US FOCUS
Photo: Crown Copyright/ Number 10 Credit: Tom Evans
best advice is pay very close attention to trends going forward, but don’t panic.” As Dale Collins points out, this wait-
and-see attitude means that corporate decisions on growth and investment are being put on hold. “It’s far too early to tell what impact
Brexit will have,” he says. “The UK and the EU potentially have as much as two years of negotiation ahead of them as they decouple. And this disengagement isn’t happening in a vacuum – there are other dynamics at play within the EU. There could be further disruptions.” He adds, “There’s a lot of uncertainty
in the world right now, with the US presidential election playing a destabilising role as well. At the same time, uncertainty and dynamic change, like Brexit, heighten the need for thoughtful talent management planning and strategy, with flexible mobility programmes that can be adjusted or redirected as circumstances evolve. “The best substitute for a crystal ball
is the ability to foresee a range of policy outcomes that impact mobility, and to have a game plan for each.” Bill Paxton says, “While US banks
and the financial services sectors have the largest potential shift at risk, at Paxton we have seen normal assignment activity in and out of the UK, but have not seen any of our current clients exiting the UK to other EU member states. “One of our US financial clients with
major operations in the UK has seen increased assignments to and from the UK/US and the UK/Asia in support of their strategic growth, not necessarily due to Brexit.” Cartus suggests that the fall in
announced very quickly in the wake of the vote that they planned to move jobs from London to Europe, but few have yet taken much action. “Because the British pound has fallen
in value, international tourism remains very strong. The overriding sentiment seems to be ‘let’s wait and see’. The disaster scenarios predicted before the vote have not yet happened, and the FTSE and other stock markets have fully recovered or are above their pre- Brexit levels. “There is a growing feeling of
conf idence in London that, at least in the short term, the Brexit vote will have less of a negative impact than originally feared. For US companies in the UK, the
Treasury rates that followed the Brexit vote may result in an all-time low for US mortgage rates. Low rates could cause increased demand for homes as well as loan refinancing.
The rise of rentals Although there has been an upturn in home sales across the US, the question of whether to rent or buy continues to be a hot topic in corporate relocations, Bill Paxton is finding. “According to a 2015 Worldwide ERC
transfer survey, he says, “renting has become a common choice, especially among younger working Americans.
Rent.com reports that nearly six out of ten Millennials say that affordability, with ‘inherent freedom’, is a key reason for choosing to rent.”
Bill Paxton adds, “Corporations
support with relocation assistance existing homeowners who wish to purchase in the new location, even though more than half of companies report seeing an increase over the past three years in the number of home-owning transferees choosing to rent, as the Worldwide ERC survey showed. “For US inbound assignments, most
corporations are still staying clear of new home purchase, and encourage assignees to rent. In the US, most assignees will even sign their own leases. Permanent transfers to the US are more likely to purchase. We must remember, though, that relocating homeowners represent a small portion of the overall US housing market.” Exchange rates are among the factors
affecting the current housing picture for international assignees. Says Dale Collins, “A stronger dollar obviously makes inbound moves to the US more costly for companies in the UK and Europe, but they really don’t have any choice. “Across virtually every industry
sector, the US market simply is so huge that international companies cannot opt out, even in the face of less-favourable exchange rates. Currency-driven costs for mobility are a rounding error compared with the opportunity cost of a diminished presence in the world’s largest economy. “For inbound moves to the US, the
housing-cost calculus is similar to currency impacts. Even if housing costs are on the rise in key US cities, the question is: can your company afford not to be here?” Rising property prices in some parts
of the country are impacting employees relocating domestically. “I’ll give you two examples from
Colorado, where Graebel is based,” says Dale Collins. “Charles Schwab has built a 47-acre campus in south suburban Denver that ultimately will employ 4,000 people, – more than three times as many as its San Francisco headquarters, where housing costs are through the roof. “And Google is building a new campus
in Boulder, with plans for up to 1,500 employees. Housing in Boulder is not cheap, but Boulder and nearby towns are much more affordable than Mountain View and surrounding communities in Silicon Valley.”
For the latest US news and articles, visit
relocateglobal.com
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