PORTAL FOCUS: January/February 2022
By By Will Kohudic, Editor, Portal
It has been almost two years since the COVID-19 pandemic set in on a global scale. Speculation about what will happen next is ongoing, and the truth is, nobody quite knows for sure. So, for this issue, we will stick to the hard numbers and facts of what has happened in the mobility industry over the past year. We will also discuss how companies have adapted and continue to adapt to the realities of change in the economy and the workforce, and spotlight trends and practices that are important for mobility and moving companies of every description.
A Word on What Global Mobility Is and How Movers Can Learn from It
Before we dig into the data and conclusions from our members’ survey reports, I’d like to take a moment to talk about what ‘mobility’ means in this context and how the findings of this article relate to all IAM member companies. To get a clearer perspective on this topic, I spoke with Ray daSilva, President of Mobility Exchange, and Ben Cross, CEO of Glomo, both of whom are highly familiar with the subject.
‘Global mobility’ (sometimes referred to below as ‘GM’) refers generally to a multinational organization’s capacity to relocate its talent to offices in different regions and countries. Mobility is handled by an organization’s HR department, but due to the depth and complexity of factors involved, corporate HR departments often rely partially or fully on the resources and expertise of a company that specializes in global mobility. Several IAM members provide mobility services, and their ranks are growing.
The idea of ‘mobility’ as we define it here began with companies who saw the potential to capture the value of mortgage and other financial services necessary in the relocation of employees. After the bundling of moving with real estate, it was a natural progression to the addition of a host of related services. Today’s mobility professionals handle negotiations over home sales, moving services, finding employment for relocating spouses, school searches, immigration procedures, automobile purchase and licensing, tax guidance, and much more.
This high level of service is often beyond the scope of, or above the chain of command for, a company’s own HR professionals. Policies and limits can be stressful or impossible for HR administrators to enforce when executives relocate, and the scope of expertise needed to make a successful foreign relocation is daunting. This is where companies who specialize in global mobility shine.
In a relocation of this scope, moving the employee’s household goods becomes one part of the mobility program. The mobility company negotiates with the moving company, shielding the client from the details of handling the physical move. The results of this dynamic are varied. While it may make the process easier for the client and the employee, an unintended result may be that it reduces or eliminates the contact between the mover and the client. Aggregated purchasing processes may also result in lower margins for the mover.
Overall, the pandemic has not been especially kind to the global mobility industry, as we will see below. In many cases, it has caused those companies to review and redefine processes while innovating with new service offerings and new technology. Of course, these are all exercises from which any company in our industry can benefit right now.
In the short term, the pandemic and the accompanying “Great Realization,” as Ben Cross calls it, has actually been good for companies who handle moves initiated by individuals. People who were close to retirement in 2020 are making that decision earlier. Others, finding themselves working remotely on a permanent basis, are moving closer to extended family or to a less-expensive city. Some are moving in search of a better job, or for a myriad of other reasons.
The downsides of the Great Realization, however, are affecting almost every industry, including the smaller movers. The global supply chain crisis is due at least in part to the sudden increase in consumerism as people buy more goods while stuck at home. Moving companies have big fluctuations in customer numbers and have trouble hiring and retaining staff. Inevitably, prices go up, and limited capacity across the board makes it hard to shop other movers based on price.
In a market like this one, how can a moving company both stand out to consumers and keep its employees engaged full-time? One way to do so is to take a cue from the mobility companies and offer additional services to your customers. Talk with the people you move or survey them, and find out what people moving in your market would value the most if you were to offer it. Take a good look at the results and ask yourself how you could apply them. If you’re not sure, chances are there is another IAM member who already does it; look for members who have those capabilities on Mobility Exchange, LinkedIn, or the IAM Facebook group.
Global Mobility Survey Results and Analysis
Moving companies and global mobility companies alike can learn a great deal by reading the full reports of surveys conducted by Aires, Graebel, and Santa Fe Relocation. We will discuss the highlights and some of the conclusions that have been drawn in the following pages, but we have also included links to the full reports for you to explore further. All three of these organizations began as moving companies. They have since broadened their capabilities and skill sets to become global mobility firms, and the results of their surveys are broadly applicable. Changes in the industry landscape due to the pandemic have led these companies to evaluate their clients’ evolving needs, innovate with their services, and increase their competencies in new areas. After the analysis of the surveys, we will also include an analysis of move pricing in the current market from PricePoint.
COVID-19 and Expatriate Mobility
Each year, Aires conducts a major survey of companies engaged in one aspect of the industry. Their 2019 Domestic Trends Report, while beyond the scope of this article, presents an interesting snapshot of the vibrant and growing North American moving and mobility market as it was just prior to the COVID-19 pandemic. By contrast, their 2020 Expatriate Trends Report takes an in-depth look at the challenges and changes wrought by COVID-19.
[The first part of] the Aires Expatriate Trends Report looks like any other year’s publication. But there is no avoiding the fact that 2020 has had unimaginable and monumental challenges. The global pandemic has undoubtedly changed the world of employee mobility for the foreseeable future. While no one yet knows the full impact the pandemic has had on mobility, we do know that some organizations have returned expatriates early and have delayed new assignments.
Greatest Challenges Noted by Respondents
Career/placement/succession planning 31%
Shipment of household goods 27%
Travel restrictions/securing flights 23%
Vacating/closing out assignment housing 23%
Loss of team members 7%
Distributing workloads 7%
Securing temporary accommodations 7%
Locating housing quickly 4%
Returning rented/leased autos 4%
Schooling for children 4%
Source: Aires 2020 Expatriate Trends Report
Approximately half of survey respondents had the need to evacuate some of their expatriates from their host countries due to the pandemic. Evacuation involves removing the expatriate (and family members) from their host location abruptly, leaving personal items and household goods behind, lease intact, with the plan of returning them when it is considered safe to do so. The same overall percentage of respondents that evacuated expatriates, also ended some expatriate assignments early and returned them to their home countries. Ending an assignment, which may also happen abruptly, allows for planning to ship all personal items and household goods from the host country, end the lease, and finalize the expatriate’s presence in the host country in conjunction with their return.
Fortunately, most respondents that had to evacuate expatriates only had to evacuate a small percentage. The findings between those that had evacuations and those with prematurely ended assignments are similar.
Exceptions have been reported for travel and lodging benefits due to quarantine requirements. Extended temporary living, hotel stays, rental car expenses, meals, lease termination expenses and immigration fees are some of the most commonly reported expenses paid by employers during these times.
The survey asked respondents to describe their greatest challenges with evacuating or returning expatriates earlier than planned. Similarities were found within their open-ended responses, with an emphasis on logistics and roles. Almost one-third reported challenges with finding roles or placing the returned expatriate in an appropriate position in their home country. While coordinating household goods shipments, locating housing, and ending leases in the host country also topped the list.
Most respondents (92%) have made no changes to their policies in response to the pandemic. The 8% who have made changes report everything from adding flexibility, increasing unaccompanied assignments and new policy types. Furthermore, only 15% of respondents anticipate making any future changes. Of those 15% planning to make changes to their policies, one-third are looking to update emergency strategies and crisis protocols and one-third are also looking at addressing virtual or remote assignments. One respondent noted wanting to remove home finding trips, another is considering modifying temporary housing and meal allowances, and another is looking to reduce the policy in general.
The events of 2020 and the impact of the pandemic have everyone wondering about the future; however, the survey revealed somewhat positive attitudes about the resiliency and importance of expatriate mobility—or at least not-as-negative attitudes as may have been anticipated. Respondents were asked to rate the degree to which they agreed or disagreed with the following statements. (See charts in magazine)
Aires also conducted several “pulse” surveys focused on specific aspects of moving and mobility during 2021. The full list of pulse surveys is available on their Educational Tools page. Of special interest here is their findings regarding the fact that companies have made few to no changes to their household goods provisions during the course of the pandemic:
Throughout the pandemic and nine surveys in our COVID-19 series, we asked what kind of policy changes are being made. The answers reflected little to no policy change, just exceptions being granted for extenuating circumstances.
The same holds true for household goods provisions. Only 3% of survey respondents noted any change to their household goods policy provisions over the past two years, and those changes centered around language enhancements to clarify benefits. There is little to no noticeable change in the prevalence of household goods shipments; they have always been a staple of domestic mobility and are expected to stay a staple.
What is changing for household goods benefits is the additional support, as noted in this report. This support includes increased interest in discarding unwanted items prior to packing, increased frequency of self-moves, an increase in placing caps on the overall shipment, and expanding benefits to more employees.
The Future of Mobile Employees
Graebel’s recent survey, State of Mobility 2021—Survey and Report, takes the events and trends of 2021 from the point of view of their clients, and projects what their needs and requirements will look like in the near future.
They developed the survey with these questions as guides:
What does the mobile employee of the future look like?
How has the pandemic changed workers’ perspectives on relocating for a job or assignment?
What is global mobility’s role as companies strategize for the next few years?
The first conclusion that can be inferred from this survey is that the pandemic has had little effect on workers’ desire to relocate. The charts below illustrate the strong continuing demand for relocations, as well as a surprising percentage who say they are more likely to relocate now than before the pandemic.
The survey also shows that workers with families are more willing than their counterparts to relocate, even during the pandemic (some conclusions will be drawn about this particular trend later in this article). Families who relocate do have concerns regarding adjustment to new environments, however, and increasingly expect company support during the process.
From the survey: Including the family is a game changer: If you haven’t recently, now would be a good time to re-evaluate your family relocation policies and services, to ensure you have the right support for those mobile employees. Global relocation is a great tool for recruiting and retaining top talent, but if your family relocation support isn’t market-competitive, it could be an easy decision for employees to turn down an assignment or take their talent to a company that offers better family assistance. A good place to start? Double check your policies to see if they include services like school search and placement, home leave, and spousal support.
What do these numbers mean for mobility professionals? Here are some of the conclusions Graebel draws:
Show your value to leadership: Historically, it's been difficult for some global mobility teams to get a seat at the leadership table. The pandemic created more awareness within companies of the importance of talent mobility. Leverage that attention to highlight the value of global mobility and its many business benefits for company leaders.
Careful planning equals big rewards: On a more tactical level, these findings indicate now is not the time to slow down when it comes to talent mobility program strategy and planning. Countries and borders will continue to open—and your mobile employees are eager and ready to relocate. That said, they’ll need support to get the most out of these rewarding opportunities. You should connect with key stakeholders to take inventory of upcoming relocations and who might be a fit for the assignment, to continue planning policies, benefits, timelines and budgets.
Relocation destinations impact benefit needs: With 81% of respondents naming a European city as their top-three desired destination, compared to 61% saying a city in Asia-Pacific and only 51% noting a North American city, it’s clear certain relocations, based on their destination, will be more desirable. Global mobility managers should evaluate the incentives and benefits for each relocation based on the destination region to ensure the right assignments are filled and mobile employees are happy with their relocation support.
Tune your EQ: Workers are highly interested in international relocation experiences but need company support – both logistically and emotionally. In fact, over half (55%) of workers would prefer their employer handle all the logistics for them. Is your company – and more importantly, your talent mobility program – equipped to support them? Do you have their best interests in mind from an EQ (emotional intelligence) standpoint?
These respondents are telling us exactly what they want and what their concerns are. Now it’s time to adjust global mobility strategies and policies to match.
For example, what health and safety policies have you implemented to help international mobile employees feel secure? Are you offering language or cultural training?
Based on the research results, these are the four key ingredients for a modern approach to talent mobility:
Build your global mobility program to offer exceptional in-person assignments that recruit and retain top talent, but also find a balance between strong in-person and virtual assignments, as both will be common in post-pandemic relocations.
Adjust strategies and policies to match updated company-supported benefits and mobile employee drivers and concerns.
Create inclusive, flexible policies that address unique candidate needs.
Acknowledge the emotional impacts of relocation by supporting family relocations. You can strengthen policies and make the relocation more appealing if the mobile employees' partners or families are included.
Let these insights guide your global mobility program adjustments, so you’re creating exceptional experiences tailored to what mobile employees want.
SANTA FE EXCERPT:
Global Mobility Survey (GMS) Report 2021/2022
Santa Fe Relocation’s Global Mobility Survey (GMS) report is the 10th edition of their annual survey. It addresses critical Global Mobility topics facing organizations operating on a cross-border basis and presents a focused analysis of the key findings.
The report provides insights into Global Mobility (GM) transformation with an increase in visibility and consultative expectations, and on the evolving talent scene where remote work and virtual or hybrid assignments have increased along with a resurgence of all types of international work arrangements. It also examines the increased complexity of risk, compliance and duty of care.
Findings include the observation that increased visibility of internal leadership and stakeholders has required wider engagement because cross-border remote work and virtual assignments have become a complex additional responsibility.
Summer 2021 witnessed a backlog of international assignments and more hybrid work arrangements. Remote or virtual has not replaced traditional physical mobility—it is operating in parallel. Global mobility teams face challenges and opportunities with increased pandemic-related complexity.
It is expected that global mobility teams will assume an increasingly strategic role. Business leaders are clear in their expectation of a mobility partner to guide them in making the right people decisions, better control costs and deliver analytics that map spend, track performance, and manage long-term people progression/retention. This is an overwhelming workload for even the most experienced of mobility professionals. In addition, their scope is expanding to include cross-border remote workers not previously considered as part of a global mobility program.
How COVID-19 Redefines Global Mobility and Makes it Visible
Reflecting on the impact of the COVID-19 pandemic, 84% of GM professionals expect to see transformation over the next 12 months. One third say that GM strategic/advisory functions will be absorbed by HR business partners or divided between talent and reward; of this third, almost half will outsource to an external relocation management company.
As a direct result of the pandemic, GM teams have become visible to leadership who understand their importance in internationally mobilizing employees. Regardless of whether the broader HR organization is in the midst of change, the initiative to focus on GM, given its escalated importance, is critical to achieving a competitive advantage for international work arrangements.
Building a Business Case for International Assignments
Almost three-quarters of business leaders say that their company does not have a formalized business investment plan process to authorize international assignments. There is a small increase in those who do, from 22% in 2020 to 27% in 2021. Of those who have a formalized business case, the most popular way of evaluating the immediate post-assignment return on investment (ROI) is through the achievement of employee talent objectives.
This highlights an opportunity for GM teams to educate and influence business leaders to adopt a more thoughtful approach to talent planning processes. GM has traditionally implemented international workforce arrangements once a corporate decision has been made. Embedding and challenging HR and business leaders to formalize their investment using a structured business case or people investment plan will drive clarity over the purpose, desired outcomes and the right international work arrangements, whilst allowing full cost visibility and providing increased objectivity over the choice of preferred candidate.
Understanding the COVID-19 Impact on Global Mobility
The pandemic did not halt mobility, mobility is thriving in the new normal. Surprisingly, only between 20% and 30% of assignments did not proceed or get authorized. 70% proceeded with disruption. Graduate programs suffered the most reduction in approvals and mobilizations, likely due to the reliance on face-to-face interactions not being possible during the peak of the pandemic. Redesigned programs are expected to emerge in 2022.
Given that physical relocations were either deferred or stalled due to home/host pandemic status, it is clear there is a pent-up demand driving the return of long-term assignments. The employee experience, with postponements and uncertainty, has become more important to manage. The stress levels are heightened and decisions more challenging, as employees embark on an international move.
While the world has become relatively acclimatized to this new environment of continual changes and preventative restrictions to border access, it is not a unique situation. Pandemics are not a new phenomenon. The new is how organizations and society in general, thrive and function in the new normal. It will be interesting to review the next wave of mobility movement in next year’s report.
Predicted Resurgence of International Assignment
Mobility remains a fundamental component within most organizations across different sectors, especially for those regulated industries requiring physical presence of the workforce. Remote and virtual arrangements are in parallel, not a substitute for traditional models. Hybrid models are set to become an expedient solution to the uncontrollable external pandemic factors.
Equally, there is no let-up on demand for the global talent pool, evidenced by the increase in one-way relocations in 2021 where GM teams are key stakeholders in enabling and selling the moves to prospective employees. Business travel has been subject to greater scrutiny considering that organizations have maintained business as usual on a virtual basis and with the increased risk and duty of care, volumes of business travel in some countries are on a slower trajectory.
As international work arrangements become more fluid with the continued evolution of hybrid arrangements, it will be essential for GM teams to determine their policy framework for governance, compliance and rigidity of policies. Another compelling driver to establishing more rigor in the initial business/people investment case and proactive engagement by GM in the planning process.
COVID-19 has altered the path of talent management forever. Remote working, virtual assignments and hybrid arrangements have become mainstream features of today’s mobility policy suite as an additional talent attraction and retention tool and a necessity to manage talent in the new COVID-19 normal.
Looking ahead, business leaders, HR and GM professionals must truly collaborate to elevate the strategic talent mobility priorities of their organizations at the board level, agnostic to unpredictable external factors impacting their operations (COVID-19, cost constraints, future workforce changes and digital disruption). Significant progress in equity, diversity and inclusion will also be critical to winning the new war for talent.
Global mobility’s role has transformed over the past decade, and the pandemic has catalyzed the rate at which its role has changed and will continue to evolve. It is unlikely that there will be a return to the old ways of working. As organizations focus on new markets, products and services within a more cost-effective business model will drive out redundant processes.
Enhancing the personal with the digital will become a balancing act. Maintaining control in a flexible and agile framework will rely upon a digitalized connectivity between all actors in international workforce arrangements. Many organizations are still assessing at leadership level how to get to grips with the increased governance required to comply with national legislation changes, bureaucracy and a zealous appetite to identify and prosecute compliance breaches, particularly those associated with cross-border remote working and virtual assignments.
On the talent front, it is evident that GM leaders expect there to be a resurgence in all talent types plus new hybrid ones, and that they are still looking to regularize into a consistent pattern of mobility. This is the conundrum. As the pandemic has blurred working patterns and assumptions on how people and work interact, individuals are simultaneously feeling more liberated from traditional work models, manifesting in more personal choice mobility requests occurring. Organizations and GM teams must redefine their boundaries and criteria for approving new hybrid and cross-border work arrangements. Whether it is a framework, compliance protocols and new policies—these will need to be embedded quickly.
GM’s coming of age during the pandemic era is daunting yet exhilarating in equal measure. There is no turning back—talent mobility is on the rebound.
Why We Can’t Afford to Keep Moving the Same Way
By Jessica Petzel, Director of Sales, PricePoint
2021 was one for the record books by just about every measure. There were far more families wanting to move than there were movers to serve them. The trucks that were supposed to move people from point A to B weren’t available. If you were relocating overseas, heaven help you. Many families weren’t simply moving from A to B; they were moving from A to temporary accommodation for an indeterminate period of time before moving to their final destination.
There were fewer drivers and even fewer laborers to help carry the load. In terms of scheduling and logistics, people weren’t moving into cities, they were moving out of them, meaning that qualified moving labor was even more difficult to find at destination. Some people sold most of their belongings and moved only the bare minimum, or put their belongings in long-term storage. Warehouse capacity backed up. The COD move—once the bottom of the heap—became the most lucrative for movers, with desperate consumers offering surplus cash in order to secure their move. Even rock-steady military volumes were skewed with a heavy demand for short-fuse moves.
In short, just about anything that could have gone sideways, did. Can we handle another year of this, or can we adapt the model to work better to keep move partners whole? PricePoint is fortunate to work with some of the best moving and mobility companies in the world. We strive to help move partners and their clients find solutions to make moving better. Here is some of what we’ve learned this year.
At the time of writing, peak season is just starting to drop off—but only just. The volume of moves being booked through PricePoint’s system in Q3 is nearly double that of what’s typical for this time of year. This ongoing pressure gives movers very little time to recover, plan, or hire staff to properly set themselves up for 2022. Analysts also expect that we will continue to be choked by the container backlog for months to come, putting the mobility industry at a significant disadvantage. Successful partners in our network have chosen to right-size their networks, work with likeminded suppliers to deliver on collective strengths, and diversify their supply chains to provide much needed flexibility to manage the unknowns that lie ahead.
Labor remains the issue among movers that we talk to. Those who’ve been in the moving industry long enough to have lived through the market crash of 2008 believe we had just started to recover from the loss of drivers and skilled workers prior to COVID. With this already tenuous footing, increased wages and retention bonuses were some of the incentives used by companies to keep their drivers on board this year. Moving companies were competing with just about every other industry needing qualified drivers, from freight to couriers.
And drivers weren’t the only labor challenge. Move coordinators—the backbone of moving operations—faced much higher responsibility, more stress, and increased workloads in 2021. Having to adapt to a constantly changing supply chain created approximately 50% more work per file. As long as HR and hiring remain significant issues, consider deploying technology to do some of the legwork for your team, and use your data and analytics effectively.
The only thing that’s certain is more uncertainty, so managing client and transferee expectations will remain critical to maintaining a healthy relationship. Capacity crunch, labor cost increases, increased operational time, materials costs, freight increases, fuel increases—these are the realities that movers live with every day. The better you can manage the customer’s experience and expectations, the better off everyone will be.
Given all this upheaval, it’s no surprise that consumer moving became the most profitable business over the past two years. Pricing in the consumer market is dynamic and is easy to change. By contrast, military, government, and corporate business typically utilize negotiated contract pricing, and those contracts will need to adjust to present attractive and profitable business for movers. There is no possible way to predict what’s to come in 2022, but as an industry, we saw costs go up, and that means pricing needs to go up. And while it’s hard to raise your rates, the right combination of transparency, data and insights can help justify the increase.
Despite the changes and difficulties COVID-19 has brought, the importance to companies of having the right people in the right place remains the same. The alternative of not moving the right person, and leaving a key position unfilled, remains more expensive than making that move. The ‘right place’ no longer necessarily means what it used to, however, with many positions becoming remote on a long-term or permanent basis. Increasingly, a destination may be determined by the employee rather than the company.
Throughout the period of disruption, global mobility professionals and companies have continued to provide invaluable service in the flow and retention of talent. Closed borders, expatriate evacuations, logistical crises, and many other disruptions have accelerated process change, from the growing inclusion of remote workers in the mobility sphere to the widespread adoption of video surveys in the moving process.
The common factors in the success of companies that will continue to grow and thrive in the coming years are resiliency and adaptability. Nobody knows what's going to happen next; we have been forced to recognize that disruptive events can happen anywhere and any time—new COVID variants, natural disasters, shipping backlogs, and more. We have also come to recognize that with effort and ingenuity, we can emerge from these events stronger than we were when they began.
Every company in the mobility and moving industry has found its own way to thrive or at least cope with the challenges of the past two years, and there is much we can learn from each other’s stories. Whether you find yourself on the front lines of “the War for Talent” or wondering if you need to gear up to support “the Great Realization (or Great Resignation),” a deep dive into the surveys above and other industry reports will help clarify the road ahead.
In global mobility, increased digitalization to support the remote worker and enhance the whole transition experience will become a key factor of success in the coming years. Global Mobility professionals will need to redefine their roles and increase their skillsets to streamline their program efficiency and control costs.
Moving companies would do well to take a page from mobility’s book and consider expanding their services (e.g., make a commitment to support customers after the move), and actively develop ways to add value to their offer make it more competitive, which will help to attract, retain and develop client relationships.
The one conclusion we can draw with confidence is that there will be no going back to what was considered ‘business as usual’ before the COVID-19 pandemic. Aside from the unpredictability of the rise of new COVID variants, the global business landscape has simply shifted too much. Changes in business processes and advancements in technology have been accelerated, and more adjustments will need to be made in order to sort out today’s shipping and logistics nightmares.
We are living in interesting times—keep watching the data, stay on top of the trends, and continue working to improve and innovate, because boring won’t be back for a long time, if ever.