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Relocation Industry Trends

Relocation Industry Issues and Trends

Thoughts on the State of Relocation

PuzzledRecently I attended the Worldwide ERC Americas Mobility Conference in beautiful Dallas, TX! Beautiful Dallas where we think of boots, cowboys, and yes, the Dallas Cowboys Football team! However, did you know Dallas is also the home of the notorious Clyde Barrow and Bonnie Parker, better known as Bonnie and Clyde – but that’s a story for another day!

 

During the conference I had the pleasure of sitting in on many sessions and my favorite was the Corporate Round Table Wrap-Up where I was able to listen to several corporate relocation experts talk about their views for the future of relocation.

 

One thing they shared with us was the results of the Peer2Peer Benchmarking Workshop Poll. It was amazing to learn that 84% of the respondents spend between 1 and 5 hours on their smart phones each day. Hard to believe when you think about an 8-hour work day. But then in the relocation business it’s all about the “people” and the “experience”. So staying connected is so important.

 

I was happy to learn that approximately 77% of the respondents anticipate their current US Domestic relocation programs will either remain or the same or slightly increase while 88% represents the same for their new hire programs. Looks like we’ll continue to see hiring and a need for talent!

 

When you think about talent mobility what one word comes to your mind? I can tell you this group had a lot on their mind with words like: growing, technology, automated, virtual, innovative, dynamic, diverse, complex, and disruptive just to name a few. Looks like the future will be filled with very positive changing times.

 

With one of the hottest topics in the industry stemming from the recent 2018 tax law changes one question comes to mind and that is if companies are going to gross up shipments of household goods since this cost was considered excludable in previous years. The response was an overwhelming 81% who said yes and only 8% said no.

 

And while we hear a lot of buzz around U.S. Domestic “core-flex” style programs where the transferee gets to customize certain options, 53% of this group said they do not offer this.

 

I was surprised to learn that 74% of this group felt their organizations use of technology to enhance the employees’ mobility experience was either fair or poor. Looks like we’ve got some room for expanding technology within the relocation industry!

 

There so much more to share with you but rather than write it all on this blog feel free to visit the Worldwide ERC website to see about getting a copy of these results. I’m sure you’ll find it very interesting.

 

What are your thoughts about these results and do they coincide with what’s happening at your organization? We’d be happy to hear from you!

Why Lump Sum is a Long Term “Slump”

Lump Sum Relocation PoliciesWith today’s new tax laws, the notion of cutting a check to a relocating employee to cover the relocation costs and reducing the amount of administrative work sounds like a reasonable plan. After all, now that just about every relocation expense is considered taxable income to an employee, you might as well cut a check and “gross it up” to help offset the employee’s tax liability.

However, there are three key reasons why lump sum programs will jeopardize your relocation program’s objectives.

Ongoing Administrative Adjustments

Once you figure out the amount that’s needed to move the employee, you just need to cut the check. Oh, wait a minute! That’s right, you need to figure out how to budget for specific transferee’s move. Then you need to research costs for the next regional move which is to a different location. OOPS! Don’t’ forget about the next move which is the same location as the first move, except now you are moving a family, and then the 4th move…. Ok, I think I made my point. If a company is using Lump Sum approaches, there needs to be ongoing research and adjustments to keep up to date on relocation costs so the company can distribute fair and reasonable amounts. Even if the corporation uses 3rd party services to provide the regional data, there is a significant amount of administrative work involved to update policies, manage the supplier relationships and consult with the transferees on the recommended use of their lump sum budget.

Loss of all Relocation Costs Data

Although Lump Sum programs give transferees full control of their funds and the flexibility to choose the benefits that are most needed, there is a price to be paid for not knowing how the funds are spent. As mentioned previously, understanding current relocation costs and trends help a company make future program adjustments. Without tracking systems or management of the lump sum spend, all knowledge about actual program costs will be lost.

In addition, as relocation programs continue to be evaluated in terms of performance, productivity and efficiency, there will not be enough adequate data available about how certain benefits may perform for different demographics of relocating employees. For example, did a certain benefit for relocating homeowners help make their transition easier than a renter population?  Understanding a deeper sense of how each benefit in a policy can impact a program will certainly give corporations the knowledge to make strategic decisions on policy development and cost containment. With a Lump Sum program, the ability to evaluate specific benefits across various move types is simply lost.

Lack of Support Equals Lack of Control

Now, for those who will argue with me that online Lump Sum services can help companies track costs, I will completely agree that this holds true. The use of online resources that may provide transferees with self-service options and a network of pre-selected supplier partners can certainly provide companies with accurate reporting on what services are being ordered and how funds are being spent.

However, as a long-time rule, the industry knows that just providing money to Transferees, and in some cases, Expatriates, is not going to make the relocation a success. Whether the transferee is a recent college graduate, middle management 1st time transferee or the current, typical industry profile (male, age 36-40, married, not a first-time transferee and moving for a lateral position), the use of relocation counseling is inherently the key to proving a full level of support for your employee.

As relocation administrators, we must all remember that the Lump Sum funds are still the “corporate dollar,” and as such, have a responsibility to make sure the funds are being used wisely and efficiently. The value of professional resources assisting them in understanding the relocation process, selecting service provider, raising financial considerations and simply offering best practices cannot be underestimated.

Taking a Higher Road

Although at first glance, the use of Lump Sum may offer both the employee and company  an easy solution for covering anticipated benefits, we have seen how “the grass isn’t always greener.” For companies who use Lump Sum or are considering the increase in this policy type, there is no opportunity to cut costs when projected need exceeds actual need.  Before going down this path, an employer might want to consider a managed cap approach.  While this type program is still flawed in determining an effective and equitable cap (typically by salary, job level, own/rent status or family size), it offers more structure and captures the actual expenses, which can be used for future projections.

 

So, if you are currently using or contemplating a Lump Sum approach, remember that it’s not a silver bullet. Don’t forget about the cost containment and efficiency that is realized through the utilization of a partner providing a vetted supply chain, real time reporting and best practices benefit auditing.  In the long run, through efficiency and reduced exceptions, their assistance will result in cost savings beyond that of simply writing a check!

Memorial Day Thoughts

Donald Vautrinot grave

 

This weekend, most of us will enjoy the fact that we have an extra day to relax, work in the yard, or even clean out the DVR.  But, please do take a little time to think of your relatives, neighbors and friends, who have sacrificed time, safety and in far too many cases, their lives, in defense of our country and protecting us all from harm.

 

Several years ago, my sister, painstakingly pieced together, in chronological order, letters between my father, his 3 siblings and parents.  The letters began during the Great Depression and spoke of challenges and the day to day events of a wholesome, close knit family.  When the war broke out, my father’s older brother went off to naval flight school to become a pilot.  My father went off to Yale’s V-12 Naval Officer training school.  Their quiet town life was replaced with the harsh realities of a world at war.  The letters about catching fish or swimming in the Adirondack Mountains were replaced with prayers for safety and updates on relatives or acquaintances missing or dead.  In one letter my grandmother wrote of my father’s cousin Donald, who was missing in Bataan.    The Japanese forces attacked there on December 8, 1941, after Pearl Harbor.  Donald had only arrived there a month earlier, with hopes of becoming an aviator.  He died a few months later in a prison camp, after enduring the Bataan Death march, where 60,000 – 80,000 Pilipino and American POWs were forced to march nearly 70 miles under severe conditions of abuse and random killings.  The Bataan Death March was later classified as a war crime.  Donald was only 23 years old.

 

I relay this somber story because, throughout our country’s history, and today, Americans have and continue to heed the call of duty laying down their lives in defense of our freedoms.  Please do enjoy this weekend. But, take some time to think of these heros and be thankful for the good fortunes we have realized due to their sacrifices.

Time to Take a Close Look at Your Data Privacy

Privacy Key

 

 

 

 

 

 

The General Data Protection Regulation also known as “GDPR” adopted in April 2016 and enforceable starting on May 25, 2018, is quite possibly the most important change in data privacy regulation in 20 years. So, what is this new regulation and how does it affect us?

 

The  GDPR is a European Union (EU) regulation  addressing data protection and privacy for personal information traveling in or through the EU.   In other words, this doesn’t only apply to organizations located in the EU, but all who transmit data from or to the EU. The GDPR aims primarily to give control to citizens and residents over their personal data and to simplify the regulatory environment for international business by unifying the regulation within the EU. The GDPR considers personal information to include any information about a real person, such as name, address, phone, email, websites, photos, medical information, birthdates, etc.

 

To be compliant, organizations need to provide evidence that personal data will not be shared with outside entities without the person’s consent.  Additionally, the individual must have the ability to opt-out of data sharing and be provided with free and accessible dispute resolution, from an independent recourse mechanism, should they feel their information is being shared unnecessarily and without their consent.

 

The GDPR also helps companies like XONEX provide our clients and their transferees with peace of mind that their data will remain safe in our hands.  As the concerns over privacy continue to grow, we anticipate more locations to require such assurances and remedies.  Therefore, we should be prepared to manage all data with the same scrutiny.  The GDPR compliance process is actually an excellent exercise to understand exactly what information is truly essential to assist your transferees or assignees, whether it is subject to the regulation or not.

 

The GDPR is backed up with stiff penalties for non-compliance. So, organizations committed to compliance must stay vigilant in their responsibilities.  Organizations found in breach of GDPR can be fined up to 4% of annual global turnover or €20 Million (whichever is greater).

 

As this extremely important regulation is about to come to fruition, it’s time to understand what steps should be taken.   Ask your relocation management company to provide you with an overview of the steps they are taking to ensure compliance.

 

Do you have any questions or concerns about the GDPR? If so feel free to contact your Chief Data Privacy Officer or your Relocation Management Company to determine next steps. As always XONEX is happy to review the steps we are taking to ensure compliance with you and help you understand this very important new regulation.

Spring is Coming!!!

The Spring Market is Coming!

In years past, we have written blogs about Spring cleaning and preparing homes for a brisker housing market.  This year, all signs are pointing to a stronger market than in the past several, with more options for a more motivated set of buyers.

 

The whys:

Fewer Under Water Sellers:  As the housing market improves the number of people owing more on their home than its current value is decreasing.  According to CNBC, Americans today have three trillion dollars more equity than they did when the market last bottomed out in 2012.  People are no longer trapped in a home that they cannot sell without bringing money to the closing.

Housing Starts Are Sporadic: As more and more markets recover, the number of available existing homes competing for home purchasers increases, cutting into demand for new options.

Interest rates will likely be rising: One thing that has been largely missing over the past several years has been urgency to take advantage of remarkably low mortgage interest rates.  With no increase on the horizon and uncertainty in the market place, there were more tire kickers than trigger pullers.  With the rates likely to rise, and the economy showing positive signs, this has all changed.

Rental Rates are Still Rising: According to Apartment List, rents are up month-over-month in 57 of 100 largest cities. As they rise, it is making more and more sense to buy, where your monthly interest is still deductible and your monthly payment stays constant.

While the market is improving, it is impoHome Garden Imagertant for home sellers to do their homework and not test the waters too high for too long.  Today’s buyers are savvy, with more on-line tools to get a good overview of each market.  As a buyer, you too will need to be on top of things.  Today’s homes that are priced appropriately will sell fast.  Be ready with a mortgage pre-approval and a good understanding of what your payment will be for any given price and the monthly cost per $1,000 increase in mortgage amount.

If you are a transferee, make sure your Realtors at both ends are responsive and forthcoming with actionable information.  Home buying and selling can be very stressful.  But, the better prepared you are, the quicker you can get through it and focused on the next adventure!

Merry Christmas!

Trees are up, candles are lit and lights are flickering about town. It’s that time of year again.DSC_0012-300x200

From all of us at XONEX Relocation, we wish you all a very happy holiday season and a fantastic New Year!

This Week’s Blog Roundup

Every week, we like to share tips, tricks and resources for HR and procurement regarding real estate, relocation, industry trends and/or transferee relations. But sometimes, there are so many amazing blog posts from our friends around the Internet that it just makes more sense to share a collection with you so that we can touch on all of the most important points from the week. I scour several blogs and papers each and every morning and below, I’ve included some of my favorite reads from this week.

5 Marketing Strategies for Your Mobility Program

Why You Really Need to Review Your RMC

“If it ain’t broke, don’t fix it!”  That’s how the expression goes.  But, it’s time to evaluate the definition of broken.  I’m willing to bet that there are a number of factors why you have postponed reviewing the job your relocation management company is doing.

Real Estate Round Up

Ever since I began working in the relocation industry, I’ve had a deep fascination for all things real estate. Makes sense if you think about it, right? We help transferees move all over the world! Selling and buying (or renting) a home is obviously an integral part of the relocation process and so I like to keep up on real estate trends both in the country and out. I typically like to choose one specific topic to share my take on but this morning, during my daily scour of the New York Times, I found too many great articles offering amazing advice and insight. So rather than share my take on one, I’ll just share the articles themselves.

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MIKE CANNING
VP, Client Services

RICK CALANNI
VP of Business Development Northeast Region

 

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