As the recession deepened, corporations cut back on employee transfers, according to a recent survey by Cartus Corp. ”“ particularly in the case of older workers or those with families, for whom relocation costs are deemed greatest.
Danbury-based Cartus helps companies manage the relocation of employees and families, and is a subsidiary of Parsippany, N.J.-based Realogy Corp.
With the U.S. National Foreign Trade Council (NFTC), Cartus surveyed nearly 200 relocation professionals to deduce the latest trends, in advance of the industry gathering in mid-May at the National Relocation Conference in Orlando, Fla.
The Cartus/ NFTC survey revealed that although 30 percent of respondents saw decreases in their overall assignment activity over the past three years, they nevertheless expect growth in all assignment types. Except for the most-costly, long-term assignments, six professionals anticipate growth in relocation activity for every one readying for further decline.
“Given the stiff economic headwinds that companies have faced, a decrease in overall assignment activity since 2007 is understandable,” said John Arcario, executive vice president at Cartus, in a prepared statement. “The news is the broad expansion in approaches that companies are taking by deploying talent globally to achieve their corporate objectives.”
The study also showed that companies are replacing more traditional assignment types with newer, more flexible approaches. More companies reported a drop in long-term assignments than a gain over the past three years, and short-term assignments appear increasingly to be used for career and talent development ”“ a goal traditionally associated with long-term assignments.
“The greater use of short-term and other assignment types offers a way to navigate between the need for globalization and the ability to pay for it,” said William Sheridan, NFTC vice president.
Worldwide ERC, a trade group representing Cartus and other relocation companies, said a similar bias toward short-term assignments has emerged in its own industry surveys of late. Just 3 percent of assignments last longer than a year, Worldwide ERC determined, with more than half lasting less than six months.
Whereas workers under age 30 accounted for 19 percent of relocation assignments in 2007, that number rose to 29 percent this year, according to Cartus. The jump was equally noticeable among single workers ”“ whereas they accounted for 29 percent of transfers in ”™07, in 2010 they were involved in 42 percent of transfers.
Those numbers can be boiled down to a simple reason, according to Cartus ”“ it costs far more to move a family than an individual. That is also driving a trend toward more assignments “going local” ”“ with compensation and benefits calculated in local currencies rather than U.S. dollars.
Both localization and permanent transfers, the two assignment types that reflect this approach, are anticipated to increase over the next two years by nearly half of respondents.
“While companies still need to ensure they have the right talent in the right places, they are employing workforce strategies that move away from traditional, long-term expatriate packages and trend toward modified benefits and pay scales,” Arcario said.
In the past few years, Worldwide ERC and others have documented an increasing trend of “stealth expatriates” ”“ workers that receive continual extensions of what begin as short-term assignments, essentially exposing them to a long tour of duty abroad without commensurate benefits.
