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2014 Worldwide ERC Transfer Volume and Cost Survey

Every year, as you know, we like to take a look at the Worldwide ERC Transfer Volume and Cost Survey to identify relocation industry trends. We always write about some of the important highlights and, this year, we are excited because the numbers are optimistic.  We are also optimistic here at XONEX – we are excited for 2015 – and we feel that these trends are consistent with what we have been seeing here. Even though the survey collects data that is a year old (despite being a forecast) – this year’s data is from 2013 – I think it’s still relevant and interesting. Also, now that we are in 2015, we can see how close the survey actually was to reality (feel free to weigh in on the comments section.   Further, survey respondents include a broad range of respondents representing approximately 23 different industries including retail, manufacturing, insurance and more.

Some key findings taken directly from the survey include:Relocation Issues and Trends

  • On average, participants relocated 355 employees in 2013 and anticipate this will rise to 379 employees by the end of 2014.
  • Employee transfer activity in 2013 increased 9 percent. Most (47%) of respondents expect an increase in 2014.
  • More than half (57%) of transferees in 2013 were renters, but this was a drop from 62 percent in 2012.
  • On a positive note, only 49 percent of companies in 2014 experienced a reluctance to relocate, which was down from 61 percent and 78 percent in 2013 and 2012, respectively.
  • The average cost to relocation an employee homeowner in 2013 was $90,219, down a percentage point from 2012.
  • A majority (72%) of companies offer a lump sum only policy or a partial lump sum policy.
  • Two-thirds (64%) of respondents outsource their entire mobility program, while an additional 25 percent outsources select components.

Here were some other points to note:

Costs Associated with Relocation

There were five relocation cost drivers that increased in 2013 over 2012 (an increase of 5.8%). These include home finding trips (20%), household goods moving (4%), purchasing closing costs (2%), temporary living (2%) and homesale assistance (1%). To offset these increases, however, there were a lot of relocation costs that decreased. Yes, you read that right. With the housing market bouncing back, loss-on-sale assistance saw an 11% decrease in 2013. Combined with last year’s results, this is a 24% total decrease for the past two years. We can only assume that 2014 was even better, so I expect to see another drop in next year’s survey. Other decreases include federal tax liability (-14%), spousal assistance (-7%), final move (-5%), miscellaneous expense allowance (-3%) and duplicate housing allowance (-3%).

Lump Sum Policies Vary

This year, Brookfield and ERC queried companies about lump sum policies for the first time. Most of the respondents (72%) offer some kind of a lump sum policy. One-third (37%) offered partial lump sum payments intended for specific costs. When it came to lump sum only policies, 25 percent offered them to some employees and only 10% offered them to all employees. We were pleased to see that the number of companies offering lump sum only policies to all employees was lower. While lump sums have an important role to play in the relocation big picture, a one-size-fits-all sum isn’t necessarily effective or talent friendly.  A creative lump sum policy goes a long way.

How does your program compare to the results of this survey? How does the increase and/or decrease in your program costs compare ? Tell us about it!

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MIKE CANNING
VP, Client Services

RICK CALANNI
VP of Business Development Northeast Region

 

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