TREND SPOTTING IN EMPLOYEE RELOCATION

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TREND SPOTTING IN EMPLOYEE RELOCATION

• SOMAYA DIMITRI PRUDENTIAL RELOCATION
• TOM HOGAN - TRANSFEREASE RELOCATION
• ROB STONE THE MIGROUP
• STEVE CRYNE CERC
• PAUL PRESSWOOD TAYLOR MOVING STORAGE
  LTD./TAYLOR INTERNATIONAL

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2007 POLICY SURVEY OVERVIEW

• THE SURVEY IS
• A BI-ANNUAL SURVEY OF POLICIES PRACTICES OF
  ORGANIZATIONS WITH OPERATIONS IN CANADA
• WHO PARTICIPATED?
• PUBLIC AND GOVERNMENT ORGANIZATIONS
• WHO BENEFITS FROM THIS SURVEY?
• CORPORATIONS, GOVERNMENT ORGANIZATIONS,SERVICE
  SUPPLIERS, RESEARCHERS, ACADEMICS MEDIA

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2007 POLICY SURVEY OVERVIEW

• 98 OF AN INVITED 500 ORGANIZATIONS PARTICPATED IN
  THE SURVEY

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2007 POLICY SURVEY OVERVIEW

• ORGANIZATION PROFILE
• gt75 OF THESE ORGANIZATIONS ARE BASED IN
  CANADA
• 58 EMPLOY MORE THAN 1000 PEOPLE
• 25 EMPLOY MORE THAN 5000 PEOPLE
• 53 HAD ANNUAL CANADIAN REV. OF 100M
• 31 HAD ANNUAL REV. EXCEEDING 2 BIL

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2007 POLICY SURVEY OVERVIEW

• WHAT CAN YOU TAKE AWAY FROM THIS SURVEY?
• IMPORTANT USEFUL INFORMATION ABOUT
• HIRING PRACTICES
• POLICY ADMINISTRATION
• PARTICIPANT PROFILE
• TRANSFEREE PROFILE
• SUPPLIER RELATIONS
• RELOCATION POLICIES

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Domestic Relocation Trends

• Somaya Dimitri, Global Account Executive,
• Prudential Relocation

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Domestic Relocation Trends

• Average costs of relocations lower than expected
  
• Permanent Homeowner - 45,000
• Renters - 15,000
• Temporary Relocations
• Homeowner reported at 20,000 and renters at
  13,000

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Domestic Relocation Trends

• The majority of Companies move under 50 employees
  per year
• 47 do not vary assistance based on level
• Housing and Family Issues still 1 obstacles to
  relocation

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Domestic Relocation Trends

• Reduction in Lump Sum Programs
• 35 provide a lump sum payment down from a
  reported 46 in 2005
• 44 base lump sum amount on origin/destination
  and family size
• The average lump sum payment is less than 10,000

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Domestic Relocation Trends

• Guaranteed Price Plans are down
• 59 offer GPP vs. 74 in 2005
• 47 offer Equity Loss Protection down from 56 in
  2005
• 44 of those gross up the taxable portion
  down from 53 in 2005

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Domestic Relocation Trends

• 69 provide Housing or Rental Cost Differentials
• 50 of companies base assistance on the actual
  differential ( amount)
• 22 offer Cost of Living assistance and 23 offer
  Mortgage Interest Differentials

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Domestic Relocation Trends

• 22 of Companies incorporate tools to protect
  themselves in anticipation of down market
• 57 mandate marketing periods
• 44 dictate listing parameters
• 22 offer an incentive to sell before take over
• - most provide 1 incentive

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Domestic Relocation Trends

• Conclusions
• Companies continue to look for ways to reduce
  cost and share the risk of exposure with the
  employee decrease in GPP mandatory listing
  periods, specific listing parameters, decline in
  Equity Loss protection

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Cross Border Relocation Trends

• Tom Hogan
• Vice President Marketing and Sales
• TransferEASE Relocation Inc.

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CROSS BORDER OVERVIEW

• 50 RESPONDANTS DO CROSS BORDER

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CROSS BORDER OVERVIEW

• RELOCATION VOLUMES
• 71 TRANSFER INTO USA LESS THAN 10 YEARLY
• - 83 WERE TEMPORARY
• 66 TRANSFER INTO CANADA LESS THAN 10 YEARLY
• - 78 WERE TEMPORARY

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CROSS BORDER OVERVIEW

• EXPECTED VOLUMES
• APPROX 17 EXPECT VOLUME TO INCREASE IN 2008

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CROSS BORDER OVERVIEW

• RELOCATION COST
• PERMANENT RELOCATION HOMEOWNER
• 57,275.00
• TEMPORARY RELOCATION HOMEOWNER
• 42,275.00
• PERMANENT RELOCATION RENTER
• 25,775.00
• TEMPORARY RELOCATION RENTER
• 28,900.00

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CROSS BORDER OVERVIEW

• CHALLENGES TO RELOCATION
• 2007 2005
• TAX (1)
• FAMILY ISSUES (2)
• VISA AND IMMIGRATION (3)
• HOUSING (4)

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CROSS BORDER OVERVIEW

• CROSS BORDER MANAGEMENT
• WRITTEN POLICY 74.5
• CROSS BORDER POLICY DESCRIPTION
• DOMESTIC GUIDELINES 21.3
• CROSS BORDER SPECIFIC 26.2
• ONE CENTRALIZED GLOBAL 36.1
• BUSINESS/REGION PRACTICE 4.9
• BASED ON CORPORATE NEEDS 8.2
• OTHER 3.3

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CROSS BORDER OVERVIEW

• HOME DISPOSAL PERMANENT RELOCATION
• 69 PROVIDE ASSISTANCE
• - 65 GUARANTEE PROGRAM
• - 15 HOME SALE ASSISTANCE
• HOME DISPOSAL TEMPORARY RELOCATION
• 80 PROVIDE NO ASSISTANCE

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CROSS BORDER OVERVIEW

• HOUSING ASSISTANCE
• 69 OF COMPANIES PROVIDED VARIOUS ASSISTANCE
• 50 PROVIDED EQUITY LOSS PROTECTION
• 66 PROVIDED COLA (32 INCREASE 2005)
• NEW LOCATION HOUSING COST/DIFFERENTIAL INCREASED
  20 AND 12 RESPECIVELY 2005

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CROSS BORDER OVERVIEW

• TAXATION TRENDS
• WRITTEN TAX POLICY DECREASED FROM 70 TO 57 IN
  2007
• PAYROLL TRENDS
• HOME COUNTRY VS. HOST COUNTRY AS THE BASIS OF
  PAYROLL INCREASED FROM 24 TO 42 IN 2007

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CROSS BORDER OVERVIEW

• REPATRIATION
• AS IN 2005 33 HAVE A FORMAL REPATRIATION PROGRAM
• INCREASE OF 10 PROVIDE REPATRIATION ASSISTANCE

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International Policy Trends

• Rob Stone, Assistant General Manager
• TheMIGroup

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International Policy Trends

• General Overview
• International Relocation costs are increasing
• Average Cost of Permanent relocation - 91,125
• Average Cost of Temporary relocation - 77,875
• Majority of corporations manage their program via
  written policy (2007 81 vs. 2005 74)
• The major challenges relate to Tax, Family,
  Visa/Immigration and Housing issues.

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International Policy Trends

• A decline in the number of companies offering
  Home Sale and Home Purchase assistance
• Home Sale (2005 64 vs. 2007 58)
• Home Purchase (2005 44 vs. 2007 30)
• Corporations are reducing interim accommodation
  allowances
• 2005 61 of companies allowed 30 days
• 2007 48 allow more than 30 days.
• A general decline in allowing spouse/children to
  accompany employee on home finding trips.

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International Policy Trends

• A significant increase in the number of
  organizations providing service premiums
• GS Premium (2005 42 vs.. 2007 88)
• Hardship Premium (2005 62 vs.. 2007 73)
• Foreign Service (2005 59 vs.. 2007 78)
• An increase in companies providing Spousal
  assistance (2005 27 vs.. 2007 45)
• Corporations reported a general trend in limiting
  (capping) the size of SEA, AIR and STORAGE
  shipments

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International Policy Trends

• 49 of companies reported having a written tax
  policy (declined from 73 in 2005).
• 74 of companies use tax equalization as their
  preferred tax treatment method.
• a trend was noted in the number of companies
  providing tax counseling after arrival in host
  country and prior to repatriation.
• Overseas employment tax credits, terminating
  Canadian residence and social security
  totalization all show an increase in usage over
  2005.

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International Policy Trends

• Increase in companies using home country payroll
  (2007 58 vs.. 2005 36)
• Home country is used by 71 of companies to
  determine base salary (up from 49 in 2005).
• A decrease in the number of companies that have a
  formal repatriation program (2005 36 vs.. 2007
  29)

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International Policy Trends

• Conclusions
• Companies continue to expand into new global
  markets
• Organizations look for ways to minimize costs
  (home sale/purchase, DA service, interim living,
  Household Goods moving all had declines in
  allowance)
• Challenges continue to revolve around tax, legal
  and family issues.