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Category: Talent Mobility

A More Balanced Real Estate Market in 2019?

| December 13, 2018

While all real estate markets are local, recent data suggests that even the hottest US sellers’ markets are beginning to cool down. For companies that relocate employees, that should be mostly good news as we look at the real estate market in 2019.

“The signs are pointing to a market that’s shifting toward buyers,” says Danielle Hale, chief economist of realtor.com®. “But in most places, we’re still a long way from a full reversal.”

The real estate market has more than recovered from the 2008 economic crisis, and some coastal cities seemed to be entering bubble territory. The median home price in Manhattan rose from $400,000 in 2000 to $1.29m this year. During the same period, the median in San Francisco increased from $415,000 to $1.35m. Part of this growth is driven by booming local economies and constraints on new housing construction—particularly of the more affordable variety. Read More

Impact of U.S. Elections on Mobility

| November 30, 2018

us election mobilityThe following post was originally published on November 29, 2018 by Worldwide ERC.

Dear colleagues:

The movement of government offers clues to the way business will unfold, as new lawmakers enter and others depart. With the recent elections in the United States, we want to provide you with an understanding of the impact such changes could have on mobility.

On November 6, midterm elections (which occur halfway between presidential elections for open Congressional seats) were held, resulting in Democrats taking control of the U.S. House of Representatives and Republicans expanding their majority in the United States Senate to 53-47. Democrats gained a net of 40 seats in the House. Read More

What is a Short Term Developmental Assignment?

| June 26, 2018

STDAShort Term Developmental Assignments (STDAs) are an increasingly popular tool for businesses to accomplish specific, finite projects and to develop employees while containing costs. Domestic STDAs really seemed to take off in the U.S. in the aftermath of the Great Recession. Concurrently, international short-term assignments, which have been on the radar longer, grew in popularity as companies looked for ways to reduce the cost of international relocation. Read More

Worldwide ERC® Releases New Future Mobility Skills Report

| May 23, 2018

Talen Mobility Leaders - Decode the FutureThe global mobility industry is challenged by a shortage of talent and skills, supported by innovative technology and automation, and comprised of a variety of demographics and generational preferences. Additionally, it includes organizational transformations and a global community of mobility professionals. Taking all of these conditions into account, Worldwide ERC® developed its new report, The Perfect Storm: Talent Mobility Leaders Decode the Future.

The report includes recommendations for professionals to build their skills as strategic partners and to gain a better understanding of a rapidly advancing global mobility landscape. You’ll also read about:

Read More

How are Companies Now Treating Employee Moving Expenses for Tax Purposes?

| April 27, 2018

Employee Moving ExpensesThe passage of the Tax Cuts and Jobs Act in late 2017 and its almost immediate effective date of 1 January 2018 took many in the mobility industry by surprise. One key change, the repeal of the employee moving expenses deduction, left many companies wondering about the tax treatment of three common relocation benefits that historically have been tax deductible for transferees:

• Household Goods Shipment (including pet and automobile shipments)
• Household Goods Storage Expenses
• Final Move Expenses Read More

Lump Sum Policy Best Practices: Pros & Cons of Supplemental Lump Sums

| January 14, 2018

supplemental lump sumsAs the name suggests, companies offer supplemental lump sums to cover part of an employee’s relocation costs, not all of them. About one-third of TRC’s clients utilize the supplemental lump sum to cover benefits such as the home finding trip, temporary living and the final move. Companies usually tailor supplemental lump sums to each employee’s move, often by pricing accommodations through preferred providers and including pre-determined amounts for mileage and meals.

According to the Atlas World Group 2017 Corporate Relocation Survey, 50% of companies are using a supplemental lump sum to cover temporary accommodation costs, up from 38% – 43% in years 2011 through 2014. In its 2017 Workforce Mobility Benchmark Report, Runzheimer noted that nearly 50% of the organizations they surveyed manage home finding expenses via a supplemental lump sum. Read More

Lump Sum Policy Best Practices: Pros & Cons of a Core/Flex Program

| December 27, 2017

lump sum policyWhen discussing lump sum policy, the core/flex policy is an attempt to provide greater flexibility and a better employee relocation experience for the employee while allowing the employer to meet global mobility objectives and contain costs. A perennial complaint of transferring employees is that relocation policies include benefits the employee neither wants nor needs, but do not include alternative benefits that better meet the employees’ needs.

These benefits go unused, which saves the employer money but can leave the employees feeling like their needs have gone unmet. Occasionally, relocating employees ask to trade undesired benefits for ones that are more relevant (e.g. an extension of temporary housing instead of spouse counseling). Most employers view these request as exceptions to policy and deny them.

With a core/flex program, companies often choose to retain a tiered methodology, with tiers typically differentiated by job grade or homeowner/renter status. There is also a trend to have a dedicated “executive” tier for higher-level employees. Within each policy tier, there are specifically defined (core) benefits. Companies determine which core benefits to include by analyzing historical benefits usage data. The core benefits do not have a monetary cap or limit, but employees must use them exactly as defined in the policy. Read More

Managed Lump Sum Program: Pros and Cons to Consider

| December 22, 2017

managed lump sumA managed lump sum policy is similar to a traditional fixed lump sum except the company specifically defines the benefits covered by the lump sum in its policy guidelines. These benefits are sometimes presented as menu items, allowing the employee to choose benefits that best suit his or her needs. Other companies calculate the lump sum based on the benefits they intend to provide. Either way, the company typically provides relocation counseling (either in house or through a third-party provider) to help the employee use the funds most effectively. Unlike the traditional fixed, any unused funds revert back to the company. The company calculates the managed lump sum amount using the same methods as the traditional fixed, sometimes with the assistance of a third-party data provider.

Pros of a Managed Lump Sum Program

This model allows companies to track benefit usage and spend much more reliably than the traditional fixed. This closer control will also help the company to manage costs better with a vetted network of relocation service partners to ensure optimum pricing and quality. From a tax perspective, the employer can make direct vendor payments, allowing it to treat each of the components individually as taxable or non-taxable.  Read More

Proposed 2017 Tax Reform and the Substantial Effects it Could Have on Talent Mobility

| November 17, 2017

tax reformOn November 2, 2017, the U.S. House of Representatives Ways and Means Committee released new tax reform legislation entitled the “Tax Cuts and Jobs Act.”  Although currently in review and not yet passed into law, there are portions of the proposed tax law that would bring about a significant shock to the global mobility industry.  Because of the impact that this bill as it stands would have on our industry, it is imperative to understand what the current proposals entail and what the consequences would be as we move forward into 2018.

Elimination of the Household Goods Moving Expense and Final Move Non-Meal Expense Deduction

The household goods move for the employee is currently seen as excludable or non-taxable.  Under the proposed bill, all of these costs will become taxable in 2018 and corporations will need to determine if they are willing to cover the cost of the taxes (or gross-up) on behalf of their transferring employees.   As the household goods move is typically one of the most expensive relocation benefits offered (second only to the sale of the home), the financial ramifications for both the employer and the employee are considerable.  For example, if a household goods shipment costs $20,000.00 and the estimated gross-up to cover the taxes on the shipment would be $13,000.00, the employer would face an additional $13,000.00 in relocation fees, and the employee would see $33,000.00 of additional taxable income in their W-2—just for the household goods shipment alone. Read More

Evaluating Corporate Relocation Companies and Selecting the Right Partner for You

| August 16, 2017

World globe with airplaneIn developing specifications for a new, outsourced provider, it is best to begin with an evaluation of your current process and policies, and a frank assessment of how well they meet the needs of your internal customers (recruiters, managers and relocating employees). You will probably identify aspects that are working well, and that you want the outsourced provider to continue, and others that could be better. Documenting and clearly articulating your needs, expectations and goals will make it easier to evaluate relocation companies and to determine the parameters of the outsourced program. Read More

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