Global mobility needs to be more flexible, says Cartus survey

Global relocation support provider Cartus has released its seventh "Trends in Global Relocation" survey, showing cost concerns and the need for greater flexibility as the most influential factors.

Cartus 2016 Global Mobility Policy and Practices Survey
The global relocation landscape is constantly adapting, requiring multinational companies to keep up-to-date with the best approaches for global mobility policy while also keeping the costs down.Aware of this requirement, Cartus, the global relocation support provider, has recently released the seventh version of its Trends in Global Relocation: Global Mobility Policy and Practices survey report.The study, sponsored by the National Foreign Trade Council (NFTC), surveyed 176 mobility managers – who represent almost 10 million employees – on a range of mobility-based topics. The report outlines the challenges faced by companies today, the solutions they are employing and where their employees are being relocated. The report highlights a number of issues facing the global mobility world today; we look more closely at three of the key points.

The need for flexibility

Traditional assignments – both long and short term – involve sending assignees out to a host location and bringing them back once the assignment is completed. The report highlighted a shift in relocation trends suggesting that the most common type of relocation assignment today is a permanent move, whereby the return trip upon completion of the assignment is handled completely separately.This resulted in 76 per cent of respondents reporting an increase in the need for flexible approaches to job transfers, driven particularly by generational needs and changing expectations, as well as cost concerns.

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Half of companies reported taking an ad hoc approach to building flexibility into their programme – making on the spot adjustments as needed. This approach typically drives up exceptions, which then leads to more costs.Tiered mobility programmes and core-flex are a solution to this problem as they allow for greater flexibility whilst containing costs. Recent reports have touched on the idea that there is no longer a place for long-term assignments in the corporate world due to the increasing costs associated. 

Why are long-term assignments still popular?

Long-term assignments are costly but, despite this, 81 per cent of US respondents reported that they expected long-term assignment activity to increase or stay the same over the next two years.This is a result of the necessity for long-term assignments in particular circumstances such as filling management positions, new business start-ups and specific corporate cultures.Although results show confidence in the longevity of long-term assignments in these areas, assignments themselves will likely look different over coming years due to cost concerns. Certain policy provisions, such as medical exams and household goods storage, are being reduced in order to make assignments less costly.

2. Cost control becoming the "new normal" 

Since 2010, respondents reported that although their companies’ cost control pressures aren't increasing, they aren't decreasing either. Now we see the method in which companies try to cut these costs changing. Below is an outline of the new ways companies are trying to control costs:
  • Outsourcing – 71 per cent
  • Reducing the number of assignments – 70 per cent
  • Tiered programmes – 61 per cent
  • Administrative process improvements – 60 per cent
  • Reducing headcount in mobility programme administration – 60 per cent
  • Reducing benefits – 59 per cent 

3. Compliance issues are a growing concern 

The survey reports that 79 per cent of respondents stated that their organisation's focus on compliance has increased over the past two years. This includes focus on tax, immigration and legal issues, which can cause productivity impacts as well as regulatory problems.

How are companies responding?

  • 72 per cent are focusing on early involvement of tax and immigration providers
  • 56 per cent better tracking days in country
  • 51 per cent more clearly refined policies and procedures 
It is important for companies to consider their level of care for employees who don’t know about relevant tax, legal and immigration compliance. Companies must also be aware of safety and security compliance, as well as appropriate preparation before the beginning of an assignment.

Cartus and NFTC comments

Matt Spinolo, EVP Global Client Services, Cartus discussed the focus on cost containment and flexibility stating that these areas have been growing since the recent recession. With compliance again in the spotlight, Mr Spinolo commented that the continuing utilisation of IT resources has helped tax and immigration authorities "know who is where, when, and for how long. More data means more information, more guidance, and more compliance reporting."He continued, "The high prevalence of permanent (one-way) global transfers among companies potentially indicates a growing recognition of the importance of global work experience, especially among Millennials, who appear willing to get the experience in other ways than the traditional long-term 'expat' package."Bill Sheridan, vice president, IHR Services, National Foreign Trade Council commented, "The focus on cost makes it even more important for companies to pay attention to return on investment, including preventing employees from leaving companies once they repatriate. Companies need to see assignments as an investment for the enterprise as well as for the expatriate."It’s interesting to note that, despite the fact that they are the most costly assignment type, long term assignments are still of major importance, especially as enterprises expand into new markets in Africa, Southeast Asia and other wide ranging locations."

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