Costs, employee demands biggest relocation challenges

One-fifth of employers match benefits to employee level: Survey
||Last Updated: 01/23/2012

The three most significant challenges for international corporate relocation managers are company costs (68 per cent), employees' changing expectations (45 per cent) and emerging markets (40 per cent), according to a survey of 116 global corporations.

Also challenges are “control and compliance” (31 per cent) and return on investment (30 per cent), found Cartus, a global relocation company based in Danbury, Conn.

To deal with the problems of costs, 32 per cent of respondents have instituted formal cost estimation and budgeting procedures on transferees, and 21 per cent have aligned relocation benefits to more closely match employees' levels within the organization — an approach that creates different policies for different employee levels (also known as "tiering") and can deliver improvements in the relocation spend, said Cartus.

Employee expectations and entitlement issues are likely coming to the forefront due to a combination of factors, said John Arcario, executive vice-president at Cartus.

"Traditional, benefit-laden expatriate packages are less common now because the focus on costs is making companies more savvy," he said. "Many companies are offering global assignees very targeted benefits packages. At the same time, employee demands are increasing, but they appear to vary by generation."

Generation Y or millennial assignees may not yet have families and households but they have high expectations and are very comfortable negotiating the benefits that come along with an assignment, said Arcario. On the other hand, more seasoned employees who may be the best fit for the job are trying to balance an international assignment opportunity with their financial concerns and the needs of their employed spouses and high-school-age children.

“It's quite apparent that although tiering and new assignment types, such as short-term and commuter assignments, have led to increased flexibility, they have also created more opportunity for negotiation,” he said.

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