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2012 Trends in Global Relocation: Employment on the Rise

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Despite a challenging global economy, 57 percent of multinational companies expect to increase the number of employees they transfer this year and next, according to the 2012 Trends in Global Relocation Survey released recently by Cartus Corporation, a provider of global relocation services.

Cartus conducted its analysis of worldwide relocation trends during the first quarter of 2012. The survey contained 111 questions that were answered by 122 multinational firms based in the Americas, EMEA, and APAC, and representing all major industries. On average, each respondent company has approximately 49,500 employees throughout the world and transfers more than 300 employees annually.

When asked, “How do you expect your organization’s mobility activity to change over the next two years?” 57 percent of respondents expect assignment activity to increase, 37 percent expect it to stay about the same, and 6 percent of firms surveyed envision decreasing their number of global transferees.

“Our global trends survey uncovered two key issues behind the anticipated increase in corporate relocation activity: a need for companies to support their planned expansion into emerging markets, and a need to fill the void in available local talent in those markets,” says Matt Spinolo, executive vice president of Cartus.

Among the more surprising findings of the Trends in Global Relocation study is that despite the respondents anticipated increase in relocation volume, companies are changing the way they deploy employees. Not only are firms moving away from traditional, long-term assignments into more alternative, temporary forms, but they are also trimming benefits and somewhat reducing assignment durations.

Commenting on the finding of companies’ reduction of assignment benefits, Spinolo says, “The survey also documented the trend toward benefit ‘right sizing’ which, for many companies, has been driven by years of a tough economic climate that have made them smarter and more targeted in their assignment programs.” Although this pertains to all relocation assignment forms, it is most notable in long-term assignments, where approximately half (51 percent) of companies said they will most likely alter their policies associated with long-term assignment during the next two years.

Meanwhile, employees are also focusing more on their careers when it comes to deciding to accept a job transfer. The survey found that the No. 1 reason (at 90 percent) employees accept job transfers is “career development” over “attractive compensation.” Survey respondents ranked compensation a distant second on the list at 35 percent.

Some of the key findings of the survey include:

· Overall compliance — This was ranked as the issue of greatest concern to companies in terms of its future impact on their organizations. Companies’ overall compliance concerns typically encompass tax, immigration, compensation, and benefits challenges involved with moving assignees globally.

· Controlling costs — Sixty-one (61) percent of companies reported an increased focus on controlling costs and more tightly managing the overall relocation function; while fairly high, this number nevertheless represents a decrease from the 76 percent of companies that reported an increase in controlling costs in 2010.

· Emerging markets — Expansion into emerging markets was ranked as the leading reason for increased relocation activity over the past two years. Meanwhile, the locations to which companies are sending their employees are increasing; respondents named 41 separate countries among their individual top three most frequent relocation destinations, and the number swelled to 74 when companies were asked about new locations to which they are sending their people.

· Permanent transfers growing — As another strategy to help control costs and better position themselves, the survey showed that companies are moving more employees on permanent transfers, with local pay and benefits. The five countries that received the greatest increase in permanent transfers over the past two years are: the United States, the United Kingdom, Singapore, Switzerland, and China.

Commenting on these trends, Spinolo says, “The focus on compliance is clearly being complicated by the explosion in emerging markets, where navigating regulations in the key areas of tax, compensation, and immigration can be incredibly complex. Simultaneously, these issues are posing new questions for how companies handle their growing populations of ‘global nomads’—an emerging group of transferees who move so regularly, and so repeatedly, that they never return ‘home’ and become career expatriates.”

Today’s Assignee: More Experienced, Older, More Likely to Have Partner

The profile of today’s assignee is shifting from younger, single employees who were more prevalent just two years ago. Companies surveyed this year said that 48 percent of their transferees would most likely be 40 years old or older—a 37 percent increase compared with 2010.

Likewise, the percentage of transferees who were married/with partner and accompanied rose sharply to 49 percent—a 29 percent increase from 2010’s survey.

Countries Posing the Biggest Challenges – BRICS Countries

Over the next two years, multinational companies believe these five emerging-economy countries, also known as the BRICS countries (Brazil, Russia, India, China, South Africa), are poised to present the biggest challenges for assignees (in rank order based on responses below):

1. China
2. India
3. Brazil
4. Russia
5. South Africa

For more information, visit www.cartus.com.

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