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Essential Knowledge:
"New Normal?" "No Normal" is More Like it. |
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“New normal” seems to be the preferred characterization of a post-recession world. The term is ubiquitous in the business press and even the upcoming Worldwide ERC® Global Workforce Symposium promises to gear participants up for the new normal. After a tumultuous year and a relocation perfect storm that encompassed a stalled economy, a devastated real estate market and tight mortgage money, it’s no wonder we’re looking earnestly for some sense of normalcy.
All signs, though, are that normalcy, stability and predictability will remain elusive. Most companies have taken significant steps to cut costs, reduce headcount and generally simplify their operations. But it’s an axiom of business that you can’t shrink your way to success, and the pace of change today is, if anything, accelerating. Overly conservative companies will be left behind. With tantalizing hints of recovery appearing, dynamic leaders are already looking for new opportunities and contemplating how they can again move their companies forward.
U.S. and global relocation continue to be vital tools in this effort, but success will require even more creativity and flexibility than usual. Here are some of the “no normal” trends that we’re already preparing for at VISION:
Half-Pats
While domestic relocation support is, in some instances, increasing, companies are actively seeking solutions that reduce high global assignment costs. As always, global benefits must be competitive enough to attract and retain talent. But some companies with assignees in Asia have been successful in revisiting local and local-plus packages (the so-called “half-pats”) and limiting benefits for expats who have completed the initial assignment.
Surprisingly, the more modest benefits have neither deterred assignees from accepting postings nor produced a mass exodus of assignees already in place. Why? Many assignees have already benefitted from generous packages and can afford to accept lesser support—particularly in locations where their money goes much farther than at home. And the powerful, lucrative jobs that once tempted assignees to return home are probably gone. The Under-served Renters
According to a recent Worldwide ERC® research study, nearly half of all transferees today are renters. With the difficult real estate market, this number is likely to continue to grow. Yet renters are too often assumed to be only new hires or lower-rank employees and they have historically received less attention and benefit support than homeowners. As companies shake off the recession and again actively pursue talent, renters will become a core policy focus.
Creative Support for Homeowners
When must-have employees are facing a loss on sale, they need creative options that will allow the company to achieve its objective without imposing an onerous burden on the employee. A fresh alternative to a loss-on-sale provision is domestic property management. Property management remains uncommon in domestic relocation, but it can be another means to get the employee in place while delaying a sale until market conditions improve.
More Dynamic Policies
In more stable times, a carefully crafted relocation policy could withstand the test of time with only an occasional tune-up. Today, tightly written policies with more absolutes than flexibility quickly become irrelevant. And the traditional, cumbersome process for revisions, with extensive analysis, benchmarking, reviews and approval chains is less likely to result in leading edge than left-behind.
In the age of no normal, companies need nimble policies that allow them to react on the fly to their immediate needs and local market conditions. For example, an executive in Los Angeles who has lost hundreds of thousands of dollars of home equity in a few years has needs not anticipated in traditional, top-tier policies. No normal means that a current homeowner might find himself becoming a renter, while a renter might finally be in a position to buy a home.
A more practical approach might be a core policy that includes household goods management, temporary housing, home finding and final move travel. Supplemental menus of add-ons could be tailored based on homeowner/renter status, company level or even the anticipated ROI of a particular relocation to the company. More flexible policies will allow HR professionals to manage and move talent much more effectively, while helping to boost acceptance rates and increase employee satisfaction.
A More Radical Response
Some companies are moving beyond policy refinements and are now making hiring decisions based on the candidate’s housing situation (value, marketability, equity situation and more). The EEOC permits this assessment (though there might be state legal issues in play); its Compliance Manual states that employers must “treat similarly situated applicants the same based on where they are in the application process.”
So a company needn’t conduct a marketability analysis on every applicant; this can be done in the final stage of the selection process. The company must take care to apply the same method of analysis and clearly define how the analysis will be used. Needless to say, companies considering this approach should consult their own counsel.
How VISION Can Help Your VISION Consulting Services team focuses exclusively on researching, analyzing and advising on the latest trends in global relocation and human resources. Questions? Dilemmas? Contact us today for a complete review of your current relocation policies. We’ll apply our Better Practices to your unique relocation needs and budget and ensure you’re prepared for success in a challenging market.
Read more VISION Consulting Services articles and white papers.
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