GLOBAL SURVEY
Taking the temperature of global relocation
A new worldwide survey of relocation managers provides valuable insights into the challenges facing them and those whom they are responsible for moving, covering everything from policy to family support. We examine some of its findings.
T
he fifth annual Trends in Global Relocation: Biggest Challenges Survey by Cartus canvassed the views of nearly 150 mobility managers based around the world. Respondents included
relocation managers from multinational companies across industry sectors and geographical regions, between them representing more than five million employees. Cost control, compliance and compensation emerged as the top three
challenges for relocation managers, with certain aspects, including long waits for work visas, problems with payroll, and issues with housing, common to all world regions. Though still the leading challenge for relocation managers,
controlling relocation/assignment costs appears to be a less pressing concern than in previous years. While 54 per cent of respondents said that the need to control costs was about the same as last year, only 45 per cent said that it was a greater concern than last year, compared with 57 per cent in Cartus’s 2014 Global Mobility Policy & Practices Survey. This downward trend may be due to the success of cost-control
measures that have already been implemented, combined with a slightly improved global economy. Showing the greatest rise of all the challenges listed in the survey,
and seen by respondents as the second-biggest challenge, was complying with laws and regulations. Visa and immigration issues, from complex and/or changing regulations to long processing periods, were cited as increasingly challenging, with 63 per cent of respondents experiencing longer waits for visas. One reason for this rise may be the growing use of short-term
assignments, which often require more staff time and effort than traditional long-term assignments, as the visa process must be repeated more frequently. Currency fluctuations, named by 51 per cent of respondents, were
among the biggest headaches afflicting companies and their assignees in the area of compensation, allowances and payroll, which was seen as the third-greatest challenge. International assignees will object if they are paid in their home
country’s currency and the host country’s currency is then subject to deflation, or if they are paid in their host country’s currency and that currency becomes inflated compared with their home currency. Having allowances paid by a third party, Cartus says, can allow for more flexibility in the programme and reduce the impact of currency fluctuations. Also named as challenges in this area were split payroll requirements,
payroll taxes, determining home/host pay approaches, shadow payroll, and lack of pension portability. As the report’s authors point out, split payrolls are difficult to run;
keeping employees’ salaries constant from month to month means constant recalculations to reflect exchange-rate changes, and ensuring
that the various taxable and non-taxable pay elements from two payroll systems are in sync is a major task. Working with a third-party provider that offers comprehensive
and accurate shadow payroll reporting can provide clear options on the decision as to whether a home- or host-based approach is best. Housing, though down by 14 percentage points from 2014, was a
concern for 64 per cent of respondents, and took fourth place in the league table of challenges. Other challenges included lack of available spaces in desirable schools, named by 77 per cent of respondents.
World regions: relocation winners – and losers The survey also asked which regions had seen an increase in relocation volume over the past two years, and which respondents regarded as most important to their company’s future. Although it fell from 53 per cent in 2014 to 48 per cent in 2015,
North America once again emerged as the region that had seen the biggest increases in relocation volumes. Europe, named by 42 per cent of respondents was again in second place, up seven percentage points from 2014. The Middle East took the number-three spot from China, with 27 per cent of respondents (up eight percentage points) having seen an increase in volume. In contrast, all parts of the Asia Pacific region, with the exception
of North East Asia (including Japan and Korea), saw greater or lesser decreases. When considering the importance of regions to companies’ future
business goals, respondents again put North America at the top of the list, although it was down slightly on 2014. Europe and China, which swapped places from last year – perhaps reflecting the economic slowdown in China – completed the top three. Again, in the Asia Pacific region, North East Asia was the only area
to see an increase (albeit a modest 1 per cent) in companies regarding it as critical to their future business goals.
TM and GM: strengthening the link Though it is widely accepted that building links between talent management and global mobility can help to ensure that assignments contribute to achieving business goals, few companies have the resources, time, or, in many cases, executive buy-in to do so, the report’s authors point out. In some instances, companies may have effective approaches in
place, but they fail to make the necessary connections between HR and business units, and thus lose the benefits of employee career development and return on investment. According to the Biggest Challenges Survey respondents, the
strategies most frequently implemented focus on considering employee performance ratings upfront, and ensuring that assignment objectives
20 | Re:locate | Summer 2016
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