right strategy, so companies should review their relocation policies to ensure they are providing the right level of this benefit. We have an relocation EBook on this very issue!
Homeowners gun-shy on buying again. A whopping 75 percent of companies reported an increase in the number of home owning transferees choosing to rent in the new location. Clearly, the housing market is still intimidating to homeowners who may have gotten burned by the crash or don’t want to overextend in a shaky economy. At the same time, there has been an increase in homeowners choosing to rent out their homes at the old location. If you are seeing this in your business, here are some tips for how to handle accidental landlords.
Outsourcing tips the scales. Nearly 60 percent of organizations reported that they full outsourced the mobility function in 2011, up from half (50%) in 2010. Given the relocation challenges we have experienced over the past five years, it makes sense to want to work with experts in the field who are adept at finding solutions. As relocation becomes increasingly more complicated, and human resources is forced to do more with a smaller team, I believe this number will increase.
These are just a few of the salient points I pulled from the survey, but you can review all of the results on the Worldwide ERCs website here.
How does your program compare to the results of this survey? Let us know below.