hilldrup's 2014 talent management trends review

2014

Talent Management

Trends Review

Table of Contents

2014 Talent Management Trends Review

Introduction and Objectives …………………………………………………………………….. 3

Global Mobility Trends ……………………………………………………………………………….. 5

Global Mobility ………….……………………………………………………………………………….. 6

Assignee Demographics …………………………………………………………………………….. 8

Cross-Cultural Preparedness ……………………………………………………………………….. 9

Assignment Challenges ……………………………………………………………………………….. 10

Company Policy …….…..……………………………………………………………………………….. 13

Domestic Mobility Trends ……...………………………………………………………………….. 17

Domestic Migration ……………………………………………………………………………………. 18

Domestic Mobility ………………………………………………………………………………………. 19

Company Policy ………………………………………………………………………………………….. 21

Human Resources ……………………………………………………………………………………….. 26

Lump Sum Trends ……………………….……………………………………………………………….. 27

Lump Sums ……….……………………………………………………………………………………….. 28

1

What are the best ways to keep employees engaged?

What factors contribute to a failed assignment?

How and why are companies using lump sums to augment their relocation policies?

These questions are central to anyone involved in global mobility and employee relocations. Unfortunately, those same professionals routinely are required to wear more hats than is seemingly possible, and the time to make sense of these questions remains a rare luxury.

Reports from the Worldwide ERC and others do a thorough job tackling these trends, each with its own unique insight. But again, wading through several dozen pages of data is a task likely to remain at the bottom of your to-do list.

Aware of these constraints, the following is our 2014 Hilldrup Talent Management Trends Review – a visual snapshot of all the trends and analysis pertaining to our industry, so you can remain informed and up to date.

Included are many of the same questions and trends we featured last year, such as:

• What are the top growth markets where people are relocating?

• What are the top five cost-cutting strategies around relocation programs?

• What are the most common ways companies are providing family assistance?

• What are the top six reasons international assignees leave their position?

A new trend we explore in more depth is the rise of lump sum programs. A majority of companies are offering lump sums as part of their relocation policy packages. Our summary report takes a look as to why and how those companies are instituting such programs.

In everything we do at Hilldrup, it’s our goal to make you and your employees’ lives easier – whether that’s handling their relocation to a foreign country for a new assignment or helping you understand the issues impacting your organization’s relocation policy. Each chart in this report is referenced should you would like to learn more. If there are any questions concerning the report, or if additional information is desired, please feel free to contact your dedicated Hilldrup Client Services representative and we will be happy to assist you.

Introduction and Objectives

2014 Talent Management Trends Review

3

Global Mobility

Trends

1 Top 10 Emerging Global Market Countries

Global Mobility

Global Mobility Trends

6

1

International Assignee Population Growth

1. Brookfield Global Relocation Services • 2014 Global Mobility Trends Survey • (2014)• Pg. 15, 22

1. Brazil

2. China

3. India

4. South Africa

5. United States

6. South Korea

7. U.A. Emirates

8. Indonesia

9. Malaysia

10. Poland

2014

Decrease

(16%)

Increase

(40%) Stay the Same

(44%)

47% of companies reported an

increase in 2013.

40% of companies are projecting an

increase in 2014.

The international assignee population grew for the fourth consecutive year, and most companies are

projecting a modest growth for 2014.

2013

Decreased

(25%)

Increased

(47%)

Stayed the Same

(28%)

2

7

1

5

8

4

6

3

9

10

Global Mobility


7


2. Cartus • Trends in Global Relocation: 2014 Global Mobility Policy & Practices Survey • (2014) • Pg. 7

1 Countries with the Highest Rate of Assignment Failure

3. United States

Respondents cited difficulty with high cost of living,

culture and work adaptation, family issues, length of

stay, and began working for another employer.

2. Brazil

Respondents cited cost and safety concerns, cultural differences,

family issues, local infrastructure, and inability to adjust.

5. Mexico

Respondents cited spousal

resistance, inability to

adjust to business culture,

and language and cultural

barriers.

4. India

Respondents cited hardship,

recruitment by other

companies, family issues,

poor preparation, and

inability to adjust.

1. China

Respondents cited family issues, health

concerns, pollution, length of assignment,

distance from HQ, cultural and language

barriers, and local job offers.

2

Important Trends!

The trend towards an older international assignee population continues, with the majority

(54%) of the international assignee population being over 40.

Brazil, China, India, Singapore, Australia and the United Arab Emirates are some of the most

popular new destination countries for companies. Of these, Brazil, India and China are among

the countries cited with the highest rate of assignment failure.

The United States, China and the United Kingdom continue to be the most common

destinations, and most companies believe this trend will continue for the next two years.

1

Important Note!

51% of companies indicate less than 6% of their total

employee population have previous international experience.

Assignee Demographics

9% of current international

assignees are new hires.

49%

of companies indicated less

than 16% of their current

international assignees have

previous international

experience.

80% of international assignees

are male.


2. Cartus • Trends in Global Relocation: 2014 Global Mobility Policy & Practices Survey • (2014) • Pg. 4

1,2 International Assignee Demographic Snapshot


8

50 Plus

22%

30-39

33%

20-29

10%

40-49

35%

The international assignee population has remained fairly consistent over the last decade.

Family

Status

Married on

Assignment

with Family

46%

Single

30%

Married on

Assignment as

Single Status

24%

Age

Cross-Cultural Preparedness

Elder-care in Assignment Location

Relocation to Assignment Location

Visit to Member in Home Country

1

43% of companies offer

media or web-based

training, as opposed to 50%

in 2013.

1

57% Family

5% Assignee Only

33% Assignee and Spouse/Partner

5% Other

Of those who offer cross-cultural training,

eligibility is granted to:

Family Assistance

84% of companies provided formal cross-cultural preparation, and nearly 90% of assignees rated their

cross-cultural training as having a ‘Good’ or ‘Great Value.’

Training

1. Brookfield Global Relocation Services • 2014 Global Mobility Trends Survey • (2014)• Pg. 43-45, 49, 50

71%

55%

40%

37%

Intercultural Training

Education / Training

Language Training

Career Planning Assistance

Spousal Assistance The most common types of spousal assistance provided include:

Elderly Assistance 6% of companies offer assistance for elderly family members; the most common types of assistance are:

20%

50%

50%


9

1

Assignment Challenges


10

1 Top 5 Reasons Candidates Turn Down an Assignment

Family Concerns 37%

19%

13%

12%

7% Quality of Life at Location

Assignment not Meeting Assignees’ Career Aspirations

Spouse/Partner’s Career

Inadequate Compensation


Cost of Assignment

Compliance

Career Management During Assignment

Concerns About Children’s Education

Assignee Adjustment to New Environment

Managing Policy Expectations

Complex Administration Program

Finding Suitable Candidates

Inability to Use Experience Upon Repatriation

Mobility Team Resources 4%

4%

5%

5%

6%

6%

7%

12%

12%

20%

Top 10 Assignment Management Challenges

Companies were asked to rank their most common assignment management challenges;

the top challenges cited were:


1

Companies reported 5% of assignments fail, of those that fail the top reasons given were:

Top 5 Reasons International Assignments Fail

1

1. Brookfield Global Relocation Services • 2014 Global Mobility Trends Survey • (2014)• Pg. 59- 61

Return Attrition

Respondents were asked how long an assignee

remained with a company after returning from an

overseas assignment.

76% of assignees leave a company within two years of returning from an overseas assignment.

Top 4 Ways Companies are Seeking

to Minimize Turnover

19% Provide assignees with greater ways to use their international experience.

18% Guarantee a position upon completion of the assignment.

11% Offer repatriation career support.

11% Offer greater choice of positions upon return.

Attrition Timing and Assignee Turnover

Left While on

Assignment

21%

Less Than 1

Year

29%

Between 1 - 2

Years

26%

Over 2 Years

24%


11

11%

12%

13%

15%

19%

Poor Candidate Selection

Inadequate Job Performance

Spouse/Partner Dissatisfaction

Inability to Adapt to a Host Country

Leaves Work for Another Company


1 Critical Family Challenges

Companies where asked to list the top family challenges affecting international assignee success.


12

1. Brookfield Global Relocation Services • 2014 Global Mobility Trends Survey • (2014)• Pg. 47

3%

8%

9%

10%

12%

22%

38%

40%

42%

Length of Assignment

Support for Other Family Members

Spouse/Partner's Career

Inability to Speak Language

Intercultural Adjustment

Location Difficulties

Family Adjustment

Spousal/Partner Resistance

Children's Education

Company Policy


13


2 2

1 Cost Reduction

72% of companies indicated they were reducing expenses for international assignments in response to

economic conditions—the historical average is 63%.

1 Top 6 International Assignment Objectives

8%

8%

10%

21%

23%

26%

Technology Transfer

Local Relationships

New Endeavor

Career Development

Fill Skills Gap - Technical

Fill Skills Gap - Managerial

7%

9%

18%

20%

28%

Increased Reliance on Local Hiring

Closer Scrutiny of the Assignment's

Tax Ramifications

Closer Scrutiny of Supplier Fees

Policy Components Offered to

Employees

Closer Scrutiny of Policy Exceptions

Top 5 Cost Reduction Strategies

Company Policy

1

Important Trend!

A historically high number of respondents (92%) indicated that they standardized their

policies on a global level as opposed to a regional or divisional level. This trend mirrors

the movement towards the centralization of global mobility decision making—with 90%

of respondents indicating their decisions were made globally.

1

1. Brookfield Global Relocation Services • 2014 Global Mobility Trends Survey • (2014)• Pg. 9


14

0%

20%

40%

60%

80%

100%

The Trend Towards Centralized Global Mobility Management

Companies were asked over time whether their global mobility programs were managed globally or

regionally, and we can see a clear trend emerging towards a global approach to mobility management.

Global Mobility Management Local Mobility Management

1 Important Note!

75% of companies see a demand for increased flexibility in their mobility program - with

budget constraints being the number one concern . While ad hoc (41%) solutions are

still the most common way to deal with this need, tiered programs (39%) and lump sums

(38%) are becoming increasingly prominent.

Company Policy

1


15

1. Cartus • Trends in Global Relocation: 2014 Global Mobility Policy & Practices Survey • (2014) • Pg. 6, 7

75%

Cost Control

62%

Overall Compliance

57%

Immigration

Top 3 Organizational Challenges

Companies were asked to rank their most common organizational challenges, the top three included:

Domestic Mobility

Trends

Domestic Migration

Top 5 Inbound States:

1. Oregon

2. South Carolina

3. North Carolina

4. District of Columbia

5. South Dakota

Top 5 Outbound States:

1. New Jersey

2. Illinois

3. New York

4. West Virginia

5. Connecticut

Oregon was the top inbound destination in 2013. The District of Columbia fell from the number one

spot on the inbound list after five consecutive years at the top. Michigan is now a balanced state after

being on the outbound category since 2006.

1 States with the Highest Inbound/Outbound Migration

1. United Van Lines • United Van Lines 2013 Migration Study • (2013)

States with Higher Inbound Migration States with Higher Outbound Migration Balanced

Domestic Mobility Trends

18

Domestic Mobility


1 Employees Still Choosing to Rent Instead of Buy Even as we see more stability in the housing market, the trend of home-owning employees choosing to rent

in their new location as opposed to buying a home continues. Companies were asked whether they saw

more or less transferees choosing to rent in their new location.

1. Worldwide ERC • Data Driven: Talent Mobility and Talent Management • (2014) • Pg. 4, 5

Balanced

7%

0%

7%

49%

31%

6%

Don't Know

Significant Decrease

Slight Decrease

Remained the Same

Slight Increase

Significant Increase

10%

4%

9%

40%

29%

7%

Yes - Already Reduced

Yes - Plan to Reduce

Contemplating Reduction

No Plan to Reduce

Do Not Offer

Don't Know

Loss-on-Sale Assistance

Companies were asked if they were looking at reducing their loss-on-sale assistance as the housing

market continues to show signs of recovery.

1

19

(Within 12 Months)

*Does not total 100% due to rounding.

Cost of Living in New Locations

Personal Reason (Non-disclosed)

No Desire to Relocate

Housing/Mortgage Concerns

Spouse/Partner's Employment

Family Issues/Ties

1 Top 6 Reasons Employees are Reluctant to Relocate

Companies were asked to rank the top reasons employees were reluctant to relocate,

the top six cited answers were:

Domestic Mobility

Corporate-Based Home

Purchase Plan27%

Third-Party Plan60%

Direct Reimbursement

13%

2 Home Sale Assistance 87% of companies that offer home sale assistance report using a home purchase program as their

primary form of assistance, while 13% offer their employees a direct reimbursement.

2. Worldwide Employee Relocation Council • U.S. Transfer Volume & Cost Survey • (2014) • Pg. 70


1. Atlas Van Lines • 47th Annual Atlas Corporate Relocation Survey Results • (2014) • Pg. 20

20

68%

52%

42%

40%

37%

35%

14%

20%

28%

33%

42%

52%

58%

71%

74%

Handle Office Relocations

Handle Air Travel (via Commercial Airlines)

Control Freight Carrier Selection

Impact Talent Management / Recruitment Decisions

Manage International Relocation Program

Control Additional Relocation Services

Control Household Goods Carrier Selection

Develop Relocation Policy

Manage Domestic Relocation Programs


Company Policy

1 Responsibilities of an Internal Relocation Department

1 Tiered Relocation Policies

70% of companies with a centralized relocation department utilize a tiered relocation policy.

Top Criteria Used to Create Tiers Number of Tiers in an Organization

31%

37%

38%

70%

Position or

Job Title

Job or

Grade Level

1. Atlas Van Lines • 47th Annual Atlas Corporate Relocation Survey Results • (2014) • Pg. 24, 25

Two Tiers

22%

Three Tiers

22%

Four Tiers

13%

No Tiers

30%

Five + Tiers

13%

New Hire or

Current Employee

Homeowner

Renter Status

Companies with an internal relocation department were asked what their department was responsible for,

their answers included:

21

*Companies were asked to

list all criteria they used to

create tiers.

Company Policy

1 Incentives

65% of companies offered additional assistance to encourage employees to relocate.

Types of Incentives Provided to Employees

Important Note! 77% of companies have a formal relocation policy.

72% Extended Temporary Housing Benefits

54% Relocation Bonuses

45% Cost of Living Adjustments in Salary at New Location

31% Extended Duplicate Housing Benefits

29% Loss-on-Sale Protection



22

Company Policy

1

1 Top 5 Cost Containment Measures

16%

18%

21%

30%

46%

Restructure Policy Tiers / Benefits Eligibility

Review / Renegotiate Supplier Contracts

Limit Miscellaneous Allowance Benefits

Cap Relocation Benefit Amounts

No Additional Cost Containment Measures

Companies were asked to list the cost containment measures they used last year.

71% of companies use some type of core coverage/flex policy. Companies were asked which aspects they

incorporate into their policy.


Core/Flex Policy

45%

16%

10%

48%

12%

12%

Coverage of Specific Items

Flexible Use of Full Relocation

Flexible Use of a Portion of Relocation

Benefit

Dependant on Employee Levels or Categories All Employees


Flexible Use of a Portion of Their Benefits

Coverage of Specific Items

Flexible Use of Their Full Relocation Benefits

23

Dependent on Employee Levels or Categories All Employees

Company Policy

1 Types of Reimbursement Offered to New Hire Transferees

0%

10%

20%

30%

40%

50%

60%

70%

80%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Full Reimbursement Lump Sum Partial Reimbursement


1 Cost Covered by Reimbursement

Partial / Custom Unpack

Unpack All Items

Move Exercise Equipment

Move an Automobile

Pack All Items

Move a Second Automobile Move Recreation and Lawn Equipment

Move Unlimited Weight 30%

31%

33%

39%

40%

40%

64%

70%


24

Company Policy

1 Top 5 Policies Companies are Considering Implementing

Companies were asked where their mobility function reports within their corporate structure.

Human Resources

43%

Compensation & Benefits

42%

Talent

Management5%

Other10%


1 Global Mobility Function Reporting

21%

23%

27%

29%

31%

One-way Permanent Transfer

Extended Business Travel

Local Plus Transfer

Localization

Developmental Assignment

Companies were asked to rank which policies they were considering for future development, the top answers

included:

Domestic Mobility Trends 25

1. Confidence in organization’s future.

2. Promising future for oneself.

3. Organization supports work-life balance.

4. Contribution is valued.

5. Excited about one’s work.

6. Opportunity for growth and development.

7. Safety is a priority.

8. Leadership has communicated a motivating vision.

9. Organization’s corporate responsibility efforts increase overall satisfaction.

10. Quality and improvement are top priorities.

2


Human Resources

1 Top 5 Human Resource Challenges

1. Worldwide ERC • Integrating Talent Management & Global Mobility • (2012) • Pg. 50

31%

33%

35%

39%

47%

Performance Management

Employee Retention Turnover

Culture Management

Succession Planning

Employee Engagement

Top 10 Employee Engagement Drivers

2. IBM Software • Beyond Engagement: The Definitive Guide to Employee Surveys and Organizational Performance • (2014) • Pg. 7

26

Lump Sum

Trends

Lump Sums

1

1. Worldwide Employee Relocation Council • 2013 Worldwide ERC® U.S. Transfer Volume & Cost Survey • (2014)• Pg. 69

Lump Sum Trends

Offer Lump Sum Only Policy to All

Employees

10%

Offer Lum Sum Only Policy to Some

Employees

25%

Offered on Specific Policy Components

37%

Plan to Offer in the Future

6%

Do Not Offer and Do Not Plan to Offer

22%

How Companies Offer Lump Sum Policies

To Reduce Costs41%

Ease of Administration18%

Increase Employee

Sense of Flexibility18%

Other23%

2

Reasons Companies are Using Lump Sum Only Policies

2. Worldwide ERC • Data Driven: Global Lump-sum Payment Survey• (2014) • Pg. 6

28

Lump Sums

1

How are Lump Sum Only Policies Tiered?

8%

25%

42%

50%

67%

Current Employee / New Hire

Family Size

Homeowner / Renter

Type of Assignment

Job Level

66% of companies tier

their pay-for-component

lump sum policies.

66%

65%

65% of companies tier

their lump sum only

policies.

1

How are Component Lump Sum Policies Tiered?

15%

8%

15%

27%

35%

54%

Other

Current Employee / New Hire

Homeowner / Renter

Family Size

Job Level

Type of Assignment

Lump Sum Trends

1. Worldwide ERC • Data Driven: Global Lump-sum Payment Survey• (2014) • Pg. 4, 5, 8, 9

29

Lump Sums

1 Lump Sum Payments


Who Receives Lump Sums: Costs Typically Covered by Lump Sum:

New Hires 59%

50%

43%

42%

41%

39%

28%

Experienced Professionals

Entry Level Employees

Existing Employees

Executives

Renters

Homeowners

53%

41%

32%

16%

15%

5% Other

Real Estate Assistance

Rental Assistance

Household Goods Shipping and Storage

Temporary Housing

47% Travel Expenses

42% Entire Relocation Cost

Miscellaneous Allowances

Lump Sum Trends

30

Lump Sums

Lump Sum Trends

1. Worldwide ERC • Data Driven: Global Lump-sum Payment Survey• (2014) • Pg. 5

Other25%

Industry Benchmarking Data18%

Third-Party Data21%

Historical Company Data36%

2 2

What are Employees Receiving?

$11,305.00

$12,441.00

$34,364.00

Current Employee Transfers

Experienced Hires

Executives

1

How are Companies Determining Lump Sum Amounts?

2. Urbanbound • What’s the Deal With Lump Sum? • (2014) • www.urbanbound.com

On average, lump sum allowances for employees are:

31

1 Average Lump Sum Ranges

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Household GoodsShipping / Storage

Entire Relocation Cost Rental Assistance /Transactions

Travel Expenses Temporary Housing MiscellaneousAllowances

$5,000

Lump Sums


Lump Sum Trends

Companies were asked, from the policy components listed below, what are the typical compensation amounts

of the lump sum benefits offered? The median ranges were:

32

$4,999

$2,500

$2,499

$1,000

$9,999

$4,999

$1,000 $1,000

$2,499

$4,999

$2,500

Lump Sums

Yes46%

No43%

No - But Considering11%

1 Lump Sums for International Moves

Important Note!

50% of companies

that offer lump sums

on international

moves have been

doing so for less than

three years.

1

What Lump Sum Expenses are Meant to Cover

on International Assignments

Long-term Short-term Permanent

Type of Expense Assignment Assignment Moves Localizations Developmental Voluntary

Home Finding Trip 50% 26% 30% 40% 23% 20%

School Finding 31% - 17% 27% 8% 40%

Temporary Living 34% 33% 26% 27% 23% 20%

Home Sale at Origin 9% - 17% 7% - 20%

En-route Travel 25% 4% 13% 7% 8% 20%

Settling-in Services 50% 44% 35% 20% 37% 80%

Household Goods Shipping 44% 37% 44% 33% 31% 80%

Misc. Expenses 53% 59% 57% 53% 54% 60%

Home Purchase / Rental Costs 31% 19% 26% 13% 8% 40%

Companies with international relocation programs were asked if they used lump sums for their programs.

Lump Sum Trends

1. Worldwide ERC • Data Driven: Global Lump-sum Payment Survey• (2014) • Pg. 2, 7, 10

33

Companies who offer lump sum relocations on international assignments were asked what their program

benefits were meant to cover; the following summarizes the responses given for a variety of relocation

classifications.

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hilldrup's 2014 talent management trends review

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