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Industry Profile

DOMESTIC U.S. RELOCATION POLICY & PRACTICES

21

07

OIL & GASPetroleum Products, Gasoline

CARTUS | 2017 DOMESTIC U.S. POLICY & PRACTICES SURVEY | INDUSTRY PROFILES: OIL & GAS 2

I N D U S T R Y P R O F I L E S : O I L & G A S

Industry Profiles examine the ways that individual industries approach key program practices and assignment policy features, based on data gathered in the

2017 Domestic U.S. Relocation Policy & Practices Survey.

Seven percent of the 141 respondents to Cartus’ 2017 Domestic U.S. Relocation Policy & Practices survey are companies in the Oil & Gas industry. Volume concentrations for Oil &Gas companies differed from companies overall, with the highest concentration of moves split over both ends of the spectrum (less than 25 and greater than 1,000 moves per year). The gender of transferring employees was 72% male.

OVERVIEWThe impact of an extended downturn of crude oil prices has had an effect on the Oil & Gas industry. Price improvements will be sluggish, and supply hampered by the constriction in reserves due to the cutbacks of development projects during the past several years. The collapse in oil prices began in 2014 and set off a series of cost-cutting measures and business reductions that included major projects being deferred or cancelled, reductions in workforce, and companies seeking efficiency improvements. In the current market, slight oil price gains are being seen due to a rebalancing of the fundamentals of supply and demand.

Relocation PolicyRelocation costs and mobility program tracking were reported to be the biggest challenges being faced by 60% of Oil & Gas sector respondents. Surprisingly, 44% of Oil & Gas companies utilize a single policy structure. Typically, a challenging destination location, or a need for high technical skills, is the key driver for relocation for the Oil & Gas sector. The percentage of Oil & Gas sector companies with four or more tiers in their program was just about half that of overall companies (33% versus 61%). When looking at how policy tiers are defined, 81% of Oil & Gas sector companies defined tiers by employee level, five percentage points ahead of all other industries at 76%.

The primary home sale program offered by Oil & Gas sector respondents is the Guaranteed Buyout, with 67% of companies offering it. The rationale for who receives the Guaranteed Buyout program is split equally between employee level, hire status, and all homeowners. This highlights the need for a generous program to attract the appropriate talent for jobs in this sector.

Sixty-three percent of companies offer some level of loss on sale assistance for employees in a loss situation related to the sale of their home. The majority (60%) cover 100% of the loss, nearly twice as many companies in all other industries (34%).

The collapse of oil prices brought on cost cutting

measures for the Oil & Gas sector, including deferral or cancellation of major

projects, reductions in workforce, and efficiency

improvements.

The fact that the primary home sale program

offered by Oil & Gas sector respondents is

the Guaranteed Buyout, highlights the need for a generous program to attract talent for jobs in

this sector.

3 INDUSTRY PROFILES: OIL & GAS | 2017 DOMESTIC U.S. POLICY & PRACTICES SURVEY | CARTUS


High Cost AreasSixty-three percent of companies offer cost of living assistance via a formal policy for those moving into high cost areas, more than twice as often as companies in all other industries (27%).

Short-Term and Rotational AssignmentsEighty-eight percent of Oil & Gas sector respondents use short-term assignments, and 62% offer rotational assignments. Sixty percent of the respondents in this sector anticipate an increase in rotational assignment activity in the next two years. This may be due to the ability to reinstitute some of the previously cancelled or deferred projects. It may also be an indicator of the need for high technical skills developed in a rotational “training” program. And 40% of Oil & Gas companies that have a rotational assignment program have a separate policy in place.

Talent ShortagesWhen asked how they are addressing talent shortages, 100% of Oil & Gas sector companies are looking to recruit from other countries.

Policy Comparison GridThis grid reflects the key elements of relocation challenge and policy, comparing Oil & Gas companies with other industries and highlighting significant differences between the two.

CHALLENGES

Relocation Challenges Oil & Gas All other industries

Relocation cost 60% 57%

Mobility program tracking 60% 9%

Measuring return on investment (ROI) 30% 30%

Need for more flexibility in relocation policy 30% 28%

Real estate market 30% 28%

Recruiting and talent development 10% 25%

High cost areas 10% 40%

POLICY

Response Oil & Gas All other industries

Single 44% 5%

Tiered 34% 75%

Menu-driven 11% 11%

Core-flex 11% 9%



Drivers of Flexible Policy Approaches Oil & Gas All other industries

Cost control 75% 70%

Reducing policy exceptions 75% 41%

Changing employee expectations (Gen X, Gen Y, Millennials, etc.)

75% 36%

Changing employee needs (family, spouse, elder care, etc.)

50% 39%

Attracting qualified candidates 25% 46%

CORE-FLEX POLICY

Primary Core versus Flex Elements

Oil & Gas All other industries

Core Flex Core Flex

Miscellaneous allowance 57% 43% 100% 0%

Tax assistance 57% 43% 100% 0%

Final trip 50% 50% 50% 50%

Household goods shipment 44% 56% 100% 0%

Temporary living 33% 67% 50% 50%

House hunting 29% 71% 50% 50%

Storage of household goods 22% 78% 75% 25%

Return trips 17% 83% 50% 50%

Rental assistance 14% 86% 50% 50%

Duplicate housing 13% 87% 0% 100%

Car shipment 13% 87% 75% 25%

Guaranteed buyout 0% 100% 25% 75%

Buyer Value Option 0% 100% 25% 75%

New home purchase closing costs 0% 100% 25% 75%

Lease breakage 0% 100% 50% 50%

Home sale incentive 0% 100% 0% 100%

Loss on sale 0% 100% 0% 100%

Rationale for Determining Core & Flex Elements

Oil & Gas

All other industries

Budget 100% 45%

Employee level 75% 55%

Move type (e.g., homeowner, renter) 75% 49%

Move purpose 0% 17%



HOME SALE

Primary U.S. Home Sale Program Oil & Gas All other industries

Guaranteed offer/buyout 33% 27%

None 22% 13%

BVO with sunset (guaranteed offer after a set period of time)

22% 12%

BVO without sunset 11% 40%

Direct Reimbursement 11% 7%

By exception 0% 1%

Changes in Past Two Years to Home Sale Policy/Program

Oil & Gas


No 45% 63%

Yes—policy design—added/changed existing program options or core-flex policy provisions

11% 20%

Yes—changed home sale program type from buyout to BVO

11% 3%

Yes—policy design—added/changed tiers 0% 19%

Yes—added or changed lump sum policy 0% 8%

BUYER VALUE OPTION


Offer BVO 33% 67%

Sunset Clause for BVO Oil & Gas All other industries

No 100% 74%

Yes 0% 26%

GUARANTEED BUYOUT


Offer guaranteed buyout 67% 50%

Eligibility Determined for Guaranteed Buyout program


By level 34% 69%

By hire status 33% 19%

All homeowners 33% 9%

By exception 0% 2%



LOSS ON SALE

Offer Loss on Sale Support Oil & Gas All other industries

No 37% 42%

Yes, varies by employee level 25% 24%

Yes, for all employees 25% 10%

Current employees only 13% 6%

Yes, offer on exception basis only 0% 15%

Case-by-case 0% 4%

RENTER-LEASE CANCELLATION

Offer Lease Cancellation Support Oil & Gas All other industries

Yes 100% 81%

Yes, by exception 0% 9%

No 0% 9%

HIGH COST AREAS

Allowance for Higher Living/Housing Costs Oil & Gas All other industries

Yes, we provide COLA via a formal policy 63% 27%

No, we don’t provide COLA 38% 58%

Yes, we offer on a case-by-case basis 0% 10%

Reflected in compensation 0% 4%

Increases in lump sum or miscellaneous expense allowance (MEA)

0% 1%

Yes, we provide COLA via a formal policy excluding new hires

0% 5%

Offer Mortgage Subsidy Oil & Gas All other industries

No 88% 76%

Yes 12% 21%

Yes, by exception only 0% 3%

Offer Rental Subsidy Oil & Gas All other industries

No 100% 82%

Yes, depends on employee level 0% 8%

Yes, for all renters 0% 5%

Yes, by exception 0% 5%



SHORT-TERM ASSIGNMENTS

Organization Uses U.S. Domestic Temporary/Short-Term Assignments

Oil & Gas


Yes 88% 61%

No 12% 39%

Change Expected in Use of U.S. Domestic Temporary/Short-Term Assignments Over the Next Two Years

Oil & Gas


Increase 29% 42%

Stay the same 57% 52%

Decrease 14% 6%

ROTATIONAL ASSIGNMENTS

Use of U.S. Rotational Assignments Oil & Gas All other industries

Yes 62% 34%

No 38% 66%

Change Expected in Rotational Assignments Over Next Two Years

Oil & Gas


Increase 60% 37%

Stay the same 40% 58%

Decrease 0% 5%

Formal Policy for U.S. Domestic Rotational Assignments

Oil & Gas


Yes 40% 54%

No 40% 30%

No, rotational assignments are done on a case-by-case basis

20% 16%

INTERNS

Relocation Program for Interns Oil & Gas All other industries

No 50% 65%

College interns 50% 31%

MBA/Graduate interns 13% 22%



TALENT MANAGEMENT

Strategies for Overcoming Talent Shortages Oil & Gas All other industries

Recruiting from other countries 100% 10%

Enriching relocation packages across the board 0% 2%

Enriching relocation packages on a case-by-case basis/approving exceptions

0% 23%

Sign-on bonuses 0% 54%

More local training 0% 13%

More focus on intern programs 0% 40%

Intensified campus recruiting 0% 48%

Offshoring/outsourcing 0% 13%

Targeted recruiting 0% 73%

Offering short-term/temporary assignments 0% 6%

Company Using Different Approaches to Manage Millennials


No 75% 75%

Yes 25% 25%

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Cartus’ Industry Profiles series contains the following eight industry sectors. For these reports

and other Cartus research studies, including information on policy comparisons by industry,

please contact your Cartus representative or visit our Resource Hub on cartus.com.

Industry Description

FINANCIALBanking, Finance, Insurance, Real Estate

PHARMAPharmaceuticals, Healthcare

CONSUMER GOODSConsumer Goods, Food & Beverage

RAW MATERIALSEnergy, Utilities, Mining, Forest Products

MANUFACTURING/ CONSTRUCTIONManufacturing, Machinery, Aerospace, Instruments, Construction, Engineering

SERVICE/MEDIABusiness Services, Hospitality, Entertainment, Telecommunications, Media

OIL & GASPetroleum Products, Gasoline

TECHTechnology, Electronics, Computers, Software

Survey Report

DOMESTIC U.S. RELOCATION POLICY & PRACTICES

21

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oil & gas - cartus.com · faced by 60% of oil & gas sector respondents. surprisingly, 44%...

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