Guidelines to help you rethink [or confirm] your global mobility policy
Did you know?
In recent years, the number of global mobility policies per organisation has increased – from an average of 5.3 in 2019 to 6.5 in 2022.[1]
And no wonder. Organisations are reviewing their policies to address evolving working practices, workforce mobility trends, economic developments, and increased demand for flexibility from relocating employees, among other factors.
If you are an HR professional – or if you manage global mobility policies for your organisation –you may wonder how your relocation benefits compare to global trends.
Read on to learn about the current challenges organisations are facing when relocating employees and trends in their mobility policy responses.
On this page:
Temporary accommodation: Supply shortage
Permanent accommodations: Rising costs
Household goods shipping: Is it included in most relocation packages?
Language and cultural training: Going digital
Partner support: Professional support or cash in lieu
Demand for temporary accommodations plunged during the pandemic, and many serviced accommodation providers reduced inventory. Due to a subsequent post-pandemic surge in business travel and relocation, demand for temporary housing now significantly outweighs supply.
This supply and demand imbalance has been exacerbated by delayed international shipping times, which leave assignees lingering in temporary housing whilst awaiting their household goods shipments. According to SilverDoor, the average length of stay increased from 33 to 42 nights between 2021 and 2022.
Everyone feels the pinch. Relocating employees encounter a lack of choice in their preferred location. At the same time, employers may experience increased costs due to high demand.
However, few organisations are making substantive changes to their temporary accommodation policies for fear of setting long-term precedents now that may need to be unwound in the future.
● Planning for an extended temporary accommodation stay with worst-case scenario costs
● Managing extensions over and above the standard policy offering
● Providing alternative or supplementary offerings, e.g., furniture rental which allows an employee to move into a permanent residence whilst awaiting delivery of their household goods shipment
● Encouraging employees to secure rental accommodation whilst on look-see or business trips, thus avoiding temporary accommodations altogether
● Using furnished short-term lets in lieu of serviced accommodation for a period of up to six months
At the start of the pandemic, residents of many cities left in large numbers, creating excess supply and sending rents plummeting. The median asking rent in Manhattan fell by 21%, whilst rents in London dropped by 24%. The lifting of restrictions in all but a few countries has prompted many to return, with companies requiring employees to be in the office at least part of the week.
As a result, demand for housing in many major cities now outweighs supply, and rents have risen steeply.
Sample increases in long-term rental costs year-over-year (YoY)
London 14%
Manhattan 10%
Berlin 18%
Dublin 10.6%
Dubai 10% – with desirable areas even higher: The Palm 36%, Jumeirah Park 25%, and the Lakes 21%
● Maintaining a traditional home search benefit in employer-driven assignment policies
● Using an expert home search consultancy to identify properties legitimately available on the market thus avoiding unscrupulous landlords and agencies
● Offering flexibility in housing allowances, consulting with a data provider and relocation management company to establish an appropriate budget [2]
Over the course of the year, sustainability has become an increasingly emergent trend. It’s possible that over time, more organisations may start to adopt sustainability measures into policy benefits. For example:
● Encouraging or even requiring assignees to live in energy-efficient properties
● Utility allowances based on the cost of green energy providers
● Utility support limited to efficient energy usage levels for the given country location
● Sustainable car fleets requiring home charging points for electric vehicles
The cost of international shipping and delays in transit have been well-documented over the past few years. Whilst freight costs have fallen on the whole, fuel prices remain high, labour shortages remain, and industrial action continues to disrupt port operators.
In a survey conducted by Sterling Lexicon and the RES Forum in 2022, 11% of respondents indicated that they have adjusted shipping allowances, whilst 16% have eliminated the benefit completely.
● Household goods shipping as a flexible benefit, with cash in lieu or a furniture allowance being offered (overwhelmingly the most popular approach)[3]
● Increased use of air shipments for some, whilst others are re-evaluating the use of air freight due to high costs and low sustainability ratings
● Excess baggage allowances in place of air freight
● Increased number of organisations willing to support for discard and donate services
● Increased number of families moving with domestic pets, with support varying from full pet relocation services to capped reimbursement of related costs
Language training was one of the first mobility benefits to be digitised, and this shift has been largely positive for both employees and employers. Employees and their families enjoy increased flexibility and employers incur lower costs due to the shift towards online learning.
Language training support may vary from a cash allowance for an off-the-shelf digital product to a full blended learning approach for the whole family.
The importance of cultural adaptation is often grossly undervalued, and cultural training often falls victim to managers attempting to manage the cost of an assignment. Many organisations still offer the service to the employee and relocating family – especially where there are obvious cultural differences between the home and host locations.
Like language training, the service can be delivered digitally, as a face-to-face training course or a blend of the two.
Dual career households are more commonplace now than ever, and organisations need to account for this when acquiring, re-deploying, and retaining talent. Terminology such as ‘trailing spouse’ has become anachronistic, with organisations recognising the need for flexibility in supporting the whole family.
Many policies provide employees with a choice of professional partner support services or cash in lieu.
Overseas work assignments are expensive, but the failure of an overseas work assignment can be even costlier. If you would like to schedule a policy review with us, reach out today.
We can help you right-size your global mobility policy with a careful eye towards managing costs – whilst providing the support your employees need to succeed.
[1] AIRINC’s 2022 Mobility Outlook Survey
[2] This process is easily managed through an exceptions process and budget-to-actual re-forecasting when the employer is assuming responsibility for the cost of the rent in its entirety. When the employer is only making a ‘contribution’ to rent, organisations have found policy application to be slightly more problematic.
[3] Employers may want to consider a holistic approach when considering how household goods shipments fit into a sustainable global mobility policy. See Stuart Jackson’s article, Does eliminating household goods shipping really make your global mobility programme more sustainable? featured on FIDI.com.