Smaller businesses remain leery about undertaking the cost and hassles of transferring employees, according to an annual survey by Atlas Van Lines that is closely watched by the relocation industry.
In its 160-page survey of corporate relocation plans ”“ with more than a third of responses from companies with fewer than 500 employees ”“ Atlas said overall business optimism is reminiscent of 2004 as the economy recharged following the dot-com bubble bursting.
The survey is dominated by services and manufacturing companies, which combined account for more than seven in 10 respondents. Atlas queries companies on relocations for employees at every end of the spectrum, from senior executives to fresh hires out of college.
The survey does not attempt to drill down to trends at the state or regional level, except to note the most frequent destination for employees who work at the companies that were surveyed ”“ this year the Northeast was the No. 2 destination after the Midwest, although among mid-sized companies the Northeast was the top draw.
An increase in employee transfers
In a positive development for relocation services providers like Danbury, Conn.-based Cartus Corp., two-thirds of poll respondents said they would outsource the employee transfer process this year, up from 55 percent in 2010. For its part, at deadline the Realogy Corp. subsidiary had yet to release an update to its own relocation policy survey, last conducted in April 2010. Cartus assisted in some 148,000 employee moves for 1,500 corporate clients last year.
Nearly a third of companies polled by Atlas expect to increase employee transfers this year and far fewer expect to decrease transfers compared to the previous two years. That compares to 2010 returns that suggest half of large companies and a third of mid-sized companies increased relocation activity from the year before.
“Our survey respondents are focusing on growing their businesses and believe there will be abundant opportunity for expansion and increased revenues in 2011,” said Jack Griffin, president of Atlas World Group, the parent company of Atlas Van Lines, in a prepared statement. “The view looks much better today than it did one year ago.”
At the largest companies, growth was cited as the primary reason for undertaking employee transfers, while mid-size companies most often cited the need to relocate workers due to promotions or resignations.
Smaller businesses are less optimistic ”“ about a quarter of them expect to increase transfer activities this year, up from about 20 percent in 2010, but only a fifth expect to cut relocation plans and budgets, down from a third.
Incentives for relocations
The question becomes how willing workers are to go along with the plan, given the odds of getting what they would hope for in any sale of their home. Nearly 60 percent of companies reported that they had employees decline a relocation last year. Housing and mortgage concerns were the top reason for the third straight year, save for the smallest companies for whom family ties and issues were a more important criterion.
To ascertain if economic and market pressures impact assignment duration, Atlas posed two new questions this year. Most companies reported no effect on the duration of assignments ”“ for those that did report an impact, however, the trend was away from long-term assignments and toward short stays.
Two thirds of companies polled offered incentives to encourage relocations in 2010, about even with those that did so the previous year. Extending temporary housing benefits was the most popular, followed by relocation bonuses and protection against any loss on the sale of a home. Smaller companies were the least willing to offer loss-on-sale protection, however, with just one in five doing so versus more than half of mid-size and large companies.
About nine out of 10 companies said extra incentives frequently convinced an employee to relocate, similar to the past two years.
