Staffing Management

Sector Report: Relocation Moving to Benefit Status

By Sarah Fister Gale

Nov. 26, 2019

If you can’t fill critical roles through new hires, why not recruit for them internally? It is a question that many companies are pondering as they consider their global talent gaps, and it is driving changes in the way they think about relocation.

Internal mobility is becoming a priority for companies as a tool to attract and keep top talent, said Vince Cordova, principal at Mercer focusing on global mobility. “They are thinking about it more as a way to create an employee value proposition than as a tactical tool to address a resource gap.”

The good news: Millennials and Generation Z are eager to move for new opportunities, and they don’t require a lot of money to get them there. Fully 42 percent of millennials say they would “definitely move” for a job, compared to just 18 percent of Gen Xers, according to a recent Indeed survey.

“They see relocation as a benefit of employment,” Cordova said. Companies are capitalizing on this trend by making relocation part of their recruiting pitch, promoting opportunities to move as a reason to join.

That is changing the role of internal mobility professionals and the vendors they work with. When companies make mobility part of recruiting, vendors have to partner with the recruiting team, and get involved with candidates before they are even employees, Cordova said. “It changes how these vendors interface with the groups facilitating relocations.”

Flying Under the Radar

Companies are also facing increasing pressures to rein in “stealth ex-pats” who don’t fall under the traditional relocation umbrella, said Taryn Kramer, vice president of global consulting for Sirva Worldwide, a global relocation and moving service provider. These include employees who travel to the same location several weeks per month, or live in a different city five days a week. “It’s not a new phenomenon, but organizations are becoming more aware of the compliance and tax risks these employees create,” Kramer said.

Companies have increasingly embraced these business travel models as an alternative to requiring long-term relocations, but when employees cross borders for work they face compliance and immigration issues that may not be getting addressed. The laws aren’t complicated to comply to, but because these employees fly under the radar no one takes ownership of that process, Cordova said.

It is an opportunity for vendors to add new value, by becoming a centralized resource to support every kind of relocation for every business unit, he added. “Organizations are supporting more types of mobility than they did in the past, and they need policies that allow everyone to access vendors, and to leverage the right resources.”

Kramer agrees. “Flexibility is the word of the day,” she said. Companies realized that relocation packages today have to be fit for purpose and flexible enough to accommodate the specific needs of the employee, the business unit and the project.

Customization at Scale

That’s putting pressure on vendors that are accustomed to achieving scale through repeatable processes. “When five people need five different relocation packages, it requires a more nuanced service,” she said. In response, many vendors are developing more sophisticated user portals that give employees access to tools to plan their own moves with minimal human interaction. “It’s a way to build repeatable processes even if every package looks different,” Kramer said. This also appeals to younger workers who like the DIY approach to mobility.

Though not every employee will appreciate a totally hands-off approach, said Cindy Madden, director of consulting solutions at Cartus, a global relocation services provider. Last year the industry anticipated seeing more lump sum relocation packages after President Donald Trump passed the Tax Cuts and Jobs Act, which eliminated tax exemptions for many aspects of employee relocation programs. But that prediction didn’t pan out.

“While some companies did more lump sums for middle management it hasn’t become the norm,” she said. Instead, many companies are trying to rein in costs by combining options, offering partial lump sums with a selection of services or capped moves. “Companies realize that they can’t send their people on assignment without support or they will end up with unhappy employees.”

The best response to all of these trends is to create a centralized mobility office, Kramer suggested. Then partner with vendors who can provide a customizable selection of tools and support for every kind of employee.

Whether it’s a junior team member looking for an opportunity to work abroad, a manager who is needed on a project site but doesn’t want to uproot her family, or an executive who’s transferring to a new office indefinitely, they all need resources and support to be successful.

Sarah Fister Gale is a writer in Chicago.

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