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Rocky Relocation: Challenges Facing Companies and Their Transferring Employees

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Country-specific challenges — such as controlling costs, complying with local laws, and complex housing issues — loom large for relocation managers at multinational companies, according to the just-released 2012 Trends in Global Relocation: Biggest Challenges Survey from Cartus Corporation.

The survey, which focused on geographic challenges in 11 regions around the globe, found that many of the issues impact not only the company’s relocation managers, but also the daily lives and job success of their employees on the ground. The Cartus survey garnered responses from 193 international mobility managers from around the world. All major industry groups were represented and the respondent companies had an average global relocation volume of approximately 400 annual moves.

“Our 2012 Biggest Challenges Survey digs deep into the particular global relocation challenges that face multinational corporations, their human resources departments and their transferees as they deploy to dramatically different locations around the world,” says Matt Spinolo, executive vice president at Cartus.

When ranking factors that posed the greatest challenges to managing their overall global relocation programs, controlling relocation/assignment costs and complying with laws and regulations ranked first (61 percent) and second (51 percent), respectively.

The need for companies to control costs puts direct pressure on benefit levels, which can impact assignees in their daily and work lives. Complying with laws and regulations, such as visa and immigration timeframes and requirements, may have an immediate negative effect on employees’ ability to begin productive work and to undertake the most basic elements of daily life, such as opening a bank account.

Housing ranked third, with 41 percent of respondents considering it a significant challenge. As one of the issues most important to assignees and their families, housing challenges can have a disproportionate impact on assignee and family satisfaction as well as assignment success. In more developed areas, housing may be acceptable, but costly and in high demand. In less developed areas, housing often fails to meet standards acceptable to assignees, and fewer choices can often mean that options are surprisingly expensive.

“The challenges associated with many of these locations — limited schooling options, the need for security precautions, and often the cost and scarcity of housing — are leading a growing number of companies to consider ‘split-family’ solutions,” says Ian Payne, executive vice president for Cartus in EMEA and APAC. “In these situations a family may reside in a more developed city in the host country, with the assignee traveling to the office or plant location, or in some cases the family may not make the move at all, but remains in the home location for the duration of the assignment.”

10 Greatest Challenges for Companies Managing Global Relocation Programs

1. Controlling relocation/assignment costs: 61 percent
2. Complying with laws and regulations: 51 percent
3. Housing: 41 percent
4. Moving employees into areas with limited infrastructure: 29 percent
5. Structuring compensation packages: 28 percent
6. Finding suitable candidates in the local market: 27 percent
7. Attracting qualified candidates to go on international assignments: 24 percent
8. Payroll & currency issues: 24 percent
9. Safety & security: 24 percent
10. Schooling: 24 percent

“Challenges differ tremendously from country to country, making the relocation process more complicated for companies that need solutions when they move employees to more locations as well as locations that are less developed,” says Spinolo. “One size simply doesn’t fit all.”

The challenges are especially daunting when companies are moving employees into any one of these top three most challenging regions:

– Africa ranked first among global regions in 12 out of 15 potential relocation challenges, many with personal and family implications whether the relocation destination is urban or rural;

– Central and South America led all regions with challenges in structuring compensation packages and payroll and currency issues, which can embroil companies and employees in complex bureaucratic issues; and

– Greater China led all regions in language and cost-control issues.

India, northern and central Asia, and the Middle East rounded out the top six most challenging regions. Challenges for companies and employees in these regions could be magnified as companies continue to move employees to more and more locations globally, as identified in the 2012 Cartus Global Relocation Trends Survey.

For more information, visit www.cartus.com.

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