BIGGEST CHALLENGES

TRENDS IN GLOBAL RELOCATION
BIGGEST
CHALLENGES
2014 Survey EXECUTIVE SUMMARY
SM
For a full copy of the
Trends in Global Relocation:
2014 Biggest Challenges survey report,
please contact your Cartus representative or send an
email to trustedguidance@cartus.com.
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2014 Survey EXECUTIVE SUMMARY
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Introduction & Objectives
Cartus’ fourth annual Trends in Global Relocation: 2014 Biggest Challenges survey was conducted in
August of 2014 and elicited responses from 164 mobility managers based around the world. Respondents
are multinational companies with an average global relocation volume of 543 annual moves, representing
more than eight million employees.
The 11 Geographical Regions
North America
(including Mexico)
Central &
South America
Indian
Subcontinent
Europe
(including
Western Russia)
North & Central Asia
(including Eastern Russia)
Southeast Asia
Middle East
(including Malaysia
and Indonesia)
Oceania
Africa
Northeast Asia
(including Australia
and New Zealand)
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Greater China
(including Japan and Korea)
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Respondent Demographics
Survey respondents represent organizations across all industry sectors, geographic regions, and ranges
of relocation volume.
Respondents by Industry Sector
Tech
16%
Manufacturing
21%
Finance
15%
Raw Materials
5%
Pharma
4%
Consumer Goods
14%
Oil and Gas
5%
Service/Media
20%
Respondent Locations
Number of Employees Moved Annually
by Respondents
Americas
66%
18%
0–25
26%
26–100
101–250
13%
15%
251–500
APAC
19%
11%
501–1,000
17%
1,000+
EMEA
15%
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Executive summary
Following are the key findings of this year’s survey, showing trending year over year for the leading
findings and a look at some of our new hot topic areas.
• Cost Control, Housing, and Compliance are the Top Three Challenges for Relocation Managers
Controlling relocation/assignment costs has topped the list of challenges for relocation managers for
the past three years. This year, respondents cited as issues high cost of living, schooling, housing, and
the need for continual exceptions in some locations. Housing and complying with laws and regulations
round out the top three challenges, and have consistently been in the top three in recent years. In both
traditional and emerging markets locations, lack of desirable housing and rental costs complicate the
housing search. In the area of compliance, visa and immigration issues such as complex regulations,
long processing periods, and changing regulations were cited as increasing challenges.
Top Three Challenges
(percent of respondents)
77%
47%
45%
Controlling relocation/
assignment costs
Housing
Complying with
laws and regulations
• Africa Named Most Challenging Region; India and China Take the Next Two Spots
Respondents this year named Africa the most challenging region for managing relocation programs.
Safety and security was named the region’s biggest challenge, likely driven in part by concern over
continued unrest in many areas. Moving into areas of limited infrastructure and transportation rounded
out the top three challenges for the region. Last year’s most challenging region, Central and South
America, slipped to fifth place.
The number two and number three most challenging
regions, the Indian Subcontinent and Greater China, were
high on the list of challenging regions last year as well—
number four and number two, respectively. The challenges
within the regions did show some changes year over year;
transportation, this year’s top issue for India, was not even
mentioned last year. Traffic and congestion are big issues
in the region, and most companies provide cars and drivers
for their assignees, which can increase costs. China’s issues
have remained fairly consistent, with intercultural issues
topping the list. Intercultural issues are frequently cited as
difficulties for assignees (particularly those who are from
Western countries), and not only in locations outside of
Tier I cities. (See chart on next page.)
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Most Challenging Region
AFRICA
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Chart 1: Most challenging regions and top challenges
Region
Challenges
Africa
1. Safety and security
2. Moving into areas with limited infrastructure
3. Transportation
Indian Subcontinent
1. Transportation
2. Intercultural issues
3. Moving into areas with limited infrastructure
Greater China
1. Intercultural issues
2. Finding suitable local candidates
3. Controlling relocation/assignment costs
• North America Remains Number One for Importance to Business Goals
North America, last year’s top-ranked region in terms of importance to companies’ business goals,
remains at the top of this year’s list. Once again, it also remains at the bottom of the list of regions
companies found most challenging for managing relocation, as the chart below shows. Greater China
remained in the top three regions for both challenges and importance to business goals, indicating the
need for continued attention to both issues and solutions for this critical region.
Chart 2: Most challenging regions vs. importance to future business goals (percent of respondents
with 4 or 5 on a 5-point scale)
Challenge in Managing
Relocation for Your Company
Location
Importance to
Future Business Goals
Percentage
Location
Percentage
Africa
69%
North America
51%
Indian Subcontinent
55%
Greater China
41%
Greater China
53%
Europe
35%
Middle East
51%
Central & South America
29%
Central & South America
47%
Southeast Asia
26%
North & Central Asia
36%
Northeast Asia
21%
Northeast Asia
32%
Middle East
19%
Southeast Asia
32%
Africa
19%
Europe
21%
Indian Subcontinent
15%
North America
18%
North & Central Asia
11%
Oceania
15%
Oceania
11%
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• North America Sees Largest Increase in Relocation Volume
When asked into which regions they had seen the biggest increases in relocation volume over the past
two years, respondents once again named North America, nine percentage points higher than last year
(53% in 2014 versus 44% in 2013). Greater China, last year’s number-two location, fell to number three
this year, dropping eight percentage points, while Europe rose from number three last year to number
two this year, with a one percentage point increase in respondents.
Regions with the Greatest Increase in Relocation Volume
(percent of respondents)
North America
53%
Europe
35%
Greater China
29%
Hot Topics
• Are Stealth Expatriates Returning? Companies Seeing an Increased Focus on Tracking Employees
As many states and countries become more intent on capturing tax revenue, they are also becoming
more diligent in pursuing taxes owed for employees on
temporary or short term-assignments. These types of
of respondents
assignments have been increasing for a number of years
see
increased
focus on
and can give rise to “stealth expatriates,” employees who
tracking employees
are not being tracked or their movement is not being
reported on with regularity.
64%
Sixty-four percent of companies indicated that they are
seeing an increased focus on tracking employees on
assignment. This focus on employee tracking was also
indicated in our 2014 Global Mobility Policy & Practices
survey, where nearly half (47%) of respondents said that
better tracking of assignees’ days in country was an area of
increased focus in managing compliance risks.
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• Immigration Issues Intensify; Up-Front Planning is Key
With visa and immigration regulations becoming
increasingly complex and companies continuing to send
their assignees to an expanding number of locations, an
increase in focus in this area is not surprising. In fact, the
number one immigration-related area in which companies
are seeing an increase is the need for up-front planning
due to the length of time it takes to obtain visas (83%).
Internal compliance controls (58%) and the need for
visa issues to be taken into consideration at the time of
candidate assessment (57%) were also frequently noted by
respondents.
83% said up-front
planning for visas is key
vISA
• Companies Using Crisis Planning and Security Briefings to Respond to Safety Concerns
When asked to respond to concerns about political instability or security issues, nearly half of
companies are increasing crisis planning (47%) and security briefings (44%). The majority of
respondents indicated that they were not increasing security for special groups, temporarily putting
moves on hold, or repatriating assignees. Proactive crisis plans, including up-to-date lists of assignees
in country, travel plans, and contact information, are examples of things companies have often found
invaluable in emergency situations. Security briefings, both prior to departure and as needed at the
host location, can give needed “heads up” information on developing situations and help assignees to
take independent precautions for themselves and their families.
Interestingly, only 18% of respondents said they were putting security in place for special groups such
as women assignees or families, but this may reflect the position that a well-thought-out crisis plan
includes all of those individuals and can be modified as needed for specific situations.
Country-Specific Challenges
• Health, Environmental, and Medical Issues Lead Challenges in China
Companies regularly report ongoing concerns with health, environmental, and medical standards in
China in both Tier I and Tier II-IV cities. Specific issues include food safety, air pollution, paint toxicity
in apartments, authenticity of mainstream medication, and others. Preventive measures such as masks
and air testing are common. In some situations, facilities such as schools are reported to have taken
extreme measures, including building domes over playing fields. Companies frequently see this as an
issue leading to assignment turn-downs, or split family situations.
Top Challenges in China—Tier I Cities
Top Challenges in China—Tier II-IV Cities
Heath, environmental, medical
standards (including food, air
pollution)
60%
Heath, environmental, medical
standards (including food, air
pollution)
54%
Costs
58%
Appropriate schooling
51%
Regulatory issues (bureaucracy,
complexity, etc.)
54%
Appropriate housing
49%
Regulatory issues (bureaucracy,
complexity, etc.)
49%
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• Housing Presents Biggest Challenge for Companies and Assignees in India
In India, appropriate housing tops the list of concerns in both Tier I and Tier II-III cities. In major cities,
ongoing issues with home maintenance are also a key concern, as units that appear very plush on
the surface can be lacking quality (particularly from a Western point of view) in terms of plumbing,
construction, electricity, and other items. Legal recourse can be very slow, taking from months to years,
and the process may be unclear and frustrating for assignees to navigate. Additionally, there can be a
lack of focus in getting maintenance work done on rental properties, and language and cultural issues,
particularly in Tier II-III cities, can complicate the situation even further.
Top Challenges in India—Tier I Cities
Top Challenges in India—Tier II-III Cities
Appropriate housing
50%
Appropriate housing
65%
Ongoing issues with housing
quality and home maintenance
50%
Appropriate schooling
52%
Medical facilities
52%
Regulatory issues (bureaucracy,
complexity, etc.)
47%
Regulatory issues (bureaucracy,
complexity, etc.)
49%
• Regulatory Issues/Government Bureaucracy Impact Companies and Assignees in Brazil
Regulatory issues/government bureaucracy top the list of challenges in Brazil (68% of respondents),
followed closely by security (66%), and cost control (46%). Regulatory issues cover a variety of
challenges in Brazil, from the country’s restricted currency
and payroll requirements to household goods shipping and
regulatory complications. Survey respondents also frequently
cited visa and immigration processes and timelines as
Regulatory issues
problem areas for companies and assignees.
#1
challenge in Brazil
Issues with cost control, also named as a key challenge, can
stem from a number of areas. Prices for housing appear to
be rising at a much slower pace than the astronomical levels
seen between 2008–2012 (where housing price increases
were up to 194% higher in key locations), but expatriates
are still competing with a newly wealthy middle class for
rental units as well as schooling spaces. Security and traffic
congestion lead most companies to obtain cars and drivers
for assignees—and often for spouses as well—another area of
potential cost escalation.
Top Challenges in Brazil
Regulatory issues, government
bureaucracy
68%
Security
66%
Cost control
46%
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Related Cartus Research
Following are several of Cartus’ recent surveys that we used as a reference point. For more
information on relocation and international assignment trends and additional Cartus surveys, visit
http://guidance.cartusrelocation.com/research-and-trends.
®
TRENDS IN GLOBAL RELOCATION
Global mobility
policy & practices
2014 Global Mobility Policy & Practices Survey
In this survey, respondents share how and where they are sending their
transferring employees, the challenges they are facing, and the solutions they
are employing.
2014 Survey report
Download the report:
http://guidance.cartusrelocation.com/research-and-trends-2014-globalmobility-policies-and-practices-survey.
TRENDS IN GLOBAL RELOCATION
TalenT
ManageMenT
and the Changing assignee Profile
2013 Talent Management and the Changing Assignee Profile Survey
In this survey, respondents provide insight into the talent management aspects
of their mobility programs and how these aspects are influenced by the profile of
today’s assignees.
2013 Survey report
Download the report:
http://guidance.cartusrelocation.com/research-and-trends-2013-talentmanagement-report.
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Industry Profiles
To see how your program stacks up against your industry peers, email us at
trustedguidance@cartus.com to request industry-specific profiles for the Global
Mobility Policy & Practices survey or the Talent Management and the Changing
Assignee Profile survey.
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