Category: Domestic Relocation

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Best Places for Business in the U.S.

A close  look at “The Best Places for Business in the U.S.”

Why should you be interested in the best places for business in the United States? On January 3, 2017, Mark Fields, CEO of Ford Motor Company, talked about how Ford was scrapping plans to build a $1.6 billion manufacturing plant in Mexico and instead was going to be investing $700 million into a facility in Detroit. The move would not only save existing jobs in Michigan, but add 700 new ones. Fields stated, “This is a vote of confidence for President-Elect Trump and some of the policies he may be pursuing.” This could also be interpreted as, “We better keep our operations in the U.S. or we will be heavily fined by the new administration.”

Deciding which state may make the most sense, many companies logically look for less expensive, more business-friendly locations to relocate all or parts of their operations. However, if crossing the border is no longer an option due to penalties and political backlash, to which states should companies look when setting up satellite facilities? What are the best places for business in the United States?

In the article “America’s Top States for Business in 2016,” Scott Cohn, Special Correspondent for CNBC, identified ten metrics and weighted them to determine state rankings. These are:

·         Workforce (400 points)

·         Cost of Doing Business (350 points)

·         Infrastructure (350 points)

·         Economy (340 points)

·         Quality of Life (325 points)

·         Technology & Innovation (250 points)

·         Education (200 points)

·         Business Friendliness (160 points)

·         Cost of Living (75 points)

·         Access to Capital (50 points)

By using these metrics, Mr. Cohn was able to compile an ordered list of the top states in which to do business. The top 10 overall rankings for 2016 are:

1.       Utah

2.       Texas

3.       Colorado

4.       Minnesota

5.       North Carolina

6.       Washington

7.       Michigan

8.       Georgia

9.       Iowa

10.   Florida

To view the full list of all 50 states, as well as the scores for each individual metric, visit the CNBC article page.

Should your company be planning a move to a more business-friendly state, be sure to utilize an experienced relocation management company to make the most informed decision and to facilitate your mobile workforce. Global Mobility Solutions (GMS) has been a leader in relocation management since 1987, continuously delivering innovative programs and relocation technology along with award-winning customer service.

Before you move – or even develop your relocation policies – contact GMS for your complimentary benchmark study.

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Pre-Decision and Best Practices for Global Mobility

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Pre-decision Best Practices: Why do many companies have a 50% rate for assignment rejection? It is primarily because the potential transferees do not have a clear understanding of the destination location and the support available for their families.

The top 3 reasons cited for rejecting relocation assignments are housing/mortgage concerns, trailing spouse/partner employment concerns, and overall family concerns. Pre-Decision Best Practices

Assignment rejection and failure can be very costly to a company. Firms spend an average of half a year’s salary in recruiting and training when onboarding a new employee. For high-level executives, the expense can be six to nine months of their salaries. However, according to the ERC, it can be as high as three-times an annual salary for international executives. If assignments are rejected, or fail after a move – which adds much more to the financial loss – companies must go through the expense of onboarding and training new staff.

 

How can companies ensure that they get the right people in the right place at the right time and for the right price?

The answer is to use pre-decision programs. Global Mobility Solutions (GMS) is the pre-decision pioneer and we continue to develop new, innovative features for pre-decision programs.

Although the number is growing, currently only 22 percent of companies around the world are utilizing pre-decision programs. However, when working with an RMC, nearly 60 percent choose to incorporate pre-decision into their mobility management solutions.

Employees decline relocation assignments due to housing, family, and spousal/partner employment concerns. Many firms had a 50% rate for assignment rejection. 32% housing/mortgage, 55% spouse/partner employment, 69% family issues. By using pre-decision, companies increase assignment acceptance, reduce failed relocations, save money, and project a progressive and employee-friendly image.

Going back to the reasons cited for assignment rejection, let’s see how the in-depth questioning and available services of pre-decision can address each of those concerns.

 

Housing

Candidates are interviewed to learn about community and lifestyle preferences. Candidates are presented with destination spotlights that highlight the cost of living and attractions of the assignment location. Area tours are arranged. Candidates are pre-approved by participating mortgage lenders. Candidates are provided with home selling and home buying assistance.

Spouse/Partner Employment

The pre-decision interview includes an employee’s spouse or partner. Pre-decision best practices programs offer a career assessment to develop an action plan that will help the spouse or partner adjust to the new location. This can include resume services, aggressive job searching, and more.

Family

Through the pre-decision interview process, the specific needs of the family are determined. To help candidates better understand the new location before moving, they are presented with school reports and detailed community information. Community tours are arranged so that transferees and their families can see schools, hospitals, and centers of culture and entertainment prior to moving.

 

The talent acquisition program manager of a large healthcare company said, “By using pre-decision to initiate relocations prior to the face-to-face interview, we know that transferees have arrived more quickly, have settled better, and stayed longer.”

Benefits of utilizing pre-decision programs include reduced time to acceptance, reduced overall costs to the company, an increased acceptance rate, and an increase in successful assignments.

Because of how it engages relocation candidates and their families, increases assignment acceptance and success, and saves companies time and money, pre-decision best practices should be utilized when it comes to mobility management.

Learn more about how pre-decision programs can benefit both you and your transferees.

 

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Why Benchmark?

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Relocations can generate a lot of excitement as companies eye the potential for increased revenue, organizational growth, and the development of their employees. It is important for those managing workforce mobility to know if their company’s relocation policies make sense in today’s evolving, global business environment. It is critical for all the stakeholders in employee relocation – talent acquisition, human resources, procurement, finance, legal, etc. – to fully understand the best practices to ensure that their policies are competitive, compliant, and effective.

Here are the top 5 reasons you should be reviewing your relocation program and policies:

  • To ensure competitiveness within your industry in order to attract and retain the best talent
  • To identify enhancement and cost-saving opportunities (i.e. process, service cost, exception reduction, etc.)
  • To maintain alignment with your overall mobility objectives across key disciplines
  • To educate internal stakeholders on current best practices and trends
  • To learn about innovative ideas for managing a changing workforce mobility environment

Policy Benchmarking Options

A best practice across all industries is to conduct program and policy reviews every 12 to 18 months, depending on an individual company’s relocation volume, size, and scale of programming. You can receive expert guidance and award-winning service by submitting a request for contact.

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5 Steps to a Successful Year-End Process

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While most people are happily preparing for the holidays, you’re scrambling through the year-end reconciliation of all of your relocation expenses. Well, even though it’s only November, here is a gift that will help you not only navigate this year, but help you to have a successful year-end process for years to come.

Though many relocation managers might prefer battling crazed Black Friday crowds to year-end reporting, the process tends to go more smoothly when run by the relocation department. To maximize efficiency, be sure to utilize these five steps:

  1. Create a year-end checklist. A detailed checklist will help identify all of the information you need to accurately report year-end compensation. Your checklist should include due dates, responsible individuals and departments. Establishing the responsibility for reporting all of the relevant compensation data is an important component, and can include wages, imputed income, benefits, equity, taxes, and more. This year-end checklist will help you identify all the resources you will need to create a complete and accurate report. Your itemized checklist needs to include items such as early cutoff dates and all employees who will receive the tax filing services (employees on the tax eligibility list), as well as provide for the time needed for verification, approval and processing. A well-developed checklist will also set firm deadlines for the reporting and tax filings.
  1. Set up a year-end preparation call. When setting due dates, be cognizant of the vacation times made mandatory by some countries around the end of December. During the call, review your year-end checklist with all involved parties to ensure that they are aware of their role and due dates. Use this call as an opportunity to build understanding and develop relationships that will make year-end reporting easier in the future. If you have not already held a year-end preparation call, schedule one as soon as you finish reading the rest of this article!
  1. Verify all of your data! Accuracy is vital, especially when it comes to compensation reporting. Data such as addresses and tax ID numbers/Social Security numbers should be confirmed, as well as wages, benefits, sick and vacation time. Double-checking data prevents backtracking and costly errors down the line.
  1. Finalize your data. Make sure that the final payroll reports of the year have been included, plus any end-of-the-year benefits. Be sure to back up the program data again and be sure to save it in a secure location should it need to be referenced in the future.
  1. Get ready to submit your report. Double-check the deadlines for all the countries on your list and be prepared to provide specific data for each. Tax providers may ask for data for different assignee/transferee populations. Be sure to adhere to your year-end deadlines and, whenever possible, send the data ahead of time. Some international locations may have very tight turnaround times to make that final tax payment of the year.

As with anything, practice makes perfect. The more you follow these five steps, the easier year-end reporting will become for you and you can be confident of a successful year-end process.

Learn more about how to save time and money while managing your corporate relocations.

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Reduce Relocation Expenses by Eliminating Gross-Ups

BVO Savings

The Buyer Value Option (BVO) program avoids the costly process of “grossing up” dollars used to pay for the commissions and closing costs on the sale of a transferee’s home, enabling a company to reduce relocation expenses.

Typically, the commissions and closing costs associated with the sale of a transferee’s home represent the majority of the total costs incurred during a relocation. Reimbursement to a transferee of these expenses is considered taxable compensation by federal and state authorities.

Most corporations use a form of tax assistance, known as gross-up, to help offset the tax impact felt by the transferee receiving reimbursement. The gross-up expense can add substantial costs.

Example:

A transferee in the 40% tax bracket receiving a $24,000 home sale expense reimbursement will require around $39,900 in order to approximately cover the impact of income taxes being withheld and still net the $24,000 needed to cover the actual expenses.

Typical home sale with gross-up

Home sale with BVO cost savings

Total Savings:                           $11,400

*Commissions and closing costs shown reflect a 6% commission and 2% closing costs. Actual costs, including BVO fee, may vary.

Once a transferee receives a valid offer to purchase from a 3rd party buyer, and after the relocation management company (RMC) has been able to verify that all contractual terms are customary, the transferee turns the sale of the home over to the RMC.

The RMC then purchases the home from the transferee and subsequently transfers the home to the 3rd party purchaser. All closing costs and realtor commissions are paid by the RMC and billed directly to the employer. Since the transferee never incurs any home sale expense, normal reimbursement of these expenses is not required.

Fast, Easy, and Economical

Once the origin home is turned over to the RMC, the transferee relinquishes all obligations including attending the actual closing. The RMC manages the entire sale and closing process on behalf of the transferee. The BVO program allows the transferee to move quickly, and focus on his or her new job and community. This is one more way of reducing both the stress and expenses associated with workforce mobility.

To learn more about BVOs or other relocation programs, please visit our contact page and an experienced Global Mobility Solutions relocation consultant will answer all of your questions.

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Top Things to Consider to Ensure a Smooth Group Move

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Smooth Group Move – Dwight D. Eisenhower once said that “Planning is everything.” The initial blueprints for the 1944 invasion of Normandy, in which the general moved over 132,000 ground troops across the English Channel, were first presented in July of 1943. Even though your group move will not be of D-Day proportions, it will still require advanced planning and ongoing support to accomplish your mission.

Group move success is not just measured in how many people you move from point A to point B. You need to ensure that your business goals are met. These may include the retention of talent, meeting budget guidelines, minimizing disruptions, and guaranteeing the happiness of the transferees and their families.

 

Key considerations for a smooth group move should include and are not limited to:

  • A proven methodology and customized solutions
  • Risk avoidance and compliance
  • Decision-making support to maximize acceptances
  • Robust tools and resources that ensure efficient communication
  • Total management of the relocation process

 

Although there are specific steps that can be taken in each unique phase of an employee relocation, there is some overall planning that must be considered to ensure a successful group move.

 

Inclusion and Alignment

It is important to start with developing customized resources for you and your employee population considering the move. This approach allows for stakeholders to fully understand the relocation programs available, the process and host location insights for decision making.

Your RMC needs to work with you to create and implement a strategy and project plan tailored to your business needs, organizational culture and employee demographics. Service options should include:

  • Employee surveys to assess the needs of your transferees prior to program development.
  • The design, development, and implementation of corporate relocation policies that focus on competitiveness, cost efficiencies and alignment with goals and objectives.
  • Budget development and oversight that identify and quantify mobility cost with other best practice group move programs, as well as provide savings and containment recommendations.
  • Site surveys of the new location with special attention to schools, housing, cost of living, etc.
  • Announcements and communications templates to ensure that transferees are properly informed every step of the move.

 

Pre-Decision

You want to make sure that you move the right talent to the right place at the right price. It can save a lot of time, money and heartache to ensure that this happens before you actually relocate an employee. Your RMC should support your pre-decision efforts by providing:

  • In-person, group policy overview and briefings
  • Customized web-based resources specific to the destination location
  • Live resource centers at both the origin and destination locations
  • Group area orientations that include housing tours, school visits, etc.
  • Assignment/relocation offer letter coordination
  • A summary and debrief of all pre-decision activity, findings, and recommendations

 

Pre-Move Planning

Once you determine which employees are participating in the group move, your Relocation Management Company (RMC) should help you and your transferees understand what is involved with the process of getting to the destination location. Services should include:

  • Household goods shipment surveys to take into account all of a transferee’s personal belongs to be shipped and deliver an inspection-based cost summary to be used for budgeting, accruals, and cost impact analysis.
  • Global relocation analysis reports include a comparable analysis of consumables, transportation, goods and services, housing costs, etc. in order to provide realistic expectations of the cost of living in the destination location versus the origin location.
  • Educational assessments offer comprehensive consultations with the relocating families and follow-up discussions about schools and education concerns the families may have.

 

Putting the Planning into Action

  • Policy counseling and needs analysis is conducted with every smooth group move. During this initial conversation, your RMC should conduct a comprehensive needs assessment and provide a detailed review benefits and procedures, as well as identify any special needs that will need to be addressed. They should also discuss any concerns that the employee may have about relocating so that the RMC is best prepared to help along the way.
  • Global Expense Management to manage and track your relocating workforce. By managing the expense submission and payment process, you should be able to track and report on 100% of mobility expenses for your company, including payment to vendors and local agencies.Key Benefits:
    – Easy to use platform for client and employee
    – Online submission of relocation expense reports
    – Expenses audit to policy and/or assignment letter
    – Auditing and payment of all vendor invoices
    – Timely (within 2-3 business days) payments
    – Single payment source, eliminates your administrative burdens
  • Home Disposition can provide your employees with global home sale and property management assistance services.
  • Destination Services ease transition to countries worldwide, freeing up the employee to concentrate on the business mission. Your RMC should deliver a comprehensive and worldwide array of global relocation services including area tour/orientation, home finding, school search and settling in.
  • Global Travel Services allow your RMC to coordinate global travel services with client or network partners, including: airport transportation, rental car, airline travel and hotel.
  • Meet and Greets arranged at the destination airport provide pick-up and accompanied transfer to the residence. Includes: Ground transportation for relocating employee and/or family to a hotel, temporary housing, permanent residence or other destination per instructions. This service can be provided as part of a bundled area tours, home-finding or settling-in program, or provided à la carte.
  • Area tours and orientations provide an overview of the new community and local amenities to assist in deciding about the assignment. This could include any of the following: Welcome packet and information on assignment location, tours of neighborhoods and typical housing, school tours and information (if applicable), locating grocery stores, medical facilities, places of worship, etc., security briefing.
  • Home finding assistance with finding suitable housing in accordance with personal preference and policy, facilitate the preparation and signature of an appropriate lease and manage all move-in formalities. This could include any of the following: Needs analysis, pre-screening properties (within budget), accompanied property viewings, lease negotiations, utility connections, walk-through support, and furniture rental assistance (if needed).
  • Auto leasing/purchasing service programs and long term rental solutions provide assignees with car leasing/purchasing of new/used vehicles, any make or model. In many cases, local credit scores, or even driver’s licenses, are not required.
  • Schooling searches will help assess the suitability and availability of local area public or private schooling and to assist with registration and entry requirements. This could include a briefing on different school systems, organizing appointments with administrators, assisting with enrollment, etc.
  • Global transportation services provide multiple estimates to drive competiveness without compromising quality.
  • Global temporary housing coordination assists the relocating employee in selecting and securing temporary accommodations within policy. Based on your relocation policy, accommodations may include hotel, extended stay and corporate housing at different facilities around the world.

 

Continued Support Once Your Transferees Reach the Beach

After the transferees involved with your smooth group move reach their destination, your RMC should continue providing value-added programs to ensure that they and their families thrive in their new location.

  • Settling-in assistance can provide an orientation to the new community, local amenities, utilities and government registrations. This could include bank account set up, driver’s license and vehicle registration, public transportation assistance, smart phone transfers, telephone and utility setups, registration of public utilities, assistance with sourcing local services, expatriate networking association assistance, and more.
  • Trailing spouse/partner family assistance addresses concerns about the job market for the accompanying partner, finances, children’s education, family healthcare, eldercare, and much more. At the same time, your company needs the right talent to fill critical positions and achieve business objectives. Understanding your employee’s concerns can help them make the right mobility decision. The right decision means better return on investment for your organization’s mobility program and a smoother transition for the employee and family.Programs include, but are not limited to, the following:
    – Spousal/Partner Career Assistance
    – Career Continuation Assistance
    – Job Search Strategy
    – Career Continuation Assistance
    – Entrepreneur Support
    – Locating Community Networks, Services, and Activities
  • Cultural and language training can be offered through instructor-led sessions or self-paced, web-based learning. This allows transferees and their families to understand the cultural nuances of the destination location and effectively communicate with the people there.

 

Planning is the Key to Victory

You might think that this looks like a lot of planning to pull off a successful and smooth group move. You’re right. However, a world-class RMC with award-winning breadth of programs and customer service can easily guide you through every step of your move – whether relocating one employee across state lines or moving a small army of talent across the English Channel, to ensure a smooth group move.

 

For information about how Global Mobility Solutions can make your smooth group move easy and stress-free for you and your employees, please contact us today.

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3 Ways to Save with Global Mobility Programs

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Save With Global Mobility Programs – The saying goes that it takes money to make money, and global mobility is no exception. Even though you understand that the talent you on-board or relocate will help your organization grow and prosper, getting the transferees from their origin to their destination locations can be expensive. Don’t be discouraged, there are several ways to save when creating your global mobility policies.

 

Use a tiered approach

Not all employees are equal, therefore their relocation compensation shouldn’t be the same. It would make sense to pay the recent college graduate new hire substantially less than the amount awarded to a seasoned, executive-level employee. Additionally, not everyone requires the same amount of time to complete his or her move. Services can be tiered with regard to what they offer. For example, home-finding tours can be broken into half-day, one-day, or two-day options, then offered accordingly per your mobility policy. Tiered categories can be sorted by homeowners versus renters, or by how many school-age children a transferee has. Allowances for the shipping of household goods and vehicles can also be tiered based on the transferee’s position and distance to the destination location. It is very important to clearly state the various tiers in the company’s relocation policies. Tiered policies have been proven to reduce costs versus standard lump sum programs.

Below is an example of a tiered relocation policy based on position seniority:

 

Tiered-Policy-Sample global mobility programs

 

 

Bundle your services

As a company builds a relocation policy, it has many different services from which to choose – Pre-decision alone has over 30. By bundling various services together, such as home sale, household goods shipping, community tours, mortgage assistance, etc., companies can see significant savings. Typically, bundling can save companies up to 20% of what the services would cost individually.

 

Outsourcing

Lastly, by outsourcing mobility management needs to trusted, experienced, relocation experts, HR personnel can remain focused on department-specific tasks, such as enforcing company policies, finding new talent, and administering benefits and compensation. When expert mobility coaches guide transferees and their families through the relocation process, less calls are made to or by the human resources representatives. Generally, when working with a mobility management company, transferees arrive at their destinations happier, less stressed, and ready to work. In short, it saves sanity.

 

To learn more about the benefits of incorporating a mobility management company into your global mobility programs, please read Domestic Relocation Services and Global Relocation Services. You may also contact a GMS mobility specialist to get program details customized for your company’s specific needs.

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Managed Cap Programs – A Better Alternative to Lump Sum Programs

Managed Cap Programs – Lump Sum payments might seem like the fastest and easiest method of providing employees with the funds they need to move. However, Lump Sum payments come with their own unique set of problems. Some of the challenges include:

  • Transferees often left alone in the relocation process
  • No cost controls and often budgetary overages
  • Limited process or service structure
  • Non-taxable benefits are lost
  • Frustrated transferees means elevated HR involvement and escalations

In many cases, when transferees are presented with a lump sum, they try to retain as much of the lump sum for themselves. Not being experts in the relocation industry, the transferees seek out the least expensive providers and usually get the proverbial service for which they paid. In their attempt to cut corners – combined with an unfamiliarity with all that is involved with a corporate relocation move, their frustration with the service providers equates to more calls to their HR departments.

Fortunately, a Managed Cap Program can not only alleviate many of the problems associated with a Lump Sum, but it provides more useable funds for the transferee by addressing each line item of the relocation processes and taxing only the applicable services. Let’s see the difference between a $15,000 lump sum payment and the same $15,000 from a Managed Cap Program:

 

Managed Cap Programs provides 50% more relocation funds than standard lump sum programs

 

The amount of tax withholding from the Managed Cap Program is only $1,949 versus the $6,300 deducted from the standard Lump Sum scenario. The Managed Cap Program provides the transferee with $4,351 more for relocation services.

On top of wanting the obvious tax savings and happier transferees, there are five characteristics common with companies that elect to move away from standard Lump Sum programs and into Managed Cap Programs:

  • High focus on cost containment and savings
  • Limited resources for mobility management
  • Lack of structured programs and/or policies
  • Limited quality-assurance management
  • Need to attract and develop talent

If this sounds like your company, it would benefit you and your employees to contact Global Mobility Solutions and learn how we can quickly implement a mobility program custom-tailored for your needs.

 

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Innovative Relocation Mobile Apps: Powerful Tools for Those on the Move

Innovative Relocation Mobile Apps – The odds are high that you are reading this post on your phone. While desktop computer user activity has remained relatively stagnant for the past eight years, time spent on mobile devices has more than doubled since 2008. Currently, mobile internet usage has surpassed desktop as the most used digital platform. Just look around. Observe the crowds at train stations, sporting events, restaurants, and, unfortunately, theatres, and you will witness the multitudes of people with their faces glued to the glowing screens of their mobile devices. As a society, we have come to rely on our phones for news, weather, directions, entertainment, and, yes, communication. Now phones can play an important role in corporate relocation.

Through the innovative mobile app for myrelocation.com, transferees have an array of decision-making, tracking, and expense management tools at their fingertips. Transferees have anywhere, anytime access to tools like:

MyRelocation.com mobile apps innovative relocation mobile apps
Moving Cost Estimator – A quick and easy tool that can aid a transferee in anticipating what his or her moving costs will be. This is especially helpful if a transferee has a capped or lump sum policy.

Buy vs. Rent Calculator – This simple to use, dual calculator illustrates what a transferee can expect to pay, over a given period of time when renting a home versus buying a home (spoiler alert: buying wins in almost every scenario). Users don’t even have to type anything in! They can just move the slider to view multiple scenarios.

My Initiated Services – Gives the transferee a snapshot of all of the services and contact information associated with his or her relocation. This at-a-glance feature answers the questions, “Which company is going to ship my household goods?”  “What’s my realtor’s phone number?” “Where is the place I’m staying for my corporate housing?” and more. It’s all on one page – in one place – in an easy copy/paste format.

Innovative relocation mobile apps such as the myrelocation.com mobile app put the power of managing a move in the palm of your transferees’ hands. To learn more about how myrelocation.com can not only guide your transferees, but help you better manage the logistics and expenses involved with relocation, please visit https://gmsmobility.com/relocation-technology for details and demos.

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5 Reasons to Outsource Global Mobility Management

Outsource global mobility management – As companies continue to focus on ways to reduce assignment costs, examining operational effectiveness for improved quality and costs savings has become more relevant, particularly with programs managed in-house and/or partially outsourced.

  1. Cost Management: often times, in house programs do not consider or do not have the processes for tracking and reporting mobility costs, which often results in misrepresentation of mobility costs and government fines.
  2. Cost Savings: Outsourcing mobility will generate cost savings from a variety of sources, including policy recommendations, fees vs. in-house operational costs and direct costs e.g. home sale, shipments, etc.
  3. Courtesy Enhancements: In-house programs typically do not offer “no costs” solutions such as pre-decision, expatriate auto lease programs, expatriate home purchase programs and other value add services companies gain from fully outsourcing.
  4. Core Responsibilities: Outsourcing non-core competencies, allows human resources, compensation and benefits and/or recruiting professionals to focus on their core business duties by eliminating the administrative burden of managing the relocation process.
  5. Compliance: Mobility programs offer significant tax and compliance advantages.

These are the top 5 reasons to outsource global mobility management.

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