The Changing Faces of Domestic and Global Mobility Practices

The global mobility landscape continues to experience a period of growth and evolution – in population volumes, global expansion and inclusion of non-traditional assignment types, all in support of ever-changing business and talent priorities. In recent years, however, there has been a shift in both business and employee perspectives and the approach to global deployments. However while many aspects of global mobility evolve, the need to relocate top talent remains consistent.

Presenter(s):

Taryn Kramer
Vice President, Global Consulting
SIRVA Worldwide Relocation & Moving

Jill McDonald 
Vice President, Policy Consulting 
SIRVA Worldwide Relocation & Moving 

VIDEO TRANSCRIPTION (starting at 04:32)

Taryn: Thank you, everyone, for joining us today. We're pleased to be sharing some information with you. It's an exciting time to be part of the mobility industry. There's a lot that's going on and there's a lot of interesting and very creative things happening with mobility programs across all organizations.

Today we're gonna go through a couple items. We'll start with just talking through a little bit around what the mobility landscape looks like today. We'll then talk through some different relocation program approaches that your organization or you may be familiar with. We'll talk through some relocation policy types that deviate a bit from the very traditional policy types that you see both on the global and the domestic side. And then we'll talk through some additional relocation-based services that we're seeing provided to employees that are relocating, a bit of a shift in terms of what companies are looking to include in their policies. So we'll talk through a little bit of that information.

The Mobility Landscape

Alignment Within Growth and Talent Priorities

So we'll get kicked off, and I'm sorry I will advance the slides. We'll get kicked off, talking about the mobility landscape. We have five kind of trends or items identified here, the first of which is the alignment with growth and talent priorities. So nothing earth-shattering here. I think we've all been hearing about this for a few years now, but there really is still a lot of pressure or push to align your mobility program within an organization to support the business growth and talent priorities of the organization.

As we look at some of the pressures around resourcing and filling gaps, some of the challenges that I think organizations are experiencing as we look at, you know, things like Brexit and some of the U.S. immigration changes that have been taking place this year, it really does become a critical issue for organizations to not only staff for open positions that they have within their organization, but also to provide opportunities for individuals to grow and develop, you know, manage their succession planning and career development. And mobility really is a key element there that helps to enable some of those priorities.

So still focusing on that, and I think we'll hopefully start to see more and more organizations moving in that direction, where they can move away from, you know, a lot of rhetoric around that and actually see some better alignment between mobility programs and organizational priorities.

Risk Detection and Management

The next item on our list is risk detection and management. I'm sure most, if not all of you, have heard a lot about the increased compliance focus for travelers that cross borders, both domestic and international. There's also a lot of focus just on different assignment types, and making sure that individuals are being tracked appropriately, and that all compliance requirements are being met from a tax and immigration when you start talking about the global.

It's a way for the taxing authorities in all jurisdictions to potentially gain some additional revenue for their specific location. It's these folks are often highly compensated, and so any failure to comply could potentially be a very significant source of revenue for certain countries. So there's a lot of focus there, there's a lot of people, you know, or there's a lot of companies, I guess, that are more and more focused on this. We often refer to this population as a bit of a hot potato item. No one really knows who owns these extended business travelers or short-term business travelers as they're often referred to.

And so it becomes a bit of a battle in terms of who's gonna take responsibility for them. But I think across the board, everyone recognizes that there need to be some very robust policies and processes in place to manage this type of population to avoid or at least minimize any potential risk for the organization as well as the traveling employee.

Assignment Demographic and Geographical Shifts

We're then seeing a bit of a shift in assignment demographics and kind of geographical shifts. As we experience some additional pressures to find different locations or demographics to fill certain resource and talent needs within an organization, the pool of who is eligible, who's being tapped for a relocation, again whether it's domestic or global, is growing, where it used to be relatively narrow and relatively reserved for, you know, more of the senior level folks within an organization. We're seeing that talent pool widening.

While that's a great thing for those of us that are looking for opportunities in this space, it becomes a bit difficult from a program management perspective. You have different ways of doing business and you have different preferences in terms of what you need to support you both from a career and from a personal perspective. So mobility programs are having to get and policies are having to get pretty creative to make sure that they can address those different demographic and geographic needs, to really make sure that they're providing the best possible experience for the employee, as well as the mobility customer within an organization.

Policy Support Delivery (Flexibility and Cost)

A little bit similar and kind of tied into that is a move towards being more flexible in terms of how policy support is not just the nature of the support that's provided, but also how it's delivered. So, you know, not necessarily removing or adding anything to policy, but potentially delivering it in a different way. We have a few slides and some information later during our session regarding lump sums. I think it's something that everyone's gonna be familiar with. It's a way to provide some flexibility and really put more responsibility and control in the hands of the employee in terms of how they spend their relocation dollars.

Increase in interest in Core/Flex programs, historically those have been confined to predominantly domestic relocations, but we're definitely getting more and more inquiries around does it make sense to implement a Core/Flex program for global move?

Technology/Data Analytics

And then the final kind of landscape item that...ooh, sorry, that we have here is just around technology and data analytics. Again probably something that you've heard a lot about already, but there's really a lot of focus, there's a lot of organizations there really investing a lot of money into their technology infrastructures, both from a corporate side as well as from a provider side. We recognize the power of all the data that we have. When you look at people that are relocating from one location to another, they take with them a lot of data and they hold a lot of data.

And being able to use that to not only provide a better experience for corporate customers, and internal customers as well as the relocating employees, but also using it to really plan. You know, you can look at what type of profile of an employee is successful moving from a given location to another, you can look at that historical data. You can take a look and, you know, marry some of your mobility data up against some of your workforce planning data to better anticipate where there potentially are some resource gaps or resource needs down the road, and you can start to proactively plan and anticipate those needs. Again just with an eye on providing the most positive experiences possible for the mobility customers and employees.

Relocation Program Approaches

Traditional

When we look at some of the different relocation program approaches, so what you see, and we still see or we do see, I should say, a mix of all of these, as we kind of look across all the corporate clients that we work with. The blue or the top one is the more traditional approach, where on the domestic side you usually have different tiers that are driven based on employee level or, you know, different move types in the global space. Usually you're talking about long-term, short-term, perm relocation when we talk about some of the traditional move types.

Flexible

We then start to see more introduction around segmentation, so recognizing that different move types have different value for both the organization and for the employee from a career perspective. And that support for those moves should be provided in line with what that value is for either the employee or the organization.

Core/Flex, which again is kind of been around for domestic for a while now, still definitely seeing that in the marketplace. And then this kind of Fixed/Flex approach where it's a little bit directive in terms of certain items, but very flexible in terms of other elements of program support. Within this space we're seeing a little bit of movement towards or, I should say, away from corporate or organization-directed flexibility or segmentation, towards more employee-driven flexibility or customization. So creating programs that allow for the employee to really go in and select some of their core or flexible support elements based on what's a priority for them, and if they have any accompanying family.

So providing, you know, some guardrails for them to operate in, they can't just pick and choose everything, but really allowing them to...you know, if schools are very important for them as they relocate, being able to kind of prioritize spend related to school versus, you know, spouse or career support potentially. So in theory, each and every package could be very different for the arm seeds of the, you know, the vendors or service providers on the phone that makes it very interesting for us because you essentially are kind of looking at different packages with each move type.

For the employee I think it's really positive. It's a way for them to feel like their organization is really supporting them and recognizing that their needs are not necessarily the same as their peer, despite moving from the same location to the same location. So it's really about a lot of customization there in terms of package development.

Lump Sum Allowances

And then the lump sum allowance, which again we'll go into, you know, we talk a lot about lump sum allowance here at SIRVA, and it's interesting because there's a lot of different definitions to lump sum. And I think organizations use that term very loosely in some instances, and we're not always speaking apples to apples when we do talk about lump sum allowances. So we'll dive into that a little bit more as we get a little further in our session today. Jill, are you on the line? I know you were having some technical challenges.

Jill: Hey. Hello?

Allison: Yup, we hear you.

Flex Pros and Cons

Jill: Okay, thank you. I don't want you to see me though. Flexible, Core/Flex, Fixed/Flex, whichever the name, there's definitely pros and cons to offering these types of programs. So some of the pros are really that you can meet the company and the employees' need by offering this flexibility. And it can control relocation costs, it reduces the exceptions. Just one moment please. There we go.

It reduces exceptions and actually also reduce having to say no. It offers flexibility as the relocation progresses. So maybe at the beginning you're not sure of what you're gonna need but you do as time goes on. And it engages the employee in the cost. Suddenly it's not, "Here you go, I don't care what you spend." Maybe the flex benefits are capped and so now you have the employee caring about how much they're spending.

And of course, it attracts mobile talents without a doubt. It doesn't matter if we're talking international or U.S. domestic, Canada, you know, it's gonna attract talent no matter what the age, I believe. Now there are some cons. And just creating and implementing a new customized program can be difficult. A lot of people don't want to go through it, but if you're willing to do it, it's a great program to use.

It can be a little bit more time consuming actually for the relocation consultant from an RMC to describe the policy to the employee, because maybe they're getting more and more choices again than they did in the past. So it might take a little more counseling, and tracking that can be a little bit more difficult. Before, you always knew how many days, maybe you had folks use for temp housing. Well, if that benefit component is in the flex, you may not know that anymore, depending what type of method you use to control your flex costs.

And just mismanaging funds. Again, if you get a lump sum for your flex benefits, if those employees aren't good at managing their money or budgeting their money, they might be a little bit frustrated with this type of program. But I've never seen a client go from actually a Core/Flex or Fixed/Flex back to the traditional. And you still have the tiers for U.S domestic anyhow. You will still have tiers by policy level and maybe your flex cap is going to differ by tier.

Typical Flexible Benefits

US Domestic

Go on to the next slide. We also... I guess I wanna explain what is important in a U.S. domestic. Basically, it's gonna be your tax excludable expenses, so your household goods, shipping autos, stores to 30 days, and most of your final trip expenses. And it's gonna be your home sale program because you don't want that being capped in any way with the flex benefits.

So usually you might again have that high chair with a guaranteed buyout, the next chair has maybe a buyer value offer, the next one maybe just gets home marketing, but the home sale goes in the core or fixed benefits. Everything else really, it's flexed. So we're talking about your home funding trip, your temp posting, maybe new home purchases in there, general home inspection. Now you can offer some more benefits that you didn't in the past.

So it might include your spouse or partner reemployment, tax prep fees, a lot of people have trouble with that, and your renter expenses, you know, whether it's a lease cancellation, lease acquisition, finder's fees, what have you. So all that goes into the flex portion on a U.S. domestic policy. International is gonna differ a little bit, pros and cons are the same, but what goes in a Core/Flex differs. So international, I'll let you go through that, Taryn. Taryn?

International

Taryn: So on the global side or international side, the flex benefits, in some cases, will just differ more by level, not necessarily nature of support. So if you look at one program to the next you may see some differentiation there, and that's where we build in some of the flexibility. But if you are, for example, looking to differentiate between kind of a high level very strategic package versus someone who's more early in their career, the strategic package may include some elements around home finding, potentially a pre-decision trip.

So before the employee even accepts the move, they may be entitled to some support to go for a visit just to kind of scope out the host of the new location. Housing contributions may be adjusted depending on the level of the employee. These are also...this list is in the area where it also can be provided as an optional or management discretion, in terms of whether or not this is even included in the employee's package. Two of the interesting ones are language training and cultural training, and we'll talk a little bit more about this again later in the session.

But those are two elements where historically, you know, when a lot of organizations were focused on cutting costs, those are two areas that came out. They were viewed as not necessarily critical to the success of the move. There is a bit of a shift lately, and a lot of it is more discussion at this point versus actually seeing changes implemented in policies, but I would imagine that, you know, as we continue to have these types of discussions we will start to see it more and more in policy.

But companies are really recognizing the value of these relatively low cost support items that really can have a significant impact on the success of the move, and not necessarily for just the employee, but really for the accompanying family as a whole.

I have a lot of discussions around people who say, "Oh, if you're moving from the U.S. to, you know, the U.K., for example, you don't necessarily need...or we don't need to give cultural training." And the reality is that there's some significant differences. Sure, the language is similar and we all sound similar, but there's a big difference culturally in moving from the U.S. to the U.K. just in terms of what kind of social norms are, and also from a business perspective as well. So some of the items that were very traditionally pulled out of policy are now being added back in.

The last bullet here, the exceptional areas of compensation, such as spouse's working visa, home country housing disposal, things like that, those do become elements that become package sweeteners, I guess, or provided at that very high or senior level employee. We do see those elements being included in the employee's package, really to recognize the value that the employee is bringing to the organization and to serve as a differentor between what their package looks like versus someone that's more junior early on in their career.

Then we talk a little bit about the control and flexible spend, so some different options here when you talk about how to manage that flex spend. As we mentioned earlier, some of this will be at the discretion of the manager or the organization. In other instances, it is at the discretion of the employee. So on the left side, you know, we have the lump sum allowance, and that's going to be just a flat dollar amount. Different organizations will determine that dollar amount or that lump sum cash amount differently.

Some will apply a percentage of base salary, some just use a flat amount across the board. It may differ depending on different move types or different employee levels within the organization. Some organizations has a bit of a formula that they use to calculate lump sum. So they'll articulate that that lump sum is intended to cover items like temporary housing, you know, or pet shipment or things like that.

And they will do a bit of a calculation to determine based on the employee's home host combination or origin-destination location, as well as family size. They will do a calculation to arrive at that lump sum. So depending on where you're moving from and to, as well as your family size, that number may differ from one employee to the next.

There's also a menu-driven approach, or some refer to it as a cafeteria approach, where the core elements or the fixed elements are defined. Often they have to do, particularly on the international side, with compliance or benefits that the organization can receive a tax benefit if they deliver it in a certain way, whether it's delivered directly versus, you know, cash to the employer or reimbursement. So those will be the kind of core or fixed elements.

And then there's a menu of items that the employee can choose from to figure out what the capped elements are. Again, in some cases, it's company driven flex or menu items based on what the organization or the HR manager or the sending manager knows about that employee and their situation, and what their needs are. In other cases, it is the employee that can select those items. And then in some cases, we see dollar caps implemented. Pros and cons across the board in terms of what the right approach is. And it's very much driven by what the organizational culture is, you know, as well as what you're looking to achieve through your flexible components of your program.

Jill: Yeah, I was gonna say I know domestically I do see the menu approach for larger companies more often, and smaller companies will be maybe the lump sum or the dollar cap. And the fourth method I just thought I'd mention is point, and they were talked about years ago, but I rarely see this being used today. Those that have them still do, but I haven't written any policies adding endpoints. And when I say points, it used to mean or it does mean like temp housing is worth 6 points and every point is worth $500 and the employer is given 11 points to use how he wants.

So I don't see that method, but again I do see the menu method is very popular, and it'll say you can have five out of eight benefits, choose whichever one, and there's not an overall dollar cap. But there still might be a cap within that benefit. Like if it's lease cancellation, you still will see that capped at two months' rent. But overall they can choose which benefits work best for them.

POLL: Does your company offer a lump sum only policy?

We'll go on to our first polling question, move the slides up a little bit. The first polling question is, does your company offer a lump sum only policy? So we're talking about the like college new hires usually, maybe interns, something like that. Does your company offer a lump sum only policy, all they get is money? We'll go yes A, or B, no, and then we'll tally this up.

Taryn: And just to be clear this is different from a miscellaneous relo allowance. So that's often an element of domestic and global policies, so this would be different from that. This is really a lump sum that's intended to cover a lot of what would more traditionally be a separate line item within the policy.

Jill: Right. And we're asking this question because that's the next section we'll talk about. So I'm not talking about a lump sum with the Core/Flex program, but just a lump sum only. We'll see what kind of numbers we come up with. Nothing yet? I know you get a little bit of time to answer the question. These lump sums have been around for years, it's kind of interesting to see them come back.

Taryn: Wow, interesting, okay. So the results are in, so no one, but just barely, we had no at 51% and yes at 44%, so pretty evenly split for all the participants on the line. So I don't know how you feel about that, I'm a bit surprised, I guess, I would have expected maybe at this point in time to see more nos, maybe a little bit down the line more geared towards yes. And we do see more nos, but I guess the balance, I think, I would have expected to see more heavily weighted towards the nos versus the yeses.

Jill: Yeah, well, it's definitely a culture thing at the company, and I realize our audience is made up of corporate clients, but as well as service providers. So I know this slide doesn't apply to some of you, but mainly for the corporate providers, corporate clients, I'm very curious.

What is a Lump Sum Allowance?

Okay. So if we said lump sum allowances, we hear a lot of talk about it. They've been around, they're back around again. And they are used in different ways. So when you read some data from certain reports, I think that important fact you made, Taryn, about this is not a miscellaneous allowance, because a lot of folks, I think, consider the miscellaneous a lump sum, which it is usually, but it's meant for miscellaneous type expenses, where a lump sum is meant for really policy components.

So usually you're gonna give a lump sum for all the benefits, but we just saw that with 50/50. Some may give a lump sum allowance along with a couple other benefits. For U.S domestic it's gonna be again those tax excludable benefits, like household goods, final trip, those type of things along with the lump sum.

And the third way that people will use the lump sum allowance is it's meant to cover a certain component within the policy. So often the home finding trip and temp housing are combined, and they give them, you know, X amount of dollars for that. Some just use it for temp housing, some just the other, I think combining the two benefits together is most popular and, of course, they are both taxable in the U.S.

There are some companies though that give the employee the choice, "Would you rather be reimbursed for, say, these two components, or would you rather get a lump sum?" And kind of learned through the years that those savvy transferees that they're moving to high-cost areas often wanna be reimbursed, but lump sum still, they kind of like again having that flexibility for those benefits.

POLL: How do you calculate the lump sum?

Let's go into polling question number two. Because there are different ways to calculate a lump sum, do you use a fixed amount? So flat dollar amount, "Here's $5,000"? Do you use a percentage of the employee's salary? Maybe it's, you know, per month or per year. Is it a formula? Is it kind of got like a grid or a table based on family size, or at the origin or destination locations, sometimes it's homeowner renters? So you use certain type of formula to determine the amount, or none of the above, or you're not sure?

So if you could answer A, B, C, D, or E, and then we will look at the tallying amount. I think in the past a lot of folks would give a fixed amount, so this will be interesting to see the results. It's very easy to say everybody gets $5,000 or whatever the amount will be, and this way you're just basically being fair to everybody, you give everybody the same amount. But a lot of companies that are controlling costs actually a lot of times will use that formula, and they'll say, "I don't wanna give the same amount of a lump sum to somebody moving 70 miles that's somebody moving 2500 miles is getting."

So in one way the company can say toss [SP], and in the other, they're giving an amount to be employee that relates to the distance up their move. So it's interesting to see that change. We've got some results coming in, Taryn. You wanna go through those?

Taryn: Yes, so I'm actually surprised again here. So looks like the majority at 32% are using option C, so a formula based on family size and or origin/destination locations, so very kind of logical or rational approach to determining what that amount is. As I said earlier it's equitable in terms of you're looking at the family size as well as potentially the home host combination and really adjusting to reflect differences in where the person is moving from or to, as well as, you know, excuse me, some of the additional considerations that do go along with a larger or smaller family size.

So it makes sense. I think a lot of organizations that look to implement a lump sum struggle a little bit with what the right approach is here, because they do wanna be equitable, but from the surface providing different amounts to different people may not appear to be equitable, even though they're using some logic and some rationale to come up with that number. The lowest option or the least used option I should say here is percentage of base salary, fixed amount was kind of second only to the more formulaic approach.

So interesting results there, and I'm curious to see how this shifts as more and more organizations, you know, potentially look at building a lump sum into their program, whether it's for all move types or just for certain employee levels.

Alternate Relocation Policy Types

Okay, so we'll move on, alternate relocation policy types. We have heard a bit about, particularly in the global space just around having deviations from your very traditional long-term, short-term, perm transfer moves. Some of you may be familiar with, you know, the term Expat Lite or Local Plus. I know that there's a lot of rebranding that goes on prior to those policy types being released so that they're not necessarily referred to as an Expat Lite or a Local Plus, but essentially that's the approach that's applied.

International 

What we're seeing in the global space is kind of a further shift, I guess, away from the very traditional move types. There still are employees that are moved as long-term, short-term, and perm transfer employees, that will not change. But what we are seeing is more and more use of kind of shorter term assignments that really reflect not only potentially some cost considerations for the organization, but also some employee preferences.

Employees aren't as willing or able to pick up and move on a long-term assignment as they have been previously. I think we're looking at more and more dual career families, where it's a significant hardship for that entire family to pick up and move to a new location for an extended period of time. There's a break in the career for the spouse or partner, and it becomes difficult. So employers are really pushing their organizations to look at what alternate approaches are.

So we're seeing more and more short terms, we expect this number to continue to rise. We talked a little bit earlier about these extended business travelers. So not necessarily...these are folks that haven't necessarily fallen under the radar or fallen within the radar of mobility programs historically. Obviously, there are people that travel extensively for business, but more focused on this type of population, predominately because of the compliance risks that go along with them, but also potentially using this type of movement as a way to still meet any resource or talent needs that the organization may have.

This becomes a lower cost option if managed appropriately, and one that also then reflects some of the, you know, employee preferences in terms of willingness or lack of willingness to pack up and move. Obviously, also commuters and rotators, again not necessarily new types of moves within the global space, but more focus on how you can better leverage commuters and rotators to meet those resource and talent needs as an alternative to the longer, more expensive move types.

So, you know, commuters are gonna be defined as an individual that commutes on a regular basis from their home location to their work location. It's not just commuting for your 45-minute, hour commute, it's a bit longer than that. There are some set sort of procedures or guidelines there around what the employee is eligible to receive reimbursement for.

And then the rotators, very kind of common in the oil and gas space, but I think we're seeing the same approach applied for different organizations now, again to meet some of their talent and development and resource needs, being able to rotate people through a position to give the employee a lot of experience potentially, but also to make sure that that resource need is taken care of. A couple differences, I guess, on the on the U.S. side.

US Domestic

Jill: Yeah, on the U.S., temporary domestic assignments, often called TDAs, they've been around for a while. We could do a whole webinar on both short and long-term. But basically, I want everyone to remember the intent is that the employee returns to the base origin location. So they may wanna send them on an assignment instead of relocating that person. And the reason we break it down between short-term...now companies can call it whatever they like but the taxability is gonna differ.

So a short-term is considered any assignment lasting less than one year and long-term is usually you know it's going to be one to three years. But even on that short-term the minute you know that intent changes, then everything becomes taxable. So if you send somebody out for 11 months, on month nine you realize, "Oh, we're gonna have to extend this to a year and a half," at that point everything becomes taxable.

So that's why I think having an assignment letter is really, really important, and then update that when the intent changes. So again you can have any type of assignment, just one temporary domestic assignment, but it's the taxability that's really gonna differ. Rotations again have been around, that's where you're moving to three or more places and you may or may not go back to the origin location. [inaudible 00:42:12] pretty much considers these relocations for the relocation tax rules are gonna apply.

The one I'm hearing the most about though is commuter, and as Taryn mentioned, it's where the employee lives in one city and the job is in another city. And usually in the U.S. you're going to travel to that new city and stay there all week and come home on the weekends, and see your family. So this is a great way, you know, to let the employee stay in his origin location, because maybe they're not moving because they've got a child in high school. Maybe the real estate market conditions are bad or maybe that employee wants to test that new position, maybe there is health for elder care issues and, of course, we know that maybe the spouse doesn't wanna move.

But I guess the thing to remember is everything's taxable and it's usually the company culture that determines. Some believe its employees lifestyle choice to do that, so no help is gonna be provided. Others that are hiring look at candidate A and B, and A wants commuter benefits so they might go with B who doesn't need that. And then they're gonna cover these expenses if they do believe in doing so. And some may just give them an allowance, some may give them a per diem, some may reimburse, you know, airfare, or mileage and temp housing.

So it does vary on how companies want to support, but basically, you wanna look at what would you have spent on that relocation, and then divide that down to figure out a commuting allowance and then how many years that can go. And I think again there should be some type of letter, something written so you know when these benefits start and when they end. And if you give a lump sum, do it monthly, you know, don't give one large lump sum and say, "There, I'm done for the year." Because what if that employee leaves? So number one you're gonna have to pay back agreement to deal with, plus it's also a great retention tool.

So commuters are becoming more common, I think it has a lot to do obviously with technology and applying for jobs anywhere around the United States, whether you live or move to that city.

POLL: Do you have a written commuter policy for international moves?

I think we're gonna go on to another polling question. This one, do you have a written commuter policy for international moves? Just international now. I'll give you a clue, the next question's gonna be on domestic. So just international, do you have a commuter policy? And I can tell you domestically, I don't see them real often.

Taryn: Yes, same thing with global, I'm not expecting that a lot of people will. But as we start to see this type of move increase potentially in frequency or at least in focus for, you know, kind of just awareness around the fact that you do have these types of arrangements, I would expect that we will down the road see more and more organizations formalizing any commuter policies that they have. When it comes to some of the compliance requirements that exist out there, one of the things that authorities will look at is whether or not you have a written policy and a defined process in place.

I know we're talking about commuters here, but when it comes to like the extended business travelers, and I think why there's a lot of focus there, no one's really gotten a lot of trouble yet, but I think it's just a matter of time. And I think any organization that's going to be able to point to a defined policy, a written policy as well as a process will fare a little bit better potentially than an organization that can't.

So yeah, not surprisingly, we're seeing 79% responding that there's no written policy for commuter international moves.

POLL: Do you have a written commuter policy for domestic moves?

Let's flip right over to polling question four. As Jill said were asking the same questions but for domestic. So, Jill, it sounds like you're expecting to see similar results here for the domestic piece.

Jill: I truly am. Do I think it's gonna change? I do too, I think we're gonna see more commuter policies, I think it might become more common. But provided in an equitable manner, but yes, I think there should be a policy written, but a lot of companies don't do it right now, so let's see what the results show.

Taryn: And Jill, on the domestic side, are you saying as well that it's best practice to have something documented or potentially have something documented, to avoid any kind of issues down the road in terms of the support that's provided?

Jill: Absolutely, I think it should be written, even on a regular policy if you give something on the side, you know, whether you call it an addendum to policy or what have you, it should be written, so you're providing that to everybody in the same way. And that's what I think commuter policies should be written. And it's just...I know the tough part is figuring out how much do you give an employee for those commuter benefits? Look at that. You see the results, Taryn, do you wanna...?

Taryn: Yes, so yes almost exactly the same there where we had at no at 79% for the international, we have a no at 81%. So very much kind of in line with what we expected. So it be interesting if we do this poll or this type of question a year or two from now, it'll be interesting to see how that shifts, given the current landscape, compliance landscape today.

Additional Services or Benefits

So moving on, our last section here is just around some additional services or benefits that are being provided, some of these are not necessarily new, I guess, but potentially more of a focus for programs. I talked a little bit about some that are being added back in to policies where they've historically been removed. So, you know, looking at... We'll focus first on VIPs and then we'll talk a little bit about family assistance and tax services, and then some home purchase considerations.

Executive VIPs

So not a whole lot of difference in terms of VIPs in the support that's provided if you're talking about global moves versus domestic moves. They usually have a dedicated relocation consultant or primary point of contact that is likely more senior within their organization. It's kind of their single point of contact for all communications. The employee will only talk to that individual and that individual would then speak directly with the vendors.

So in some cases where we have kind of a streamlined point of contact approach, where the employee still has a few different touch points with some of the different vendors or service providers. For EVIPs, we're usually focused on one single touch point for them, and that individual is then responsible for coordinating everything. Extended or off-hour availability for those of us on the service provider side, it basically means you're on call 24 hours a day, right, you wanna make sure that you're responding very timely to that individual for any concern or question that they may have.

You're managing exceptions up to approved cap. I think some organizations do have, you know, a set threshold whereby their vendors or their providers can go ahead and authorize certain exceptions without having to go through the organization, often that cap is higher for some of these EVIPs. We have VIP status reports, and personal face-to-face meetings with that employee.

And then kind of the one difference I guess, but it's sort of tied together, the support that's provided on the global side is gonna differ depending on the level of policy that's tied to that employee level. And then on the domestic side, there's usually a differentiation between homeowners or renters.

Jill: Yeah, very, very similar programs, just the cost, so it's gonna differ.

Family Assistance

Taryn: So when we look at then family assistance, again this is one of those items that's potentially being added back in to recognize that the employee is not the sole factor that determines whether or not the assignment or the relocation was a success. We're seeing more and more as I mentioned earlier, dual income families, so being able to provide some sort of assistance to the spouse or partner is really helpful, and it's seen as a value add for that family.

We do often see that that support is capped just to make sure that your controlling costs is either an annual cap or a lifetime move cap. And the employer or the spouse or partner typically is submitting expense reimbursement requests. We're seeing more and more companies saying. "Yes, where it's feasible, we will support with the visa or work permit for the spouse or partner." And then providing some level of tax support for... If there's a requirement for that spouse or partner to file anything.

The one big consideration when you start talking particularly about global programs is really defining very clearly how the spousal income, if they are able to work, is handled from a tax equalization perspective. If you do not define that very well, the organization may be liable to tax equalizer or may be responsible for tax equalizing the spousal income as well, as the employee's compensation. So it's really important to put a lot of information and clarity around that when communicating with the employee.

Tax Services

Okay, the last slide. I'm sorry second to last slide here is just around tax services. On the global side, it's fairly common to provide some sort of tax consultation pre-move in both the home and host location. A lot of organizations are tying the completion of this tax consultation to delivery or issuance of the miscellaneous free low allowance or similar. This pre-move consultation is very important, it's critical that the employee and potentially the spouse and partner recognize what their roles and responsibilities are related to compliance for the move.

So making sure that they are, in fact, attending that and having kinda proof of attendance or confirmation that they did attend it prior to releasing some real or support or payments is a good idea, and it's one that's been really successful. And then tax prep assistance post move.

So a lot of tax prep assistance for global move is provided for years of transfer and then any on assignment years. For perm transfers it's typically just the year of transfer. Offering an additional year or a couple of additional years of support there can really not only help the employee in terms of their requirements but also potentially help with some of the compliance things for the company as well.

Jill: Yeah. In the United States we rarely see this provided in the policy, so there's really no help on figuring out your taxes at the end of the year or how it's gonna affect your taxes before you even accept the move. And it's kind of interesting because the U.S. really has one of the most complex tax requirements. And of course, other things are gonna be affected by this tax that is paid on the employee's behalf or not paid on their behalf for some folks. But it could affect your stock options and your phase-out and foreign tax credits and things like that.

So I'd love to see more, you know, U.S. clients doing it providing a benefit, but really right now it's not seen a whole lot. But could be added obviously, in the future and it's certainly a great thing if you're doing a Core/Flex program to offer that and there.

New Home Purchase Closing Costs in the US

The next slide, I just wanna quick mention we're almost out of time, but it's the new home purchase closing costs clause [SP]. And the reason I think it's important to mention it is because after reviewing lots of policies, I still see this out there. So I just wanna make sure that people are aware, the whole thread, which is integrated, which is the TILA-RESPA integrated disclosure rules. So it's really kind of putting an acronym within an acronym. Because TILA, T-I-L-A, is the Truth in Lending Act, and RESPA is a Real Estate Settlement Procedures Act.

But the whole idea is to help that employee understand these lovely documents that they get when they buy a home, but how it affects policy is really. Do you state loan origination piece in there? I can tell you most companies do not and no longer buys down the loan. The only thing that does that is a point, it's not a discount point anymore it's just called a point. So if you do want to buy down the loan you would offer a point instead of stating that loan origination fee, so that verbiage needs to change.

And as well as sometimes you see it in the new home purchase section or your home sale or [inaudible 00:56:20] on sale you'll talk often about a HUD-1, and the HUD-1 name has changed too. So the HUD-1 and the final truth in lending is now called a closing disclosure. So a lot of times in policies you might wanna go HUD-1 splash closing disclosure, so you are up to date there, and those folks that insert a HUD-1 in for new home purchase, obviously, have to go. So that's the important thing to be sure you're up-to-date on, is that act which really was effective October of 2015, but still see it around so wanted to mention it.

We have one quick last polling question. Taryn, do you want to have it or should we do a little Q&A?

Q&A

How do flat amounts for lump sums work in the international environment, where costs differ from one location to another?

Taryn: Yeah, I think let's skip it, let's just go straight to some Q&A. I know we've had we've had a lot come through and Allison stop us if we need to jump here. So there is one question going back to the flat amounts for lump sums and how that works in the international environment, where obviously costs differ greatly from one location to another. So 5000 USD in U.K. versus Vietnam is a very different benefit amount, and that's really one of the cons, I guess, to that flat or fixed amount approach for the lump sums. We would recommend that it is a little bit more logical or driven by some sort of formula that looks at that home host combination.

Some of it may also depend on what is intended to be covered by that lump sum. So if you're looking to offset cost of living differentials, COLA, it is one of the elements of that lump sum, then that would very much kind of dictate or encourage you to go more the formula approach to determining what that lump sum is versus a fixed amount, because it's definitely a challenge there.

Alison: I think we probably have time for one more.

What is the difference between extended business travelers and short-term moves?

Taryn: Yeah, so the difference between extended business travelers and short-term? So short terms are most commonly defined as in the global space as anywhere from 3 to 12 months moves, and as Jill said for domestic it's under 12 months so very much in sync there. We have that three months kind of lower limit because usually anyone that's traveling for under three months would be considered more of an extended business traveler.

So they usually don't have any switches in terms of payroll. Usually they're not providing any additional support or any support above and beyond what's covered by your business travel policies, so usually hotels or lodging and meals and potentially some incidentals there.&

That's really the biggest difference when we start getting into the short-term moves. It's usually someone that's crossed that three months threshold. There are some companies that will define that on the lower end at six months. So it's a bit of terminology and it drives potentially what additional support the employee is receiving as well, so that's definitely a consideration in terms of how you're classifying people.

Allison: Great, well, thank you, Taryn and Jill, for sharing your insights with us today, and a very special thank you to SIRVA for sponsoring today's webinar. If you have any questions please don't hesitate to contact us, you've been a wonderful audience, and I do hope that you've enjoyed today's program.