Companies are becoming more optimistic about their relocation initiatives, with expectations for 2011 nearly meeting pre-recession levels, according to a new survey.
More than one-half (61 per cent) of global companies expect to transfer more employees in 2011 than in recent years, according to the 2011 Global Relocation Trends Survey by Brookfield Global Relocation Services. This is up from 44 per cent in 2010 and is the highest level since 2007, when it was 68 per cent.
“Quite frankly, the reason it’s growing is companies can only hold off for so long with their global growth strategy and usually mobility of employees is critical to that,” said Scott Sullivan, executive vice-president of Brookfield in Woodridge, Ill. “They need to be aggressive in developing those markets outside their home headquarters.”
The United States, United Kingdom and China are the most frequently cited relocation destinations, and China, Brazil and India are the primary emerging destinations, found the survey.
Men between the ages of 40 and 49 working in construction and engineering or information technology are the most likely to take on a reassignment, found the survey, which polled 118 companies worldwide. Only nine per cent of employees aged 20 to 29 go on international assignments and just 18 per cent of international assignees are women, found the survey.
The most common type of assignment is long-term (one year or more) as 99 per cent of survey respondents have this policy in place. Eighty-four per cent said they have short-term assignments lasting three to 12 months in place followed by one-way permanent moves (46 per cent) and extended business travel for less than three months (39 per cent).
Every organization should have a relocation policy outlining all the regulations surrounding an assignment, such as the compensation, benefits and supports offered, said Brenda Chute, vice-president of corporate relocation at relocation management firm VRV Global in Calgary.
“You need to keep like-forlike. So, if Joe goes over and he’s cut one deal and Sam goes over and he’s cut another deal and they start talking, that’s not what you want to have happen,” she said. “You want absolute consistency in application and offerings.”
Employers should make sure the appropriate supports are available for the relocating employee and his family, such as moving costs, financial planning, cultural training, settlement services and destination support, said Stephen Cryne, president and CEO of the Canadian Employee Relocation Council (CERC) in Toronto.
“The role HR plays will be really important in making sure all the right supports are in place,” said Cryne. “Companies need to make sure that the benefits they’re providing are competitive in order to make sure they are attracting the right people.”
Just 74 per cent of survey respondents offer cross-cultural preparation for re-assigned employees — the lowest percentage in the history of the report, said Sullivan. Cross-cultural training should be mandatory, and employees should participate while in their home country, before they leave, and again once they arrive at their new location, he said.
“The training should walk an employee through understanding the culture they’re coming from against the culture they’re now going to be hosted in and look at the differences in those cultures, their values and behaviours and try to understand why things are done differently,” said Sullivan.
Sending employees on a relocation assignment can have many positive effects for an organization. It helps develop internal talent through understanding international business, learning how to solve complex global problems and working with different cultures, said Cryne.
“I think it’s a staple, frankly. The key and importance for relocation is it helps companies to expand their global mindset,” said Sullivan. “By moving those people around the world, they then act as ambassadors and can bring that understanding and knowledge back into the core of the company.”
Relocation assignments also help to develop management expertise, he said. Companies are realizing they have a managerial skills gap in working with international markets so they are investing in their younger professionals and sending high potentials to other locations, he said.
Then, they come back understanding the business of the company in its most important markets and can take on a senior leadership position.
Offering relocation options also bodes well for retention, said Chute.
“If the organization treats that transferee really well from the beginning, then that individual is more committed and not as easily poached from a competitor, which is going on all the time,” she said.
Only eight per cent of survey respondents said they measure the return on investment (ROI) of relocation assignments. With the average cost to relocate an employee around $100,000, all employers should be measuring this, said Cryne.
And one of the most important things HR needs to consider is repatriation, said Sullivan. Seventy-four per cent of survey respondents have a repatriation policy in place, but only 14 per cent link it to career management.
“Repatriation planning is critical to ensure whatever the skills that were learned on that assignment are leveraged and recognized and valued and brought back into the company so they don’t lose that person and lose that investment,” he said.
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