Global Relocation Trends Survey

Come back soon, think twice about relocating to the U.S. and leave the kids at home. That was the overwhelming message from companies last year to their executives as they headed to other countries for business assignments, according to the 10th annual Global Relocation Trends Survey. The 76-page report was conducted and issued jointly by GMAC Global Relocation Services, the National Foreign Trade Council and the Society for Human Resource Management.

Reflecting widespread unease over the global economy in 2003, both large and small firms sought to contain the costs associated with relocating employees and their families. Companies surveyed indicated that up to 70% of their transferring employees would have an assignment length of just one year or less. This represents a major shift from the past historical average, in which just 13% of all assignments were for a year or less.

Specific Findings

This year's survey had more than its share of interesting—and in some cases, surprising—findings. For example:

• Only 51% of relocating employees last year had children in tow—the lowest percentage ever in the history of the survey.
• For the first time, the United States was listed as one of the world's three most challenging countries for relocating employees—behind China and Japan, respectively, largely due to the threat of terrorism and the measures put in place to prevent it.
• Nearly 70% of respondents rated their "Return on Investment" as good or excellent. However, only 46% said they were able to compare actual costs to estimated (budgeted) costs, and nearly 40% indicated they were not sure about the career value of international experience. Considering the scrutiny of other investments organizations make to cultivate management talent—from management development and executive education to MBA programs—GMAC Global Relocation Services executives found this somewhat surprising.

"While many organizations believe in the importance of an international assignment to help develop talent and strengthen their companies, it is clear that additional help is needed to demonstrate the economic value and tangible benefits international transfers can offer," said Rick Schwartz, president and CEO of GMAC Global Relocation Services. "This is a topic that an increasing number of clients want to discuss and which becomes even more important when international assignments increase, as we fully expect to occur in 2004."

Other Major Shifts

The survey uncovered still other major shifts in the way international transfers are being managed compared to last year's survey:

• 64% of respondents indicated that their companies were attempting to reduce international assignment expenses in response to current economic conditions.
• More than half of respondents indicated that they were seeking alternatives to long-term assignments.
• Increasingly, companies are relying on local hiring as a substitute for sending expatriates on assignments.

Maggie Ryan, senior vice president of Global Operations, said the extent to which companies are curtailing longer-term assignments has been an evolving trend. "While the world economic climate may be a predominant factor in this development, it's also reasonable to assume that political instability in its various forms also contributes to this trend," Ryan said. The survey findings, she said, offer a "fascinating snapshot of the global business climate, and will be an extremely useful benchmark for companies as they develop the talent of their future boardroom members and senior executives."

Concerns about employees' children's education are key issues for relocating families, and survey officials said companies may be selecting employees for assignments who don't require the efforts and costs inherent to locating and paying for "host country" education.

America: Land of Opportunity—and Too Many Obstacles?

Each year, the survey determines which countries pose the greatest challenges to relocating employees in terms of language, culture and other obstacles. China perennially tops the list, as it did once again this year.

But in third place this year, behind Japan, was a newcomer: the United States.

The United States, in fact, was cited as being particularly challenging for relocating employees as well as by human resource professionals who handle the transfers. Chief among the complaints about assignments in the United States were delays in obtaining social security numbers and visas, immigration restrictions, and dissatisfaction with the U.S. Citizenship and Immigration Services (USCIS), formerly known as the Immigration and Naturalization Service (INS). Survey officials said most of these complaints are the result of new security measures that have been instituted in response to the threat of terrorism.

"This year's survey captures some of the business repercussions involving mobility to the U.S. in an environment of increased security," said Brian J. Glade, vice president of international programs for the Society for Human Resource Management. "Much of this burden appears to be falling on HR professionals to balance the new security policies with the needs of their business."

About the Survey

This year's study reflects responses and data from 134 multinational organizations, representing 7,486 offices across the globe. Together, these companies managed a worldwide expatriate population of more than 31,000, with nearly 80 percent of the respondents' headquarters based in the United States. A copy of The Global Relocation Trends Survey is available at http://www.gmacglobalrelocation.com/surveys.html.

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