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Survey Report

D O M E S T I C U . S . R E L O C A T I O N P O L I C Y & P R A C T I C E S

21

07

C O N T E N T S

Introduction & Objectives ................................................ 3

Key Survey Trends and Insights ....................................... 5

2017 Domestic U.S. Relocation Policy & Practices: Detailed Survey Findings ............................................... 11

Respondents .................................................................. 46

Related Cartus Resources .............................................. 47

CARTUS | 2017 DOMESTIC U.S. RELOCATION POLICY & PRACTICES SURVEY 3

I N T R O D U C T I O N & O B J E C T I V E S

Cartus’ 2017 Domestic U.S. Relocation Policy & Practices survey was conducted in April, 2017 and elicited responses from 141 mobility managers. This study focuses on the trends and challenges in U.S. domestic relocation, best practices organizations are employing, and how companies are facing changes in relocation. This report covers key topics including flexible policies, support for homeowners and renters, temporary and rotational assignments, and talent management.

All major industry groups are included, and the respondents are companies representing more than 10 million employees. We would like to extend a special thank you to the 141 mobility managers that took the time to share their valuable insights and experiences with us. This report is largely the result of their hard work and collaboration.

RESPONDENT DEMOGRAPHICSThe following charts and information cover the survey’s complete areas of content and are designed to reflect the actual findings of the survey in detail. Where comments were requested, we have included representative examples.

RESPONDENTS BY INDUSTRY SECTOR

Respondents by Industry Sector

Chart 8

Manufacturing/Construction

30%

Service/Media

6%

Tech12%

Finance14%

Consumer Goods20%

Oil and Gas7%

Pharma9%

Raw Materials

2%

NUMBER OF DOMESTIC U.S. MOVES ANNUALLY BY RESPONDENTS

0-25

26-100

101-250

251-500

501-1,000

1,001+

15%

32%

12%

8%

19%

14%

CARTUS | 2017 DOMESTIC U.S. RELOCATION POLICY & PRACTICES SURVEY4

DEFINITIONS: DOMESTIC U.S. RELOCATIONSThe policy types explored include the following:

� Permanent Relocation: A permanent, one-way relocation from one U.S. location to another, with a policy structure that may be:

– Tiered—level of benefits varies based on pre-determined basis; may be based on employee level, job title, housing status, and hire status.

– Core-flex—certain benefits are core (all similar employees receive the same level of benefit), and then additional benefits (flex) are added based on criteria (business selection, level of employee, etc.)

– Menu-driven—developed from a list of benefits, typically selected by the business based on factors of employee need, level of employee, budget, etc.

� Temporary U.S. Assignments: Long-term (duration over one year)/Short-term (duration of less than one year).

� Lump Sum-Only Policy: Employee is provided with cash in lieu of a supported policy. This is not to be confused with a component of a policy whereby a lump sum amount is paid in lieu of reimbursing for certain expenses, most commonly for the taxable travel and living expenses (e.g., home finding, temporary living).

� Rotational Assignment: A series of temporary U.S. domestic assignments in which the employee may make several “rotations” to multiple locations. This policy type is most commonly used for employee development.

� Interns: Program for recent college graduates, typically a short-term assignment, and the level of benefits may differ depending on whether the intern is an undergraduate or MBA/Graduate student.


Mobility practitioners have long struggled with discussions on measuring return on investment (ROI) and meeting the immediate needs of the businesses they support. It is evident in the results of Cartus’ 2017 U.S. Domestic Relocation Policy & Practices survey that this job will likely become even more complex as companies attempt to balance the various, and sometimes conflicting, factors of cost, talent, and the growing focus on employee experience.

The convergence of these factors opens the door for further data analytics, which will allow for more vigorous management of the mobility process. Where mobility managers used to employ a very tactical approach to relocation, now, with greater access to robust data, it is increasingly possible to link mobility to talent management and overall business strategy. This allows mobility managers to more easily manage risk, compliance, and cost efficiencies. In addition, robust reporting can provide mobility teams with a better understanding of the impact of relocation and assignments, which can be shared with the business lines and talent acquisition teams.

Most Significant ChallengesHistorically, U.S. domestic relocation programs have been driven by three main factors: regulatory, corporate culture, and budget/costs. The first major regulatory changes in the industry occurred due to the enactment of the Revenue Reconciliation Act of 1993, which substantially changed the moving expense deduction. Prior to the Act, most relocation expenses were considered tax deductible, and therefore excluded from the employee’s income. After the Act, the IRS regarded relocation assistance received from an employer, or the reimbursement of certain relocation expenses, as income to the employee and, therefore, taxable.

Companies are attempting to balance cost, talent,

and a growing focus on the employee experience.

Key Survey

T R E N D S A N D I N S I G H T S


As a result of this regulation, companies revised their policies, and this increased the overall costs of a relocation. Today, tax assistance is in the top three highest component costs of a relocation, preceded by home sale and shipment of household goods. Companies that choose not to support the tax liability by providing tax assistance to the employee have weakened the overall competitiveness of their programs.

Looking back to our 2009 U.S. Domestic Relocation survey, the focus was on capturing the pulse of relocation managers in light of the challenges in U.S. real estate markets and lending difficulties. Over the last eight years, the focus has shifted from the real estate market and the challenges of the U.S. economy to relocation cost and related factors. The focus on relocation cost encompasses cost control, policy and program design, and reporting relocation data. These factors also have an impact on talent management and the employee experience, themes that were repeated throughout the survey. As the chart below illustrates, relocation cost and the need for flexibility both increased as challenges from 2009, while the

real estate market decreased significantly as a challenge. Recruiting and talent development was rated just about the same as a challenge.

Challenge

2009 Survey

2017 Survey

Percentage Point Increase

2009-2017

Relocation cost 52% 65% +13

Real estate market 79% 29% -50

Need for flexibility 8% 28% +20

Recruiting and talent development 25% 24% -1

Flexibility and Program DesignInitially, companies structured their relocation benefits in a manner similar to other benefit programs—one program for all employees. This practice has evolved as relocation managers received

increased pressure from the business to inject more flexibility to address the different employee levels and functions that require different policy treatment. This in turn requires managers to strike a balance between having too few policies to capture the bona-fide differences, and too many policies, making it difficult to distinguish between them.

According to the 2017 survey, the majority of companies (80%) said that they tier their program, regardless of how they consider the overall structure to be defined. To accommodate the wide range of employee needs, it is common for even core-flex or menu-driven programs to have

multiple layers of differentiation, and the majority have “tiers”, most commonly determined by employee level.

It is common for even core-flex or menu-driven programs to have multiple layers of differentiation, most commonly determined by employee level.

The focus of relocation managers has shifted from the real estate market and the challenges of the U.S. economy to a broader set of factors, including relocation cost.


FLEXIBILITY IS IN THE EYE OF THE BEHOLDER

It was clear from the responses to the survey question on utilization of flexible policies, that the definitions of flexible—and the opinions as to whether their policies actually were flexible—were varied. Fifty-seven percent of companies responded that they considered their policies to be flexible, with 65% of those companies utilizing a tiered policy structure. The remaining 43% of companies that did not consider their program to be flexible also utilized tiered policies, with the determination of the tier split between employee level and move type.

The reason for this may stem from differences in the need for flexibility between companies. As business units continue to request flexibility in policies, relocation managers who are attempting to balance consistency or costs with the business’ needs are adding more tiers into their policies (58% had four or more tiers). However, as the pressure on flexibility increases, even adding more tiers may not deliver enough malleability. So, while survey results show only 9% of respondents currently have core-flex policy structure, we’re seeing an increased interest in the approach as companies redesign their programs to inject even more flexibility.

If designed well, a policy aimed at meeting the specific needs of employees or businesses can actually provide enhanced benefits at an overall lower cost. Flexibility does not come without its downsides, however. A common theme among survey respondents with any of the non-traditional flexible policy approaches was the need to constantly monitor and train the business contacts and users on the program, making the administrative duties more cumbersome. Flexibility also challenged the ability to accurately budget the cost of relocation.

Mobility professionals have a unique perspective, based on their mandate of developing programs to balance the needs of the employee, the budget/cost constraints of the business, and equitable treatment of similar employees.

Home Sale ProgramsThe comparison of home sale programs in Cartus’ 2009 and 2017 surveys illustrates the increased focus on costs, with more companies moving away from the taxable direct reimbursement approach and into more tax-favorable programs. The period is marked by the rise of the Buyer Value Option (BVO) program, which was a response to the high costs of the more traditional Guaranteed Buyout (GBO) program. The 2017 results also demonstrate that 44% of the participants do not incorporate a “sunset” period (guaranteed offer after a set time period) in conjunction with their BVO program. As a matter of course, it is recommended that companies consult with their legal counsel regarding this topic.

Some companies have moved away from offering GBO program to all employees; however, there is still a need to provide competitive programs, especially for corporate leadership being asked to move. This ensures that some form of company-assisted programs are available. The swan song for the company buyout program has not yet come, nor may it truly ever come, due to the talent needs of organizations.

Eligibility for home sale coverage varies by hire status, with current employees (68%) more often offered company-assisted home sale, or a higher level of benefit, than newly hired employees. In addition to hire status, employee level was a determining factor in the type of program extended.

The 2017 survey showed an increased focus

on costs, with more companies moving away

from the taxable direct reimbursement approach

and into more tax favorable programs.

A well-designed policy, aimed at meeting

the specific needs of employees or businesses,

can actually provide enhanced benefits at an

overall lower cost.


Home Sale SupportIn Cartus’ 2009 survey, companies were aware of the challenges driven by the real estate market, but reluctant to make aggressive sweeping changes, in part due to an understanding of the typical pendulum swings in real estate. Therefore, the changes made were minor in nature, but have taken root as, even with improving markets nationally, companies continue to find value in strategies to assist employees in selling their homes. This is likely to continue to be the case, as all real estate is “local,” and market recovery is often uneven. The measures deemed to be the most effective in helping employees sell their homes include:

� Required marketing assistance with mandatory broker registration and mandated list price restrictions.

� Home sale incentive or bonus program.

The number of companies offering loss on sale support has diminished from our 2009 survey; not surprising considering the generally improving real estate market. The current trend is to have the employee involved in the situation when it occurs; for example, in 2009 companies generally reimbursed the entire loss on sale, while most employers now cover only a percentage of the loss.

Policy Types Gaining Traction in Domestic U.S. Relocation

LUMP SUM PAYMENTS

Lump sum payments have been in use for many years to varying degrees. They were initially adopted by companies looking for ways to reduce processing costs. During the late 1990s, when companies began to look closely at cost containment, there was a shift away from lump sums. However, as other benefits were reduced or eliminated, exception requests increased and companies began moving back to, or into, lump sum payments, usually for prescribed benefits. These were seen as a trade-off, and a mechanism to allow employees to make decisions based on personal situations, thereby increasing employee satisfaction and reducing administrative activities.

LUMP SUM-ONLY POLICIES

While the above is true for lump sum payments when paid as part of a relocation policy, lump sum-only policies can have the converse effect. This is another area in which, while the business may push for the payment of a lump sum for all relocation costs, primarily for the ease of budgeting and fixing costs, mobility professionals are acutely aware of the pitfalls of such a practice. The difficulties lie in inconsistent application and lack of support in critical areas, which can negatively impact the employee experience and cause an unfavorable tax position.

Lump sum-only policies for all relocation services are used by only 29% of respondents, with 70% of those companies providing tax assistance on the payment. Lump sum-only policies have typically been utilized mostly for entry-level, newly hired employees with little to no experience, or recent college graduates, interns, and renters, although there is an increasing move to offering them to higher level employees, as well.

Another 37% of companies used a lump sum payment as a component of a more robust program. The extent of additional support ranged from providing the employee with access to resources (real estate assistance, temporary living suppliers, contacts at van lines, etc.) to a company supported movement of household goods (either self-service or limited van line).


TEMPORARY U.S. ASSIGNMENTS (LONG- AND SHORT-TERM)

Sixty-two percent of the survey respondents use short-term/temporary assignments for U.S. moves. Of those companies, 63% have a formal U.S. domestic short-term temporary assignment policy, with an additional 30% handling these moves on a case-by-case basis. The most frequent duration for these short-term domestic moves is four to six months. The survey did not indicate whether or not these assignments were used as a complement to the current program structure, or as an attempt to find alternatives to traditional permanent one-way relocations.

Temporary short-term assignments (less than one year) as well as temporary longer-term assignments (more than one year) will always have their place in U.S. domestic relocation programs for certain industries or companies. While assignments are typically used for a definitive business reason—project-based assignments, skills transfer, or training—more companies are using them for ongoing business needs. The major challenges with short-term assignments are finding affordable temporary living accommodations, tax and tracking issues, family and personal issues, and assignments costing more than anticipated. While companies may have good reasons for a temporary assignment that lasts longer than a year, the IRS considers these to be permanent assignments with resulting tax implications. The impact of work location and assignment duration should be discussed further when addressing the tax treatment of assignment costs.

ROTATIONAL ASSIGNMENTS

Thirty-six percent of survey respondents utilize rotational assignments, with 39% of those companies anticipating an increase over the next two years. Certain industries utilize rotational programs more than others, and they are most commonly seen in the financial and manufacturing sectors for leadership development.

The purpose most commonly stated for rotational assignments was career development (84%). The major challenges closely mirrored those for short-term assignments—finding adequate housing (43%) and rotational assignments being more costly than anticipated (39%).

INTERN PROGRAMS

When looking at the prevalence of intern relocation programs in the U.S., 32% of respondents said that they had a relocation program for college interns (with 79% of those companies having a separate policy in place), and 21% of respondents had relocation programs for MBA/Graduate interns (with 52% having a separate policy in place). With the current focus in the workplace on early talent, we expect that intern programs, especially MBA/Graduate programs, will continue to grow.

39% of companies anticipate an increase in

rotational assignments over the next two years.

62% of survey respondents use short-term/temporary

assignments for U.S. moves, and 63%

of those companies have a formal policy.


TALENT SHORTAGES

The 2017 survey is fairly consistent with our 2009 survey findings regarding the perception of talent shortages—the majority of respondents said that they were either not seeing an increase in talent shortages (41% in 2009 and 48% in 2017) or that talent pressures had increased only somewhat (45% in 2009 and 44% in 2017). In 2009, sign-on bonuses were the most used strategy (25%) for overcoming talent shortages. In our 2017 survey, targeted recruiting (65%) was named the number-one strategy used by companies to overcome talent shortages, followed by offering sign-on bonuses (48%). This can be seen as an indication that companies are understanding the importance of merging talent management strategies into their mobility practices.

ConclusionAs managers of U.S. relocation programs continue to explore ways to meet their companies changing needs, it is likely that the need to balance a superior employee experience, cost control, and talent development will drive a continued focus on flexible approaches. How companies choose to meet this pressure will always depend on their organization’s move patterns, culture, and demographics, but staying in touch with best practices from others can inform their next steps.


2017 Global Mobility Policy & Practices: D E TA I L E D S U R V E Y F I N D I N G S

Relocating Employee Profile ......................... 12

Challenges/Changes ...................................... 12

Policy ................................................................ 13

Core-Flex Policy .............................................. 15

Home Sale ....................................................... 16

Buyer Value Option (BVO) ............................. 18

Guaranteed Buyout (GBO) ............................ 19

Home Marketing ............................................. 20

Loss on Sale .................................................... 21

New Home Closing ........................................ 23

Home Owners to Renters .............................. 23

Incent to Rent .................................................. 24

Renter-Lease Cancellation ............................. 24

Spouse/Partner Career Assistance ................ 25

Lump Sum Policy ............................................ 26

High Cost Areas .............................................. 30

High Cost Areas—COLA ............................... 31

High Cost Areas—Mortgage Subsidy ........... 33

High Cost Areas—Rental Subsidy ................. 35

Temporary/Rotational/ Extended Business Travel .............................. 37

Short-Term Assignments ................................ 38

Rotational Assignments ................................. 41

Interns .............................................................. 42

Talent ............................................................... 44

Millennials ....................................................... 45


RELOCATING EMPLOYEE PROFILE

Gender 2017Male 70%

Female 30%

Age 2017Under 30 22%

30-39 31%

40-49 33%

50+ 14%

CHALLENGES/CHANGES

CHART 1: What are your organization’s most significant current challenges in relation to U.S. domestic relocation? (multiple responses possible)

Response Percentage

Relocation cost 65%

High cost areas 38%

Measuring return on investment (ROI) 30%

Need for more flexibility in relocation policy 29%

Real estate market 28%

Recruiting and talent development 24%

Mobility program tracking 13%

Other 4%

Additional respondent comments: � Exceptions.

� No relocation policy in place.

� Virtual workforce.

� Accurate cost tracking and transparency.

� Temporary housing.

� Employee retention.

� Business groups doing lump sums for ‘ease.’


CHART 2: What aspects of your U.S. domestic program are you most interested in improving? (multiple responses possible)

Response Percentage

Cost control 58%

Policy/program design 48%

Reporting of relocation data 41%

Recruiting and talent development 21%

Effectiveness of home sale and BVO programs 17%

Other 2%

Additional respondent comments: � Communication between relocation coordinator and relocating employee.

� Incorporating latest technologies to gain efficiencies.

� Smoother moves for the employee.

POLICY

CHART 3: How is your company’s domestic U.S. policy structure designed?

Menu-driven11%

Core-flex9%

Tiered80%

Chart 1:

Chart 9

CHART 4: How many policy tiers are there in your program?

Chart 2

Chart 10

Two tiers:12%

One tier:11%

Three tiers:19%

Four tiers:26%

Four+ tiers:32%


CHART 5: When asked if they consider their programs to be flexible, fifty-seven percent of U.S. relocation managers said “yes.” Following is a breakdown of the number of policy tiers for those respondents:

Chart 3:

Chart 11

Two tiers:15%

One tier:6%

Three tiers:16%

Four tiers:32%

Four+ tiers:31%

CHART 6: How is each policy tier defined? (multiple responses possible)

Response Percentage

Employee level 74%

Move type 61%

Move purpose 14%

Budget 10%

Not defined 2%

CHART 7: What is driving the need for more flexible policy approaches? (multiple responses possible)

Response Percentage

Cost control 63%

Attracting qualified candidates 45%

Reducing policy exceptions 42%

Changing employee needs (family, spouse, elder care, etc.) 40%

Changing employee expectations (Gen X, Gen Y, Millennials, etc.) 38%

Other 4%

Additional respondent comments: � Speed of deployment.

� Diverse businesses need more options.

� Creating more consistency of what is offered by managing how policies are flexed.

Is Your Policy Flexible?

Yes57%

No43%


CORE-FLEX POLICY

CHART 8: If your organization utilizes a core-flex approach, what are typically considered the primary core items, and what are considered flex items, for U.S. domestic moves? (percent of respondents)

Guaranteed Buyout

Buyer Value Option

New home purchase closing costs

Duplicate housing

Miscellaneous allowance

Household goods shipment

Storage of household goods

House hunting

Temporary living

Tax assistance

Car shipment

Rental assistance

Lease breakage

Home sale incentive

Loss on sale

Final trip

Return trips

CHART 9: What is the rationale for determining which elements are core and which are flex? (multiple responses possible)

Response Percentage

Employee level 58%

Move type (e.g., homeowner, renter) 52%

Budget 50%

Move purpose 33%

Other 12%

Additional respondent comments: � All elements are flex.

� Business decision.

� Compliance (tax is core for transfers).

� Needs of employee or candidate.

24%

23% 77%

71% 29%

73% 27%

52% 48%

54% 46%

59% 41%

79% 21%

51% 49%

45% 55%

46% 54%

21% 79%

11% 89%

59% 41%

36% 64%

76%

45%

47% 53%

55%

� Core

� Flex


CHART 10: What are the challenges of core-flex programs? (multiple responses possible)

Response Percentage

Inconsistent treatment 61%

Administration 50%

Budget 30%

Less cost savings than anticipated 9%

Other 2%

Additional respondent comment: � We have challenges in administering core-flex programs for executives.

HOME SALE

CHART 11: What do you consider to be your current primary U.S. home sale program?

Response 2009 2017

BVO without sunset 34% 44%

Guaranteed offer/buyout 29% 32%

BVO with sunset (guaranteed offer after a set time period) 8% 15%

Direct Reimbursement 24% 8%

Other 5% 1%

2009 2017

BVO Total 42% 59%

CHART 12: In the past two years have you made changes to your home sale policy or program? (multiple responses possible)

Response Frequency

No 62%

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

20%

Yes—policy design—added/changed tiers 17%

Yes—added or changed lump sum policy 8%

Other 7%

Yes—changed home sale program type from buyout to BVO 3%

Additional respondent comments: � Updated/modified benefits

� Tightened parameters:

– Restricting eligibility for home sale to highest tier

– Inspections

– More compliance to 11-steps


CHART 13: What types of homes do you exclude from your home purchase plan? (multiple responses possible)

Response Frequency

Mobile homes 86%

Farms 84%

Homes with excessive acreage 77%

Co-ops 74%

Synthetic stucco homes 68%

Short sales 67%

Homes in the process of foreclosure 63%

Homes with corrosive drywall 57%

Duplexes 41%

High-value homes 22%

Historic homes 19%

Other 7%

Additional respondent comments: � Vacant land.

� House boats.

� Income-producing property.

� Homes under construction or renovation, containing or near hazardous material.

� Properties that do not qualify for FHA, multi-family unless an employee owns both halves of a duplex.

� Condos that are not financeable.

� If a home doesn’t qualify after inspections.


BUYER VALUE OPTION (BVO)

CHART 14: Do you offer a BVO program? Chart 4:

Chart 12

Yes65%

No35%

CHART 15: How is eligibility determined for your BVO program?

Chart 5:

Chart 13

New hires9%

By exception5%

By level67%

All homeowners

19%

Breakout of “by level” responses:

Chart 6:

Chart 14

Executives only15%

Below management

13%

Management47%

Directors & above

25%


CHART 16: Do you have a sunset clause for your BVO?

Chart 7No

23%

Yes77%

CHART 17: When does the sunset clause kick in?

Chart 8

365 days22%

150 days6%

120 days6%

90 days39%

180 days16%

60 days11%

GUARANTEED BUYOUT (GBO)

CHART 18: Do you offer a Guaranteed Buyout? Chart 9

No49%

Yes51%


CHART 19: How is eligibility determined for your Guaranteed Buyout program? (multiple responses possible)

Response Percentage

By level 66%

By hire status 30%

All homeowners 11%

By exception 3%

Breakout of “by level” responses:

Response Percentage

Directors & above 41%

Executives only 33%

Management 26%

Breakout of “by hire status” responses:

Response Percentage

Current 68%

Experienced new hires 16%

Executive new hires 11%

New hire management 5%

HOME MARKETING

We asked relocation managers which measures their organizations have implemented to assist employees with selling their homes that they feel have been the most effective. Following were the most common responses:

� Requiring marketing assistance.

� Offering a home sale incentive.

� Setting list price restrictions.

� Providing loss on sale protection.

� Mandating network broker utilization.

� Offering a marketing allowance.

� Restricting other benefits (e.g., temporary living, storage).

� Other: providing buyer incentives, offering Guaranteed Buyouts to new hires, completing appraisals up front.


LOSS ON SALE

CHART 20: Do you currently offer loss on sale support?

Chart 10

Yes, varies by employee level

24%

Current employees only

7%

Case-by-case basis1%

No41%Yes, offer on

exception basis only

16%

Yes, for all employees

11%

CHART 21: What percentage of the loss on sale is covered?

Chart 11

75% - 99%17%

Up to a dollar cap

9%

20% - 49%4%

Case-by-case basis4%

100%38%

Varies by policy/

employee level17%

50% - 74%11%


CHART 22: If you have a cap on loss on sale, please indicate the amount.

Chart 12

$21,000 - $50,00025%

Percentage of original

purchase price8%

$51,000 - $100,0008%

$100,000 +6% Exception

2%

Varies by tier/policy level

29%

$20,000 and below

11%

No cap11%

CHART 23: Are capital improvements included in loss on sale? (multiple responses possible)

Response 2009 2017

No 66% 70%

Yes, limited to company-developed list 10% 13%

Yes, based on IRS list 13% 11%

Yes, by exception only N/A 9%

Varies by policy level/tier 11% 2%

CHART 24: Is loss on sale tax assisted?

Chart 13

Chart 21

No23%

Yes72%

Yes, but only on an exception

basis5%


NEW HOME CLOSING

CHART 25: Do you reimburse for new home closing costs?

Chart 14

Chart 22

No, do not reimburse

14%

Yes, flat amount3%

Yes, itemized list of costs61%

Yes, at a capped amount

22%

CHART 26: Does your company support current renters in purchasing a home in the new location?

Chart 15Yes, by

exception18%

No54%

Yes, via formal policy28%

HOME OWNERS TO RENTERS

CHART 27: Over the past two years, have you seen the number of home owning transferees choosing to rent in the new location vs. buy a home increase, decrease, or stay the same? Chart 16

Stay the same62%

Increase36%

Decrease2%


INCENT TO RENT

CHART 28: Does your company offer the transferee a financial incentive if they agree to rent (versus buy a home) in the new location?

Chart 17

No94%

Yes6%

CHART 29: How long do you offer the incentive for? Chart 18

1-3 years57%

One-time payment

43%

RENTER-LEASE CANCELLATION

CHART 30: Do you offer lease cancellation support?

Chart 19

No9%

Yes82%

Yes, by exception

9%


CHART 31: How long do you reimburse for lease cancellation?

Chart 20

Over 3 months

5%

Dollar cap1%

3 months or less88%

Varies4%

As necessary

2%

SPOUSE/PARTNER CAREER ASSISTANCE

CHART 32: Do you offer spouse/partner employment assistance? Chart 21

No45%

Yes, by tier15%

Yes32%

Yes, by exception8%

CHART 33: Do you have a dollar cap in place? Chart 22

Yes61%

No39%


CHART 34: What is the dollar amount?

Chart 23

$1,600 - $2,50043%

$5,000 and up3%

Less than $1,50036%

$2,600 - $5,00018%

LUMP SUM POLICY

CHART 35: Does your U.S. domestic program include a lump sum-only policy? Chart 24

Yes, for select relocation services

37%

Yes, for all relocation services29%

No34%

CHART 36: Do you tax assist the payment? Chart 25

Yes70%

No30%


CHART 37: Which groups of relocating employees receive the lump sum-only policy in your organization? (multiple responses possible)

Response Percentage

Entry-level employees 68%

New hires with little or no experience/recent college graduates 65%

Renters 37%

Managerial-level employees 32%

Executive-level employees 20%

Interns 20%

Other 19%

Additional respondent comments: � Lower-level employees.

� Business determines which employees receive the lump sum-only policy.

� By grade level.

� All U.S. employees.

� Provided on a case-by-case basis.

� Provided by employee choice or only employee initiated.

CHART 38: Are these transferees provided with any additional support? Chart 26

Yes52%

No48%

When asked to describe any additional assistance provided, these were the most common responses:

� Resources: costs not covered by the company; company supplies name/contact of suppliers, but employee is expected to use their lump sum (e.g., household goods, destination services assistance, brokers, temporary living).

� Household goods (van line, U-Haul, vehicle shipment)—costs covered, lump sum plus household goods shipment costs.

� Lump sum is a component within the policy.

� Other responses: COLA, varies by policy level/grade level, internal HR support.


CHART 39: What is the primary intent behind using a lump sum-only policy?

Chart 27

Ease of administration by HR/recruiters, etc.

27%

Company culture (company feels

employees should be self-sufficient)

5%

Cost containment44%

Other (lower level employees,

employee choice, business needs)

18%

Make the program easier

for employees to understand

6%

CHART 40: Does the lump sum-only amount vary by homeowner vs. renter? Chart 28

Yes33%

No67%

When asked to describe the differences in the lump sum amount provided to homeowners vs. renters, amounts varied based on a number of factors:

� Over one-third (35%) of respondents reported that homeowners receive at least double the amount renters receive.

� Other factors impacting the differences in lump sum amounts are:

– Family size

– Distance between locations

– Salary/grade level

– Management discretion


CHART 41: How is the amount for a lump sum-only payment determined? (multiple responses possible)

Response Percentage

Pre-set amounts, could be based on grid/matrix 41%

Varies, determined by HR/recruiting/hiring manager/policy 41%

Flat amount for all employees 19%

Percentage of salary 5%

Calculation 4%

CHART 42: Please indicate any changes you are considering to your lump sum-only policy. (multiple responses possible)

Response Percentage

Re-evaluating and adjusting lump sum amounts 52%

Using lump sums more often 43%

Providing other specific relocation benefits separate from the lump sum (such as household goods move)

34%

Providing lump sums to more higher-level employees than before 23%

Using lump sums less often 7%

Providing lump sums to current employees (vs. new hires) 5%

Evaluating tax assistance 2%

When asked about what they thought the challenges or best practices were connected with using a lump sum-only policy, following are the most common responses:

Challenges: � Inconsistency between employees.

� Impact to employee experience/lack of support to employee.

� Hard to track.

� Developing a methodology.

� Unfavorable tax position.

Best Practices: � Better suited for entry-level/early career or younger employees; renters; interns.

� Break out tax excludable (household goods), provide small lump sum and limited household goods.

� Develop a methodology to fit different policy types.


HIGH COST AREAS

CHART 43: Is your company experiencing challenges in transferring employees to high cost of living areas?

Chart 29

Yes, only moderate challenges45%

Yes, a high degree of challenge

8%

No47%

CHART 44: In which areas are you feeling the greatest challenges? (multiple responses possible)

Response Percentage

High housing costs 95%

Shortage of housing inventory to buy 34%

High cost of goods and services (aside from housing) 29%

Shortage of housing inventory to rent 28%

Spouse/partner career issues 12%

After COLA ceases, employees can no longer afford to live in the higher cost area

12%

Other 6%

Additional respondent comments: � State income tax rate.

� Determining COLA.

� Out of pocket medical costs.


HIGH COST AREAS—COLA

CHART 45: Does your company provide an allowance to compensate for higher living or housing costs? (multiple responses possible)

Response Percentage

No, we don’t provide COLA 57%

Yes, we provide COLA via a formal policy 29%

Yes, we provide COLA via a formal policy excluding new hires 20%

Yes, we offer on a case-by-case basis 9%

Yes, we offer COLA on a case-by-case basis excluding new hires 9%

Reflected in compensation 3%

Increases in lump sum or MEA 1%

CHART 46: How do you determine the COLA amount? (multiple responses possible)

Response Percentage

Outside COLA data provider 73%

Predetermined list of high-cost areas 27%

Internal methodology 9%

CHART 47: Do you differ between homeowners and renters? Chart 30

Yes64%

No36%


CHART 48: Do you have a threshold in place for compensating for higher living or housing costs? Chart 31

Chart 39

No61%

Yes39%

CHART 49: What is the threshold in place for compensating for higher living or housing costs?

Chart 40

Chart 32

6-10%31%

0-5%38%

11-25%13%

Varies18%

CHART 50: How long do you compensate for higher living or housing costs?

Chart 41

Chart 33

3+ years20%

1-3 years73%

Other7%


CHART 51: Does your company tax assist your cost of living allowance (tax gross-up)?

Chart 42

Chart 34

Yes28%

No72%

HIGH COST AREAS—MORTGAGE SUBSIDY

CHART 52: Does your organization currently provide a mortgage subsidy?

Chart 43

Chart 35

No77% Yes, by

exception only 3%

Yes20%

CHART 53: Who is eligible for a mortgage subsidy? (multiple responses possible)

Response Frequency

All current employees 48%

By policy tier 45%

New hires, at the same level as for current employees 21%

All employees eligible, by exception only 10%


CHART 54: What is length of time for your mortgage subsidy?

CHART 55: Do you have a cap on your mortgage subsidy?

Chart 45

Chart 37

No68%

Yes32%

CHART 56: What is the capped amount for your mortgage subsidy?

Chart 46

Chart 38

Varies33%

$21,000 - $40,00011%

Up to $20,00033%

$41,000+23%

Chart 44

Chart 36

3 years62%

Varies based on locations

14%

2 years3%

4 years7%

5 years14%


CHART 57: Do you provide tax assistance for the mortgage subsidy? Chart 39

Chart 47

No82%

Yes18%

HIGH COST AREAS—RENTAL SUBSIDY

CHART 58: Do you offer a rental subsidy?

Chart 48

Chart 40

Yes, depends on employee

level7%

Yes, by exception

5%

No83%

Yes, for all renters

5%

CHART 59: How do you determine the amount of the rental subsidy? (multiple responses possible)

Response Percentage

Difference between new and old rent 48%

Cost of living study 24%

Flat amount 24%

Varies 10%

By family size 5%

Capped 5%


CHART 60: Do you have a cost of living threshold in place for eligibility for a rental subsidy?Chart 41

Chart 49

Yes33%

No67%

CHART 61: What is the threshold in place for your rental subsidy?

Chart 42

Chart 50

6-10%14%

26-50%14%

0-5%29%

11-25%43%

CHART 62: How long do you offer the rental subsidy for?

Chart 43

Chart 51

Other20%

1-3 years60%

3+ years20%

Additional respondent comments: � Less than 6 months.

� Length of rental subsidies are negotiated.

� Varies depending on location.

� Rental subsidies are provided as a lump sum.


CHART 63: Who is eligible for a rental subsidy?

Response Percentage

Executive-level employees 68%

Managerial-level employees 68%

New Hires with little or no experience/recent college graduates 21%

Entry-level employees 21%

Current employees 11%

By policy tier 11%

CHART 64: Do you provide tax assistance for the rental subsidy? Chart 44

Chart 52

No35%

Yes65%

TEMPORARY/ROTATIONAL/EXTENDED BUSINESS TRAVEL

CHART 65: In your organization, is there a growing concern with tracking employees on temporary assignments, extended business travel, or rotational assignments in the U.S.? Chart 45

Chart 53 Yes, tax issues12%

No concern

45%

Yes, tax and immigration35%

Yes, immigration issues (for foreign nationals working in the U.S.)

8%


CHART 66: How well does your company track U.S. employees on extended business travel within the U.S.?

15%19%

34%

27%

5%1

(Poor)2 3 4 5

(Excellent)

SHORT-TERM ASSIGNMENTS

CHART 67: Does your organization use U.S. domestic temporary/short-term assignments? Chart 46

Chart 54

No38%

Yes62%

CHART 68: Do you have a formal policy for U.S. domestic temporary/short-term assignments? Chart 47

Chart 55

No, short-term U.S. domestic

assignments are done on a case-

by-case basis30%

Yes63%

No7%


CHART 69: How do you expect your company’s U.S. domestic temporary/short-term assignment activity will change over the next two years? Chart 48

Chart 56

Stay the same53%

Increase41%

Decrease6%

CHART 70: What is the typical duration of your U.S. domestic temporary/short-term assignments?

Chart 57

Chart 49

Varies4%

13-24 months

5%

More than 24 months

3%

4-6 months

34%

10-12 months26%

7-9 months15%

Up to 3 months

13%


CHART 71: What are the primary reasons for sending employees on U.S. domestic temporary/short-term assignments?

Response Percentage

Knowledge or skills transfer/training 75%

Project work 72%

Leadership/career development 54%

New business/operation set up 36%

Controlling relocation costs 16%

More flexibility to meet employee needs 9%

Other 4%

Attract emerging populations (e.g., Millennials/Gen Y, employees approaching retirement, etc.)

3%

Additional respondent comments: � Rotational programs.

� Customer support.

� To meet client needs.

CHART 72: Does your company policy allow families to accompany employees on U.S. domestic temporary/short-term assignments? Chart 50

No41%

Yes25%

Yes, on a case-by-case basis

34%

CHART 73: What are the major challenges with U.S. domestic temporary/short-term assignments? (multiple responses possible)

Response Percentage

Finding affordable temporary living accommodations 48%

Tax and tracking issues 39%

Family and personal issues (e.g., difficulty in having employee separated from the family, etc.)

39%

Short-term assignments more costly than anticipated 38%

Difficulty providing adequate housing for short-term assignments 30%

Measuring productivity and job effectiveness 11%


ROTATIONAL ASSIGNMENTS

CHART 74: Does your organization use U.S. rotational assignments? Chart 51

Yes36%

No64%

CHART 75: How do you expect your company’s U.S. domestic rotational assignment activity will change over the next two years?

Chart 52

Stay the same56%

Increase39%

Decrease5%

CHART 76: Do you have a formal policy for U.S. domestic rotational assignments that is distinct from any short-term assignment policy that you may have?

Chart 53

No, rotational assignments are done on

a case-by-case basis17%

Yes52%

No31%


CHART 77: For what purposes are U.S. domestic rotational assignments used? (multiple responses possible)

Response Percentage

Career development 84%

Project work 35%

New hire training 26%

Knowledge transfer 19%

Collaboration 14%

CHART 78: What are your main challenges with U.S. domestic rotational assignments? (multiple responses possible)

Response Percentage

Difficulty providing adequate housing for rotational assignments 43%

Rotational assignments more costly than anticipated 39%

Family and personal issues (e.g., difficulty in having employee separated from the family, etc.)

36%

Other 11%

Additional respondent comments: � Retaining talent is a challenge.

� No formal policy in place.

� Not really an issue for housing, but managing “head on bed” as the apartments house four total employees that rotate every 14 days in and out of the apartment.

INTERNS

CHART 79: Do you have a relocation program for interns?

Response Percentage

No 64%

College Interns 32%

MBA/Graduate Interns 21%


CHART 80: Do you have a separate relocation policy for College interns? Chart 54

No21%

Yes79%

CHART 81: Which benefits do you provide to College Interns? (multiple responses possible)

Response Percentage

Temporary living (actual lodging or allowance/per diem) 50%

Lump sum-only 39%

Rental assistance 32%

Transportation at destination (e.g., bus pass, train allowance) 29%

Miscellaneous allowance 26%

Household goods shipment/excess baggage 24%

Travel (to/from or allowance) 13%

Shipment of auto 11%

CHART 82: Do you have a separate relocation policy for MBA/Graduate interns?Chart 55

No48%

Yes52%


CHART 83: Which benefits do you provide to MBA/Graduate Interns? (multiple responses possible)

Response Percentage

Lump sum-only 46%

Temporary living 46%

Household goods shipment/excess baggage 42%

Rental assistance 33%

Transportation at destination (e.g., bus pass, train allowance) 33%

Miscellaneous allowance 25%

Shipment of auto 17%

Travel (to/from or allowance) 4%

TALENT

CHART 84: Has your company experienced increased talent shortages in the U.S. in the past two years?

Chart 56

No48%

Yes, talent shortages have increased

significantly 8%

Yes, talent shortages have increased, but only somewhat44%

CHART 85: Have you implemented, or are you considering implementing, any of the following to overcome talent shortages? (multiple responses possible)

Response Percentage

Targeted recruiting 65%

Sign-on bonuses 48%

Intensified campus recruiting 43%

More focus on intern programs 35%

Enriching relocation packages on a case-by-case basis/approving exceptions 20%

Offering short-term/temporary assignments 15%

Recruiting from other countries 13%

More local training 11%

Offshoring/outsourcing 11%

Enriching relocation packages across the board 2%


MILLENNIALS

CHART 86: Many organizations are seeing a significant shift toward younger employees relocating, and Millennials are changing the way companies think about acquiring, and retaining, their younger talent. Are you doing anything differently to manage the Millennial group? Chart 57

Yes25%

No75%

CHART 87: What strategies have you implemented, or are you planning to implement, to retain your Millennial talent? (multiple responses possible)

Response Percentage

Flexibility (e.g., working remotely, flexible work hours, etc.) 72%

More rotational/developmental assignments 69%

Providing mentors 62%

Short-term temporary assignments 59%

Developmental training 48%

Offering more special projects 28%

More investment in the latest technology 28%

Other 7%

Additional respondent comments: � Lump sum relocation coverage.

� Changing policies for more vacation.

When asked which talent management measures overall have been the most effective for their organization, the most common responses were:

� Targeted recruiting.

� Internship programs.

� Rotational programs/leadership development programs.

� Greater focus on Talent Management programs/mentoring.

� Flexible work hours/schedule.

� Developmental assignments/short-term assignments.

� Urban headquarters.

� Technical training.

� Greater focus on technology.


RESPONDENTSWe would like to thank the following companies who participated in Cartus’ 2017 Domestic U.S. Relocation survey and gave their permission to be identified as participants:

Accuride Corporation

Aleris

Allianz

American Signature

Apache Corporation

Ball Aerospace

Blue Cross and Blue Shield of North Carolina, Inc.

Caterpillar

CH2M Companies, Ltd.

The Coca-Cola Company

The Clorox Company

Continental Cement Company, LLC.

Crown Equipment Corporation

CSG International

The Dow Chemical Company

DST Systems, Inc.

Eaton Corporation

Fiat Chrysler Automobiles, LLC.

Ford Motor Company

GE

Herc Rentals, Inc.

The Hershey Company

Ingersoll-Rand Company

Johnson & Johnson

Kiewit Corporation

Kimley-Horn and Associates, Inc.

Laird Technologies

McDonald’s Corporation

Merchant e-Solutions, Inc.

Meritor, Inc.

Microsoft Global Resources

The Nielsen Company (US), LLC.

Nike, Inc.

Olympus Corporation of the Americas

PepsiCo, Inc.

Qualcomm Incorporated

Royal Caribbean Cruises, Ltd.

Saint-Gobain North America

Shell Oil Company

Skanska USA, Inc.

Standard Chartered Bank

TEGNA, Inc.

Transamerica Life Insurance Company

Travelers Insurance Company

Writer Corporation

Yum! Brands, Inc.


For these, and other mobility-related resources, please visit our Resource Hub at www.cartus.com.

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Survey Report

D O M E S T I C U . S . R E L O C A T I O N P O L I C Y & P R A C T I C E S

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