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ANY COMPANY WILL GUARANTEE YOU A ROOM. PC HOUSING GUARANTEES THE WHOLE STAY.

At PC Housing (formerly Pasha Corporate Housing) we’ve made it our mission to make your job easier. What exactly does that mean for you? How about the convenience of risk-free booking, guaranteed stays and our team of highly motivated professionals. We work to fulfill even the most challenging housing requests with ideal locations in major metropolitan areas and remote settings. PC Housing has been a trusted housing provider for travel managers, HR managers, relocation companies, government employees and the insurance industry for more than a decade.

The No Hassle PC Housing Guarantee We are so confident in our ability to offer a superior stay every time that if the stay is unsatisfactory due to our service or the quality of our accommodations, we will resolve the situation within 48 hours or refund your company $500.

Changing business travel one stay at a time.

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Real estate valuation issues? Solved. Whether you’re a global relocation services provider, a lender, an HR professional, or a local agent, our Mercury Network system is the solution to your valuation management needs. Using cutting edge technology and innovative workflow tools, Mercury Network eliminates delays and information bottlenecks. Everyone stays in the loop, on point, and happy.

It scales seamlessly to your needs, from handfuls of valuations to hundreds of thousands. You always get 24 x 7 status, a PDF plus full XML data, and automated review rules — even for the ERC form. And it’s of course 100% compliant with GLB, HVCC, USPAP, and every other acronym. But perhaps best of all, it’s free, fast, and secure. You simply can’t lose. Try it today.

Mercury Network Vendor Management Platform We’ve delivered more appraisals than any other company, period. Here’s why. t Use your appraisers, or augment with ours — we cover every county in the U.S. t All appraisals are auto-reviewed for over 1000 items before being transmitted, reducing issues due to oversights t Get a printable PDF, plus full XML data for the entire ERC report (or any other form) t Check the AVM and assessed values, market direction, and other key info with one click t Tie it in to your own back office systems using APIs, or just use it ad hoc on the web t Benefit from the sharpest technology: Proximity selection, 24 x 7 status, appraiser mobile iPhone tools, and much more

Try it right now! www.MercuryVMP.com/Relo Or call 1-800-ALAMODE AD CODE: MAMM0210 a la mode and its products are trademarks or registered trademarks of a la mode, inc. Other brand and product names are trademarks or registered trademarks of their respective owners. All prices, terms, policies, and other items are subject to change without notice. Copyright ©2009 a la mode, inc.


Calendar

FEBRUARY 2010 Worldwide ERC® Learning Zone Webinar Quarterly Tax and Legal Update February 9 2 p.m. to 3 p.m. EST

MOBILITY • Vol. 31 No. 2 • February 2010

EXECUTIVE COMMITTEE President MICHAEL (MIKE) C. WASHBOURN, SCRP, GMS, Pfizer Inc., Peapack, NJ Vice President SUSAN SCHNEIDER, SCRP, GMS, Plus Relocation Services, Inc., Minneapolis, MN Secretary/Treasurer PAMELA (PAM) J. O’CONNOR, SCRP, Leading Real Estate Companies of the World®, Chicago, IL

MARCH 2010 Global Workforce Summit®: Focus on Asia-Pacific March 10-11 Hong Kong GMS™ Training and Certification March 6, 8-9 Hong Kong March 16-18 White Plains, NY

Chairman, Board of Directors AL BLUMENBERG, SCRP, NEI Global Relocation, Omaha, NE

BOARD OF DIRECTORS CORI L. BEAUDET, SCRP, GMS, SC Johnson—A Family Company, Racine, WI LISA CARAVELLA, CRP, Bank of America, Plano, TX JAY K. DELICH, SCRP, SRA, IFA, Arizona Appraisal Team, LLC, Scottsdale, AZ MARIO FERRARO, International SOS Pte Ltd., SINGAPORE MARK GIORGINI, GMS, China Vanke Co. Ltd., Shenzhen, CHINA WILLIAM (BILL) GRAEBEL, GMS, Graebel Relocation Services Worldwide, Aurora, CO JOHNNY H. HAINES, CRP, GMS, Deloitte, Hermitage, TN

MAY 2010 National Relocation Conference May 19-21 Orlando, FL

LARS LYKKE IVERSEN, Santa Fe Relocation Services, Hong Kong, CHINA CHRISTOPHER (CHRIS) JAMES, Bechtel Corporation, Phoenix, AZ JO LAY, SCRP, GMS, Coldwell Banker Central Region Relocation, Chicago, IL EARL LEE, Prudential Real Estate and Relocation Services, Scottsdale, AZ STEPHEN C. MCGARRY, SCRP, WPP, New York, NY

GMS Training and Certification May 17-19 Orlando, FL

SANTRUPT MISRA, PH.D., Aditya Birla Management Corporation Ltd., Mumbai, INDIA

OCTOBER 2010

JOHN PFEIFFER, GMS, Mustang Engineering, L.P., Houston, TX

Global Workforce Symposium October 27-29 Seattle, WA

C. MATTHEW (MATT) SPINOLO, SCRP, GMS, Primacy Relocation, LLC, Memphis, TN

GMS“ Training and Certification October 25-27 Seattle, WA

Chairman, U.S. Advisory Council

JOY MORRISON, CRP, GMS, PepsiCo, Inc., Purchase, NY STEVEN A. NORD, UPS, Atlanta, GA IAN PAYNE, GMS, Cartus, London, UNITED KINGDOM

PANDRA RICHIE, SCRP, GMS, Long & Foster Corporate Real Estate Services Division, Chantilly, VA

EX-OFFICIO

JOSEPH V. BENEVIDES, JR., SCRP, Consultant, Assonet, MA

MAY 2011 National Relocation Conference May 18-20 Las Vegas, NV

MOBILITY (ISSN 0195-8194) is published monthly by Worldwide ERC®, 4401 Wilson Boulevard, Suite 510, Arlington, VA 22203, +1 703 842 3400. MOBILITY examines key issues affecting the global mobility workforce for the benefit of employers and firms or individuals providing specific services to relocated employees and their families. The opinions expressed in MOBILITY are those of the authors and do not necessarily reflect the opinions of Worldwide ERC®. MOBILITY is printed in the United States of America. Periodical postage paid at Arlington, VA, and additional mailing offices. Worldwide ERC® members receive one annual subscription with their membership dues. Subscriptions are available to both members and non-members at $48 each per year. Copyright © by Worldwide ERC®. All rights reserved. Neither all nor part of the contents published herein may be reproduced in any form without written permission of Worldwide ERC®. POSTMASTER: send address changes to M OBILITY , Worldwide ERC ®, 4401 Wilson Boulevard, Suite 510, Arlington, VA 22203

2 MOBILITY/FEBRUARY 2010


Allied wins its 16th Quest for Quality award.

Orange-to-Orange Network

Quality moving and logistics services.

depend on Allied for extraordinary service, unrivaled dedication,

“Q4Q Recipients have consistently proven that they’re meeting ever increasing shipper demands in what is now a 24/7 global marketplace where actions and mistakes can be tracked down to the day, hour, minute, or even second.”

and innovative solutions for all your moving and shipping needs.

Logistics Management

Allied Van Lines wins another Quest for Quality award for Household Goods and High-Value Products. Allied received high

“...Walking away with a Quest for Quality award in 2009 is a true testament to a company’s ability to adapt and stay relevant in what may be the most difficult operating environment since the Great Depression.”

marks in 5 key criteria: On-time Performance, Value, Information

Logistics Management

Around the world, one name is recognized as the leader in professional, quality moving services: Allied Van Lines. You can

Technology, Customer Service, Equipment, and Operations.

www.allied.com | 866.841.7530 © 2010 Allied Van Lines, Inc. U.S. DOT No. 076235 ALLIED and the ALLIED ROADWAY DESIGN are registered trademarks and service marks of Allied Van Lines, Inc.


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Perceptions

From Survive to Thrive ike the tentative shoots of new plants pushing through the earth in the spring, we’re seeing some hopeful signs of

L

growth. The National Association for Business Economists (NABE) predicted real growth in U.S. gross domestic product for 2010 would be 2.9 percent, up from its October forecast for 2.6 percent growth. And they see a brighter labor

picture, too. NABE President Lynn Reaser noted that, “while the recovery has been jobless so far, that should soon change. Within the next few months, companies should be adding instead of cutting jobs.” Underscoring this thought and edging into the news are stories about companies thawing out their hiring freezes and carefully reinstituting benefits and salary increases that were shelved for months on end. There really does seem to be light at the end of this tunnel! The recent McKinsey Global Survey, which surveyed more than 1,600 global executives representing the full range of industries, regions, and tenures, notes that “over half of executives continue to say economic conditions are now better than they were in September 2008, and for the first time this year a majority—54 percent—expect customer demand for their companies’ products or services to rise in the near term, compared with 39 percent in April 2009. In addition, notably more are seeking—and getting— external funding than have done so in more than a year.” The survey also stated that, similar to what we have observed in the workforce mobility industry, companies are carefully planning not just for the short term, but for the medium and long term, though they “remain wary, assessing more options and checking progress more frequently than they did before the crisis.” It feels good to have a little more energy in our steps, to attend meetings where reduction is no longer the 4 MOBILITY/FEBRUARY 2010

expected centerpiece, and to use our creativity and business skills to examine options that we had put aside in previous months. And while we know that credit will not return soon (if at all) to pre-recession availability, and that mobility activity may not bounce back to the “old normal,” this is an environment we can work with, that makes even better use of our ability to strategize even as we continue to economize. It’s time to thrive, and we need to lead our own employees through this phase, just as we guided them through the recession. In his article, “Leading out of the Downturn,” author Steve Zaffron says that the

most important mission for today’s leaders is “to recognize that people normally have an unconscious, gut-level idea of where they—and their company—are, and where they’re likely to go. In difficult times, you want information to flow in organizations, but, actually, the flow is lessened. The first task of leadership is to identify the future, discuss it, and analyze it, and then go about reimagining—and, in effect, rewriting—the future. Leaders who open up the channels of communication and feel comfortable—and who take the risk of inviting people to think about the picture they’re looking at—will find that they have partners they never expected.” Zaffron likens the darkest days of the recession to a patient spending time in the intensive care unit. “When you come out of the ICU, are you going to build a strong and healthy future for yourself? Leaders need to be setting in motion conversations that really are about the future. What are you going to be when this turns around?” So here we are—after a year or more of “recession status,” the U.S. and the world economies are inching toward recovery. We are moving, however cautiously, from our survival positions to an outlook that includes growth as part of the equation. We are moving from survive to thrive. —Michael C. Washbourn, SCRP, GMS 2010 Worldwide ERC® President Pfizer Inc.


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MOBILITY Magazine of Worldwide ERC®

3 0

Features

24

Worldwide ERC® Celebrates 20 Years of the CRP® By Allison Peña

30

Culture and the Crash: Exploring the Connection Between People’s Responses to the Economic Crisis and Their Culture By Dean Foster and Nicole Barile, GMS

38

Localization— the Silver Bullet? By Yvonne Bosson, GMS, and Deborah Wilkes

44

38

Losing Sight of Corporate Culture— Securing Your Brand in a World of Mergers, Acquisitions, and Recession By John D’Ambrogio, CRP, GMS

50

Mergers and Acquisitions: Seven Tips for Successful Mobility Program Integration By Susan Vittorio, CRP, PHR, and Joleen Lauffer, CRP, GMS

56

50

A Holistic, Team Approach to Global Assignments Minimizes Risk and Promotes Success By Wes Okumura

60

Relo World 2010 By Charlie Flagg, SRA

66

Minimizing Direct Homeselling Costs By Steven John, CRP, GMS

72

60

72

What Veterans Advise New Professionals By Stefanie R. Schreck, CRP, GMS

MOBILITY/FEBRUARY 2010 7


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MOBILITY Magazine of Worldwide ERC®

DEPARTMENTS

2 CALENDAR 4 PERCEPTIONS From Survive to Thrive By Michael C. Washbourn, SCRP, GMS

10 AROUND THE WORLDWIDE ERC® 14 EXECUTIVE SPOTLIGHT

MOBILITY STAFF

Vice President & Publisher Jerry Holloman

Managing Editor Frank Mauck EDITORIAL ADVISORY COMMITTEE

Chairman Joy Morrison, CRP, GMS, PepsiCo, Inc., Purchase, NY Gaetane Brummett, CRP, GMS, Prudential CA Realty, Huntington Beach, CA

17 INDUSTRY SPOTLIGHT

Claude A. Choate, CRP, Choate Realty Group, Dallas, TX

17 WORLDWIDE ERC® TRENDSPOTTING

Sean Dubberke, RW3 LLC, New York, NY

20 QUICK TAKES

Pamela Dunleavy, CRP, Primacy Relocation, LLC, Memphis, TN

78 SPECIAL ADVERTISING SECTION

Marge A. Dillon, CRP, GMS, Xerox Corporation, Lewisville, TX Deborah A. Dull, CRP, GMS, Crown Relocations, Houston, TX C. William Heald, SCRP, Heald Associates LLC, Boston, MA Tacha Kasper, CRP, Leading Real Estate Companies of the World®, Chicago, IL Joleen Lauffer, CRP, GMS, AIReS, Pittsburgh, PA

84 RAC REPORT

Mark A. Lozano, CRP, Wells Fargo Home Mortgage, Minneapolis, MN

86 GLOBILITY

Paul O’Leary, CRP, GMS, The Move Management Center, San Mateo, CA

88 LAST PAGE

Bari L. Rubenstein, CRP, Consultant, Glenview, IL

®

Patrick Moore, Hayden Moore LLC, Chagrin Falls, OH Christopher J. Otteau, Otteau Valuation Group, Inc., East Brunswick, NJ Stefanie R. Schreck, CRP, GMS, American International Group, New York, NY Judit Slezak, GMS, Prudential Relocation, Washington, DC Carolyn White, Graebel Relocation Services Worldwide, Aurora, CO GLOBAL EDITORIAL ADVISORY COMMITTEE

Chairman Joy Morrison, CRP, GMS, PepsiCo, Inc., Purchase, NY Michele Bar-Pereg, Bar-Pereg Group, Amsterdam, THE NETHERLANDS Lorraine Bello, GMS, Ricklin-Echikson Associates, Inc. (REA), Millburn, NJ Lorelei Carobolante, SCRP, GMS, GPHR, G2nd Systems, LLC, San Ramon, CA Scott Craighead, SCRP, GMS, Blue Sky Executive Search, New York, NY Anne Dean, Living Abroad, LLC, Norwalk, CT Cindy Madden, CRP, Cartus, Danbury, CT Derrick Kon, Mercer (Singapore), Pte. Ltd, SINGAPORE Anne-Claude Lambelet, GMS, The International Relocation Associates (TIRA), Geneva, SWITZERLAND

Design/Production: Ideas, Communicated, LLC, Vienna, VA, www.ideascommunicated.com Printing: CADMUS Specialty Publications, Richmond, VA Reprints: Katina Moaney, CADMUS Reprint Services, ercreprints@cadmus.com; +1 800 487 5625 Advertising Sales: Glen Cox, National Sales Manager, The Townsend Group, +1 301 215 6710; ext. 109; gcox@townsend-group.com

8 MOBILITY/FEBRUARY 2010

Tacita Lewars, GMS, Globaforce Incorporated, Calgery, Alberta, CANADA Andrea Massoud, GMS, Living in Brazil, International Relocation Services, Barueri-Sao Paulo, BRAZIL Christine Moore, SIRVA Relocation, Westmont, IL Nino Nelissen, GMS, Executive Mobility Group, Schlipol Airport, THE NETHERLANDS Constance Pegushin, Berry Appleman & Leiden LLP, San Francisco, CA Maureen Bridget Rabotin, Effective Global Leadership, Paris, FRANCE René Rosemary Stegmann, GMS, Relocation Africa, Cape Town, SOUTH AFRICA Rita Wagner, GMS, Interdean International Relocation, London, UNITED KINGDOM Nick Woodhams, GMS, Woodhams Relocation Centre, Sydney, AUSTRALIA


Prudential Real Estate and Relocation Services

Take the path to a Rock Solid Relocation ®

When you choose Prudential Real Estate and Relocation Services, you do more than secure the most comprehensive range of relocation services in the industry. You also realize the value of an organization that delivers satisfaction, savings and security at every step. It all leads to a better experience — for both you and your transferees. To learn more, call 1-877-418-0617. To download our complimentary relocation tools, visit www.prudential.com/relocation/value Benefit from the experience of our Prudential Real Estate Network.

Trust The Rock®, where promises have been kept for more than 130 years.

Increase transferee satisfaction with our caring relocation professionals.

Minimize home sale costs, thanks to our revolutionary eValuator Market Intelligence Tool. SM

© 2010 Prudential Financial, Inc., Newark, NJ, USA. All rights reserved. Prudential Real Estate brokerage services are offered through the independently owned and operated network of broker member franchisees of Prudential Real Estate Affiliates, Inc., a Prudential Financial company. and Prudential are registered service marks of The Prudential Insurance Company of America. Equal Housing Opportunity


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Around the Worldwide ERC®

Worldwide ERC® and RESPRO®

T

he Real Estate Services Providers Council, Inc. (RESPRO®) is a national, non-profit trade association that unites providers from across the homebuying and financing industry toward one common goal: a business and regulatory environment that better enables all of its stakeholders to efficiently offer affiliated services through subsidiaries, joint ventures, and strategic partnerships. Given our industry’s informational and advocacy needs, it is natural that Worldwide ERC® was one of the very first Associate members of RESPRO®, and that we have continued our membership over time. Many of our

members also are members of RESPRO®. Members of RESPRO® include real estate broker-owners; real estate franchisers; mortgage lenders/brokers; title insurers/agents; homebuilders; home warranty companies; and other settlement service providers throughout North America. Representing the affiliated businesses of its members before federal and state policymakers, RESPRO® provides information to help manage the complex and changing regulatory environment under the Real Estate Settlement Procedures Act (RESPA) and state laws, and enables its mem-

bers to develop and operate successful and legally-compliant affiliated businesses, joint ventures, and marketing agreements. While affiliated business arrangements are not of strategic importance to the mobility industry as a whole, they are important to many Worldwide ERC® members and do directly affect domestic real property sales practices. RESPRO® provides us with comprehensive information on affiliated business arrangements in the settlement service industry, comprehensive regulatory information, and representation for our members interested in these areas.

The Worldwide ERC® Unique Property Database n conjunction with several relocation management and appraisal companies, Worldwide ERC® has developed the Unique Property Database to house case studies on properties with highly unusual characteristics from actual relocation transactions. The purpose of the project is to provide the industry with examples that appraisers and others can use as a reference against their own research. Data is collected on both positive and negative characteristics. In many cases, a feature is so unusual that the appraiser will have no examples of it in their files or, possibly, in their market area. These case studies will provide information on how large (or small) an effect a particular feature can have on market price. The examples are not intended to instruct appraisers on how much to adjust for an item but, rather, to supplement their own research.

I

The case studies are restricted to relocation appraisals because the eventual sale of the property provides an opportunity to re-analyze the property and make adjustments in light of the sale. For example, an appraiser may suggest that a 15 percent adjustment be made for a unique feature only to discover on resale that the market penalized the property more or less than the appraiser expected. Traditional “mortgage lending” appraisers do not revisit their analyses and, thus, are lacking the feedback necessary for those case studies to be entered in the database. To access and search the Unique Property Database, please visit https://www.WorldwideERC.org/Resources/ USRealEstate/Pages/ssl-unique-property-database.aspx.

National Relocation Conference Exhibit and Sponsorship Opportunities

G

et ready for one of the workforce mobility industry’s largest annual events! Exhibit and sponsorship opportunities are now available for the 2010 National Relocation Conference at the Walt Disney World Dolphin in Orlando, FL, May 19 through 21, 2010. Now more than ever before, it is critical to take advantage of this opportunity to boost your company’s visibility, showcase your services, and connect with your clients and partners. You will experience exceptional networking opportunities, insightful educational sessions, and a dynamic mobility services marketplace at the conference. If you provide relocation and workforce mobility services, exhibiting at this event is MUST for your company! Exhibit space and sponsorship opportunities for the National Relocation Conference are limited and selling quickly. Booth space is available on a first-come, first-serve basis, so sign up today! For more information and to sign up, visit the National Relocation Conference online at: www.WorldwideERC.org/Events/Pages/nrc10.aspx. 10 MOBILITY/FEBRUARY 2010


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Don’t just relocate your people. Move them.

Service excellence translates into smooth transitions around the world – and smooth transitions make people happy, secure and more productive. At Primacy, we understand this. Our network of worldwide offices ensures you can access local expertise on both ends of any move. Regardless of location or logistics, we can provide continuous “on the ground” support for seamless moves – assignee by assignee, day by day, line item by line item. The result is that your people can get back to business – and life – as soon as possible. For more information, visit www.primacy.com today.

1-877-343-5897

©2009, Primacy Relocation, LLC. All rights reserved.

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Global Relocation Is Always A People Willing to Expand Their Horizons & People Eager to Exceed Expectations

Global mobility begins and ends with people helping people. It starts with the corporate relocation manager who teams with talented people who manage a people-focused relocation program and the people performing in-person relocation services worldwide.

Here are some reasons why people choose our people and find us easy to work with. #1 Your budget is our budget Graebel is NOT a cost-plus service arranger. Our services are competitively-priced with direct pass-through costs so you will never pay expensive hidden fees or middleman mark-ups.

#2 Excellence everywhere and every time For 59 years, Graebel has asked...

What do you need? How can we help?® Our people are driven by one common goal worldwide...

Commitments Made. Commitments Kept.® Graebel is truly one-of-a-kind. We are not cost-plus service arrangers. We are service providers of the highest caliber worldwide.

Graebel is your single source global relocation solution. Our menu is all encompassing from policy review to inperson destination services worldwide. Our 150-country alliance unites over 11,000 experienced relocation people who are continuously measured to ensure excellence.

#3 Our expertise knows no boundaries Up-to-the-minute information helps your people make informed decisions about where to live, find the best schools, special interest and social networks, and more. We also offer cultural and language training, currency information, helpful hints to settle-in, and of course far more!

me | Worldwide Com Worldwide Full-Ser vice Relocation Ser vices | Worldwide Move Management © 2009 - 2010 Graebe l Companies, Inc. All rights reserved.

rcial Ser vices W


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s About People

Official Sponsor of the Worldwide ERC® 2010 Conferences HONG KONG | ORLANDO | PARIS | SEATTLE

s

#7 Right for today. Ready for tomorrow! #4 Minimum open case files for maximum service Every consultant is teamed with a trained relocation associate to make sure your people’s calls never reach voicemail. And, every team’s open case files are monitored daily so highest-possible personalized service is preserved.

Our people are never satisfied with business as usual. We regularly arrange business reviews to set higher benchmarks; write white papers and share trendsetting best practices; host regional roundtables and hold an annual global relocation policy summit, and a by-invitation alliance conference for relocation leaders from around the world.

#5 Real-time business intelligence Our real-time business intelligence reports provide you with the decision-making power at your fingertips, around the clock! 24/7, your transferred people can access city or countryspecific details and more. Of course, they can submit expenses or check reimbursements online.

#6 Always grateful for – never satisfied with! Graebel is widely recognized. The HRO ‘relocation bakers’ dozen,’ the Workforce Management ‘HotList,’ and the Quest for Quality Award, and SAS 70, C-TPAT, TRACE, and ISO certifications are examples of our ongoing quality commitment.

vices

Mo v | Worldwide

ing & Storage Ser vic

To learn how our people will make a positive impact on your relocation program and your people, visit: www.graebel.com/OurPeople.html

es

cle, Aurora, Colorado 80011 U.S.A. | www.graebel.com | marcom@gra s: 16346 Airport Cir ebel.com | er t ar u q d a e H +1.800.72 World 3.6683


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Executive Spotlight

F

ragomen, Del Rey, Bernsen & Loewy, LLP, New York, NY, has named Tina Niedzwiecki partner in the firm’s New York office. Patrick Shen has been named partner in the firm’s Washington, DC, office. Magdalene Tennant has been named managing director of Fragomen Global Immigration Services, LLC, where she will lead the firm’s Greater China practice. Capital Relocation Services, Sterling, VA, has promoted Rick Bruce, CRP, GMS, to vice president, client development. Capital also has hired Denise M. Guzzetta to enhance the company’s business development efforts. Frank Assini has joined DJK Residential, New York, NY, as a sales agent. Dixon Lim has been named move manager for Arpin International Group’s Singapore office. Marriott ExecuStay, Bethesda, MD, has named Stephanie Miller regional director of operations, Kathy Brockway regional director of sales for the East Coast, and Kelly McDaniel regional director of sales for the West Coast. Ernie Kassoff has been promoted to vice president of sales for a PODS, Clearwater, FL, master franchisee. Jeff Berryhill has been hired as PODS corporate sales director. The Crown Worldwide Group, Dubai, United Arab Emirates, has appointed three new managers to its Middle East operations. Gus van Geijtenbeek was named business development manager for Crown’s fine arts division in the Middle East; Amanda Jones was named division manager for Moving Services in Dubai, United Arab Emirates; and Christopher Grimshaw joins Crown Doha, Qatar, as general manager. A. Arnold World Class Relocation, Louisville, KY, has named Terry McElroy vice president and general manager of the company’s international division, and also as president of the company’s Sterling International unit. 14 MOBILITY/FEBRUARY 2010

SIRVA Inc., Chicago, IL, has named Matthew B. Dickerson, CRP, GMS, customer experience, operational excellence, and chief innovation officer. Dickerson has more than 16 years of information technology, quality, and client integration expertise. His focus will be on client-facing technology and innovation projects that serve SIRVA’s corporate clients, transferees, and moving customers, as well as lead the company’s enterprise-wide global customer Dickerson relationship management strategy. For Worldwide ERC®, Dickerson has served on the eSolutions Think Tank, Unique Property Database Committee, Global Workforce Symposium Planning Committee, and currently serves on the U.S. Advisory Council. Dickerson also is a recipient of the Meritorious Service Award.

Capital Relocation Services, Sterling, VA, has promoted George Herriage, SCRP, GMS, to senior vice president. Herriage has held several volunteer positions for Worldwide ERC®. He has served on the planning committees for both the Global Workforce Symposium and the National Relocation Conference, as well as served on the Certification Review Board, Industry Advisory Council, and Solutions of Herriage Distinction Awards Committee. He currently serves on the Global Advisory Council. Herriage also has received both the Meritorious Service Award and Distinguished Service Award. The Southeastern Regional Relocation Council (SRRC), Orlando, FL, has announced its 2010 executive staff, executive committee, and advisory committee. Faye Chadwick, SCRP, GMS, Walt Disney Parks & Resorts U.S., was named president. GeLaine Joachim, SCRP, Promisor Relocation, was named vice president. Sherry Yerger, CRP, PHR, Walt Disney Parks & Resorts, was named secretary. Sherry Ross, CRP, Wells Fargo Home Mortgage, was named treasurer. Elected to the executive committee (the group’s charter name for its board of directors) are Pat Dolan, Graebel Orlando Movers; Nancy Carter, SCRP, GMS, Darden Restaurants, Inc.; Ann Moore, ATB Furnished Housing; Joyce Brown, CRP, GMS, Altair

Global Relocation; Sheila Castellanos, JM Family Enterprises, Inc.; and Shannon Greeley, Oakwood Worldwide. Elected to the advisory committee are Ann Burkart, CRP, GMS, CMC, RIM, Alexander’s Mobility Services; Barbara Denson, CRP, CSX Transportation, Inc.; and Mary Lou Lee, CRP, GMS, Watson Relocation Services. Prudential York Simpson Underwood Realty, Raleigh, NC, has named Merritt Atkins Brinkley as business development director. Tiffany Whitney, CRP, GMS, has joined Emigra Group, LLC, Phoenix AZ, as an account manager. Coldwell Banker Commercial United, Realtors®, Columbia, SC, has named April James commercial real estate advisor.


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Industry Spotlight

New Survey Reveals U.S. Migration Trends for 2009

D

espite a downturn economy affecting the United States in 2009, employers continued to move their human capital across state lines. According to a new survey, American’s migration patterns last year led people to move away from areas of high unemployment. According to Atlas Van Lines, Evansville, IL, “2009 Migration Patterns” study, which has tracked the nation’s moves since 1993, the total number of relocations has decreased, the Midwest is losing residents, and the hottest destinations are located in the Southwest, Northeast, and Southeast regions of the country. According to Atlas, residents of the Rust Belt states continue to move in large numbers, largely because of employment declines in the steel and manufacturing sectors. History shows that the nation’s residents generally move west, according to the release, but job losses—especially those in construction, manufacturing, and tourism—in California, Nevada, and Oregon have led to a decline in popularity of these states than in year’s past. Also worth mentioning is Colorado, a historically inbound state, became balanced in its number of moves in 2009. The survey also found that states in the Southwest—Texas, New Mexico, and Oklahoma are popular inbound locations. Oklahoma had not been a popular state for inbound moves for the past five years, according to Atlas. Also popular are states in the Northeast and Southeast, with Virginia, North Carolina, Maryland, Vermont, and New Hampshire all experiencing popularity as inbound destinations. Washington, DC, tallied the highest percentage of inbound traffic for

the fourth straight year, while Connecticut led the states with the highest percentage of outbound moves. New Jersey and South Dakota rounded out the top three outbound states. According to Atlas, the total number of household moves mirrored the cooling economy of 2009. The total number of interstate and crossborder moves by Atlas declined 16 percent from 2008, from 84,447 households moved to 71,301. According to the release, relocation activity experienced what Atlas calls a

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“higher-than-average” jump during the summer months, potentially indicating a recovery in the moving market. “Atlas’ migration study takes the pulse of our nation—it reflects the economic climate and is a guide to the general migration patterns throughout the country,” said Glen Dunkerson, chairman and CEO of Atlas World Group. “The results this year are surprising, because many states that have for years been outbound, inbound, or balanced have changed.”

Stewart Relocation Services

Title and Closing Services for the Relocation Industry MOBILITY/FEBRUARY 2010 17


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Industry Spotlight

FYI CORT’s Global Network, Fairfax, VA, announced the addition of new partner, SC Rentamuebles, Bogota, Colombia. VISION Relocation Group®, Chantilly, VA, South Africa, has announced it has been awarded a contract by the United States government’s General Service Administration (GSA) to provide employee relocation services. Interdean International Relocation, Luxembourg, has announced the completion of its rebranding, changing the name of its Luxembourg office from Interdean Daleiden Sàrl to Interdean International Relocation and moved to a larger facility. Arpin Group, Inc., West Warwick, RI, announced the launch of a website, http//www.ArpinGroup.com and an updated logo for subsidiary Arpin International Group. Prager Moving & Storage, Naperville, IL, has announced it has joined Atlas Van Lines, Evansville, IN, as an agent. ReloJapan K.K, Tokyo, Japan, has announced it has rebranded with its sister company, H&R Consultants K.K. to form the H&R Group. NuCompass Mobility Services Inc. announced a move to new office locations in Connecticut and Texas. The new addresses are: 15601 North Dallas Parkway, Suite 525, Addison, TX 75001 and 40 Danbury Road, Suite 101, Wilton, CT 06897. The company’s headquarters office in Pleasanton, CA, remains unchanged. IMPACT Group, St. Louis, MO, announced the unveiling of a new brand logo and updated corporate website. Weichert Relocation Resources Inc. (WRR), Morris Plains, NJ, has announced that its EMEA Operations Center in Crawley, United Kingdom, has achieved ISO 9001:2008 certification. The center has held ISO certification for 13 consecutive years. Marriott ExecuStay, Bethesda, MD, announced the launch of a newly-designed website, www.ExecuStay.com.

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Quick Takes

Communities

W

orldwide ERC® members are exchanging questions, answers, and ideas in our five online Forums. Under discussion right now: • How do you feel the bid process for domestic relocation has changed in the last three years? Would you say there have been any marked improvements? • Given that FHA mortgages are now accounting for a much greater percentage of loans for buying homes, are you anticipating more problems in selling inventory homes or in having your employees sell the family home through a BVO/amended value program? • Does your relocation policy take into account whether a relocation is company-driven versus associate-driven? If so, what type of benefits does it include? • Did you hear that the UK Border Agency (UKBA) implemented the requirement that all sponsored, skilled foreign workers (i.e., Tier 2 workers) and their accompanying family members must obtain Identity Cards for Foreign Workers (ICFNs)? • How does your company determine whether an employee should be placed on an expatriate assignment or given a local contract/package? Be part of the conversation. Log in and add your comments and questions today. Visit www.WorldwideERC.org/Pages/Web2.0.aspx or click on the white “Communities” text hyperlink at the top of every page of www.WorldwideERC.org. Come join your community. Note that access to the forums is an exclusive benefit of Worldwide ERC® membership. Join now or review your membership for 2010 if you have not already done so.

‘CRP®/GMS™ Designations (Preferred)’

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he headline above is quoted directly from the job requirements listed by Interstate Relocation Service, Inc., in its January 12, 2010, ad for a client services director listed on the Worldwide ERC® Career Center. And Interstate is not the only employer setting its standards high in 2010. On January 6, 2010, Weichert Relocation Resources Inc. posted an ad for a manager, broker network services, that specified “CRP® preferred” and, on January 4, 2010, Mobility Services International posted an ad for a relocation counselor that declared “CRP®/GMS™ certification a plus.” By the looks of things, the industry has spoken. The Certified Relocation Professional™ (CRP®) and Global Mobility Specialist™ (GMS™) designations, 20 and six years old, respectively, signal to your clients and current and prospective employers that you are committed to excellence in assisting employee mobility and to ongoing education and professional development. To earn the CRP® designation, candidates must study and pass a comprehensive live exam that covers six topics in the specialized field of U.S. domestic relocation: corporate relocation policies and procedures; residential real estate; relocation appraising; relocation tax and legal issues; family mobility issues; and mobility strategies. This year’s exam will be held on May 19. For more information visit www.WorldwideERC.org/Education/CRP or, to speak with someone directly, please call +1 703 842 3430 or e-mail crp@WorldwideERC.org. Candidates for the GMS™ designation must attend a three-day live training program that equips them with extensive global mobility knowledge on practical topics affecting industry professionals: Module 1—The Fundamentals: Applied Expatriate Policy Development; Module 2—Strategies and Tactics: Global Workforce Mobility; and Module 3—The Intercultural Challenge: Doing Business Globally. Upcoming training will be held on March 6, 8, and 9, 2010, in Kowloon, Hong Kong, and on March 16 to 18, 2010, in White Plains, NY. For more information visit www.WorldwideERC.org/Education/GMS or, to speak with someone directly, please call +1 703 842 3430 or e-mail gms@WorldwideERC.org. 20 MOBILITY/FEBRUARY 2010


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Getting Down to Business in South Africa Fragomen Helps Ease the Immigration Process in an Expanding Region

South Africa, a long-standing international destination for business, has made enormous strides to increase its importance and prominence in the global economy. In the past fifteen years, the government has worked tirelessly to reengineer its economic system, reducing its role in the economy in favor of investment and competition within the private sector. Today, South Africa has highly-developed legal, financial, transportation, energy, and communications industries. In fact, in 2005, services accounted for more than sixty-five percent of South Africa’s GDP, and the country is now considered the twentieth largest consumer of information technology products in the world. South Africa’s stock exchange ranks within the top twenty in the world in terms of total market capitalization.

Beyond that, the firm’s extensive involvement in the region has enabled it to appreciate the increasing need for services into additional countries in Africa, such as Nigeria, Guinea and Namibia, to name a few. To service the changing needs of its clients, Fragomen’s Johannesburg office will, over time, serve as the regional hub for its sub-Saharan African practice, a role currently performed by the firm’s London office. Given the commonalities between the language and legal systems of North Africa and the Middle East, the firm’s base for North Africa will remain in Dubai. Through the opening of its office in Johannesburg, Fragomen is not only building a country practice, but also putting into place the infrastructure needed to service a critical region and what is deemed by many to be the new frontier.

This level of investment and development generally brings with it an equal or greater need for additional infrastructure and the products and services which naturally flow from its effects, and South Africa is no exception. As multinational organizations enter the marketplace at a rapid pace to keep up with demand, there is a consequential need to bring their employees into the region, and hire additional local personnel. For many years, Fragomen has partnered with co-counsel in South Africa to service the increasing immigration needs of its corporate clients into the region.

Central to Fragomen’s efforts in the region is its new Practice Leader, Angelica Yakovchuk, who joined Fragomen soon after it opened its doors. Angelica previously worked in a major South African law firm, but was excited at the prospect of working in an international firm.

Recognizing the importance of South Africa as a destination, Fragomen opened its doors in Johannesburg in December 2009. While the firm’s name may be new to the region, the firm itself is not. Having partnered with co-counsel in South Africa for many years, the firm has become finely attuned to the needs of the local marketplace.

S P E C I A L

“South Africa is fast becoming the next most important destination for major multinational companies, bringing with it an unprecedented demand for human resources.” Ms. Yakovchuk reports. “Working with a firm with a reach as vast as Fragomen is critical to fully meeting the needs of our clients. Our global network enables us not only to service the inbound needs of multinational organizations, and local needs of South African companies, but also to assist South African companies with a presence in other jurisdictions ensure that they are able to effectively move their personnel across the globe. As clients seek to enter new marketplaces, working with other Fragomen offices and co-counsel

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around the world also enables me to assist my clients implement sound immigration programs and internal compliance programs from the onset in every jurisdiction worldwide.â€? Compliance initiatives have, in fact, increased in many jurisdictions around the world, prompted in part by the global economic crisis. These initiatives have made the development of and adherence to internal compliance procedures more important than ever. In many jurisdictions, those efforts have included increased enforcement of immigration, the Foreign Corrupt Practices Act (FCPA) and anti-corruption laws, and export control regulations. In each instance, with the rapid movement of companies into South Africa, failure to adhere to entry requirements into the region could easily have a profound impact on a company’s ability to successfully enter the marketplace. South Africa’s immigration compliance initiatives haven’t risen to the level of other jurisdictions. For example, in some instances in the United States, failure to adhere to immigration requirements has resulted in multi-million dollar ďŹ nes levied against companies and, in others, mandated dramatic changes to companies’ on-boarding procedures. It remains critical, however, that companies continuously review their internal compliance programs to ensure that they are not running afoul of local immigration laws in any jurisdiction in which they do business. “With ofďŹ ces in more than ďŹ fteen countries around the world, and a network of co-counsel in more than 120 additional jurisdictions, the ďŹ rm is able to provide a unique platform for its clients to assess the impact of new government compliance initiatives across the globe on their immigration programs, and assist in developing or restructuring those programs to ensure they meet current requirements and are agile enough to address future demands.â€? Ms. Yakovchuk says. As with many jurisdictions around the world, employers need to be cautious not to run afoul of South Africa’s business travel requirements. South Africa currently permits nationals of more than forty countries to enter the country for speciďŹ c business travel purposes for less than ninety days without obtaining a visa to do so. Many countries across the globe have visa waiver programs of this nature to facilitate international business travel. One of the hazards of these types of programs, however, is the ease with which a business traveler can engage in activities not contemplated and, in fact, not authorized by use of the programs. For instance, these business traveler programs typically permit employees to attend business meetings or conferences in the local jurisdiction. They do not generally enable employees to engage in productive employment while in the country. South Africa’s immigration laws, in particular, provide a variety of alternatives for employers who will need their employees to engage in productive employment while in the country. For example, South Africa permits intracompany transfers under certain circumstances. If these requirements are not met, a test of the local labor market may ďŹ rst be required to establish that a South African worker is not available to perform the activities contemplated by the employer. As a result, analysis of the intended business traveler’s speciďŹ c activities in South Africa must be undertaken in advance of the trip to ensure that a visa entitling the individual to work while in South Africa is not required.

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“Determining whether or not an employee’s intended activities in South Africa requires work authorization or not is often difďŹ cult for an employer to assess on its own. This sort of analysis is essential, however, to conďŹ rm that the employee will not be engaging in activities which are not permitted when seeking entry into the country without a visa,â€? Ms. Yakovchuk says. “The situation is often made more difďŹ cult because that type of short term business travel is generally not managed centrally within an organization. Because the human resources or legal departments of the company are not always aware of every employee’s short term business travel, it is important that the organization’s managers and employees fully understand the restrictions of entering South Africa without a visa, so they don’t inadvertently engage in activities which are not permissible under the program and consequently jeopardize their status in the country, and their employer’s compliance with the immigration laws. When in doubt, immigration counsel can easily help the company assess whether obtaining a visa in advance of their travel would be required or advantageous to permit the employee to engage in a broader range of activities while in the country.â€? “In today’s world, government compliance efforts are increasing in unprecedented proportions, and the immigration laws of many countries are becoming more complex. The collision of these conditions has made it far more challenging for employers to navigate these complex waters than ever before. Involving immigration counsel in the assessment of an existing immigration program, or development of a new program, is vital for an organization to ensure compliance with the litany of laws that can prove to be stumbling blocks to their entry into a new marketplace,â€? Ms. Yakovchuk opines. “South Africa has always been an attractive destination for a variety of reasons. Business interest in the country, and the region, however, is at an all time high and the number of companies seeking to do business in the country for the ďŹ rst time at an historic level. Being able to assist companies as they seek entry to the region is one of the most rewarding aspects of the practice.â€? To reach Fragomen’s South Africa ofďŹ ce, please call +27 (0) 11 252 1220 or email southafricainfo@fragomen.com.

Your World. Our Experience.

$0


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®

Worldwide ERC Celebrates 20 Years of the CRP ®

Worldwide ERC® is celebrating 20 years of Certified Relocation Professionals™, and Peña offers a look back at this historical mobility industry certification. BY ALLISON PEÑA

24 MOBILITY/FEBRUARY 2010


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May 1990—palms are sweaty, mouth is dry, and the butterflies in your stomach are churning. You are about to do something that no one has done before… sit for the examination to earn the newly minted Certified Relocation Professional™ designation. Questions swarm in your brain: “What if I don’t pass? What if I do? What will that mean for my career? Am I ready for this? What if I freeze and don’t know anything?” The test is given out, the instructions are read, and the time begins…

MOBILITY/FEBRUARY 2010 25


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And so it was on May 9, 1990 when the first examination was held for the Certified Relocation Professional™ designation. Twenty years in and the CRP® exam still is given annually, and the nerves, questions, and self-doubt still accompany candidates as they enter the testing rooms, prepared to test their knowledge on all things related to U.S. domestic relocation and mobility issues. To date, the CRP® exam has been offered a total of 23 times to more than 11,500 people. During the last 20 years, more than 9,300 have earned their designations, and more than 4,500 still hold their designations today. Slightly more than 1,000 candidates passed the first year’s exams and, of those designees, more than one-third will be celebrating 20 years as Certified Relocation Professionals™ in 2010. The Certified Relocation Professional™ designation originally was “anticipated to be the single most important event in our association and our businessplace… the CRP® designation will impact our industry in the way we obtain and conduct our business and will embrace all corporate and service industry professional—truly making it the ‘universal relocation designation,’” according to the December 1989 MOBILITY article from then Worldwide ERC® President, John M. Clarke, SCRP. The industry has only grown and diversified during the last 20 years. It requires specialized knowledge of the particular rules, regulations, and “soft” issues associated with the detailed process of employee mobility. We wanted to return to some of those first-year CRP® designees to determine the answers to some questions: 26 MOBILITY/FEBRUARY 2010

• Why did they take the exam? • What benefits have they seen as a result, if any? • Why have they kept the designation all these years? • How would they advise newcomers to the industry who wish to earn their own CRP® designations?

Crunch Time Most of the 20-year class that we interviewed expressed that taking the CRP® exam was a “logical next step” when it came to their careers. They already had established themselves as relocation professionals and wanted this designation to show others that relocation was (and remains) a truly niche field, with quite a bit of expertise required. It is not a job that just anyone can do— successfully, that is. The exam was a way to prove their knowledge and push the boundaries of their own job descriptions by showing that they not only knew their own part in the process, but that they knew about the entire process with all of its varied facets and, by knowing “the whole,” they were better able to serve the needs of the transferees. Some went about taking the test a little differently, though: Laura Henneberry, SCRP, GMS, of Morreale Real Estate Services, Inc., Glen Ellyn, IL, laughs as she recalls, “when I got back from lunch, there was a big pile of books on my desk and a note from the regional vice president. That is how I found out I was to take the exam. I had no idea what it was to be quite honest.” In preparing for the exam, many remember that it was quite the college atmosphere. So many were gathering into study groups, pulling all-


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nighters, drinking tons of coffee, scared about exactly what would be on that test. No one wanted to be the one who did not pass this test. On the day of the exam, a “feverpitch” was hit as nerves were frayed, nails chewed down, and the test rooms smelled not unlike a gymnasium with all the nervous bodies pressed in, concentrating so hard on the task at hand. Douglas Weed, SCRP, GMS, of NSA Consultants, Wheaton, IL, recalls, “at the time, the president of my company was taking the exam at the exact same time I was taking it. And I was seated right behind him. I finished the test and looked up to find he was still going strong. I thought, ‘wait a sec. I shouldn’t be finishing so quickly. Should I leave before him?’ I went back over the questions again and still ended up leaving a little before him.” Others swore they failed it and simply went to the bar with fellow test-takers to cry in their beers. And then… the wait for the results…. Mollie Lannigan, SCRP, president of Lannigan Consulting, Inc., Grandview, MO, recalls that when she finally received her letter, “I was just too nervous to open it. I remember holding the letter up to the light but I just couldn’t open it. It took me 15 minutes before I finally got up enough nerve to see what it said.”

Creating the Exam Taking a step back, one might wonder how that first test came to be. How did it even get created? Did a group of Worldwide ERC® staff write questions? Did the testing company review the materials and create the standards?

In actuality, while a testing company was chosen to help guide and proctor the exam, a select group of Worldwide ERC® members came together to create the standards in which the Certified Relocation Professional™ examination still is based. While there have been slight modifications and updates during the years, the standard guidelines that the first Certification Review Board created still are evident in today’s testing. Consultant, Sharon Richards, SCRP, GMS, Carmel Highlands, CA, one of the founding members of the Certification Review Board, and a past president of Worldwide ERC®, recalls that serving on the committee and helping to write all of the questions associated with the (then) THREE industry-specific examinations was truly, “the biggest project I ever undertook at ERC®. I have been a part of this organization for so long now and have been involved with many committees, but the CRP® was what I gave my heart and soul to create. I was up days, nights, and weekends, creating questions. After all, we had no basis to go from; we were creating an entire designation program from scratch!” Richards continued, “the camaraderie across the industries was incredible. I still speak with a few of the committee members to this day because that project made us become so close. By pulling all these different members from different segments of the industry to create a standard knowledge set on which other members would be tested truly made you appreciate what everyone brought to the table. “I really think that the creation of the CRP® ushered in a spirit of camaraderie within ERC® as a whole, MOBILITY/FEBRUARY 2010 27


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which is seen to this day when you go to the ERC® conferences. That spirit of togetherness, despite being amongst your competitors, was not always so evident, but I believe that this designation actually helped to foster a cooperation that only existed tenuously before.” Worldwide ERC® interim Executive Director, Karen Reid (then director of professional development), who oversaw the creation of the CRP® program 20 years ago, also witnessed its effect on the industry. “CRP® designees now had an understanding of all facets of the mobility process and their interactions with other practitioners were greatly enhanced. I noticed pretty early on how more efficient and effective Worldwide ERC® committees were thanks to the common body of knowledge held by CRP® designees and undoubtedly this also transferred into the workplace.”

The ‘Rights’ of Passage And what benefits have these 20year designees seen as a result? Phil Giessler, CRP, from Cam Taylor Co. Ltd., Realtors, Columbus, OH, says that “the CRP® raised the bar. It became so that in order for you to truly be a part of corporate relocation you needed to have this knowledge set in order to compete.” Jay Delich, SCRP, of Arizona Appraisal Team, LLC, Scottsdale, AZ, comments, “the CRP® has definitely enhanced my career as I am recognized as a specialist in relocation. Clients trust the dedication to achieving and maintaining the CRP® and it has always been a benefit to my career.” Arnold Schwartz, SCRP, of Arnold M. Schwartz & Associates, 28 MOBILITY/FEBRUARY 2010

Inc., Atlanta, GA, adds, “the CRP® continued to open up speaking opportunities at conferences and committee opportunities. I was ultimately able to serve on the Board of Directors and was inducted into the Hall of Leaders.”

“the depths of information tested are very good, especially for a lot of people who specialize in one area of relocation—it is a great opportunity to get exposure to the whole relocation picture.” Giessler encourages, “read EVERYTHING that Worldwide ERC® publishes. Digest it! Don’t just cram for the test—you will miss some valuable information.” Jeffrey Arouh, SCRP, of Holland & Knight, LLP, New York, NY, said, “it is worthwhile to earn the designation if for no other reason than it forces you to learn about the many and varied issues that exist and affect relocating employees. In order to do your job effectively, you need to be aware of these issues.”

Looking Back, Looking Ahead This 20th-year class holds their designations in high esteem. They studied hard and were determined to keep up with the recertification requirements. When asked what advice for the newcomer to this industry who is eager to earn his or her own CRP® designation, each pointed out that they need to get their feet wet and wait a couple of years. They encourage them to get some experience and knowledge under their belt before taking on this designation. After that, Kathleen Curtis, SCRP, GMS, of Cisco Systems, Inc., San Jose, CA, then advises to “take the exam. From a personal standpoint, they will have a good sense of accomplishment from studying for it and they will learn a lot from their studies. Then, keep it current—it will make them feel better about what they do and having that designation.” Dory Binge, SCRP, GMS, of Johns Manville, Denver, CO, notes,

Celebration and Continuation We would like to invite everyone, particularly the 1990, spring and fall classes, to join us in Orlando, FL, at the Worldwide ERC® National Relocation Conference to celebrate 20 years of the Certified Relocation Professional™ designation—still one of a kind in this industry. And for those who are eligible, the 24th exam will be held, as always, in May, right before the conference. Yes, the nerves and test jitters have not really changed during the years but, as you can see, it really is worth “pushing the envelope” and moving past the worry and excuses to earn the CRP® designation. We look forward, as we do each year, to helping a new class of designees join in the prestigious ranks of Worldwide ERC® members who hold this esteemed designation. Allison Peña is manager of professional development for Worldwide ERC®, Arlington, VA. She can be reached at +1 703 842 3435 or e-mail apena@worldwideerc.org.


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Culture and the Crash: Exploring the Connection Between People’s Responses to the Economic Crisis and Their Culture BY DEAN FOSTER AND NICOLE BARILE, GMS

The way people choose to respond to external negative events should be similar to the way they make decisions about so many other aspects of their lives, and that decision-making process is profoundly affected by their culture. Foster and Barile test this theory and present an overview of their findings.

aking lemonade out of lemons has become a refined art during the past year. Few individuals and organizations have been left untouched by the dramatic bursting economic bubble, and all have been challenged to adjust and respond. The way people choose to respond, however, should not be dissimilar to the way they make decisions about so many other aspects of their lives, and that decision-making process is profoundly affected by their culture. At least that was the premise we were working from when we began an intensive study in April 2009, on the link between an individual’s personal reaction to the economic crisis and his or her culture. Our hypothesis was simple and based on a belief inherent in all the work we do: how people behave is intrinsically and fundamentally tied to their culture; therefore, individual responses to the crisis not only should be culturally identifiable, but generally predictable, along cultural lines. If we knew an individual’s culture, we thought, we could anticipate the way he or she more or less might respond to key aspects of the crash. And by linking crash responses to culture, we then could anticipate the kind of reactions to the crisis, in terms of social, economic, and political decisions, that would be likely from various countries. In short, we would prove responses to the crash to be, on the one hand, just the latest major example of the “culture-drives-behavior” phenomenon and, on the other hand, a new tool for understanding the behavior of nations as they attempt to respond to the crisis.

M

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The Survey y April 2009, the effect of the economic crisis on individuals and organizations was being deeply felt around the world. The pain and anxiety was different, of course, in different locations, but few countries were immune from having to respond in some fashion to its impact. However, responses to this powerful new reality could vary, and we believed that the different ways of responding around the world were tied intrinsically to each individual’s culture. We decided to test this theory by developing a survey that would attempt to gauge an individual’s response to a variety of different aspects of the crisis, and then try to link those responses to what we know to be the underlying societal orientations of their culture. The aspects of the crisis ranged from beliefs about who or what was responsible for the crisis, ideas about the best ways to get out of the crisis, thoughts about the best ways to cope through the crisis, and the like. We created questions in a variety of formats (some using scales from one to 10, multiple-choice questions, and open-ended questions) that we categorized into three areas: 1. Reasons for the crisis. 2. How to get out of the crisis. 3. How the crisis affects you and your country. The survey was designed to be administered across as many different world cultures as possible and, being an intercultural consulting company, we focused heavily on ensuring that the survey was as culture-sensitive as possible, scrubbing out as much of our own U.S. bias of the design and language as possible (It was designed and reviewed by a number of individuals representing various cultural backgrounds. This was particularly important because, despite our desire to have the survey available in multiple languages, we could, in fact, only distribute the survey in English.). The survey would take approximately 20 minutes to one-half hour to complete. Fortunately, our database of potential respondents is inherently global, spanning thousands of individuals in more than 100 countries. We were careful to distribute the survey with a regional focus: that is, we wanted to be sure that we would capture as many potential responders who might share similar cultural attitudes toward the survey questions because of cultural similarity within a particular geographic region, to ensure a large enough response from regions where we might have a smaller per-country number of respondents. The survey design was completed and distributed electronically in June, with the request to responders to please complete it and send it back within 10 days of receipt. Responses starting coming in almost immediately and, by the end of June, we had what we believed to be statistically valid responses from a variety of the world’s major cultural and geographic regions (Europe, North America, Latin America, Asia, Africa, and the Middle East). We spent most of July and August collating the data, integrating some additional last-minute responses, and beginning the challenge of organizing response patterns according to culture. For us, this was the exciting part, for if we could find patterns of responses that were clearly identifiable with what we knew to be typical orientations of the culture of the responders, this would support our hypothesis.

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The Linkage Challenge The challenge of this undertaking, of course, was to link specific responses to known cultural orientations. While research in the crosscultural field has identified a variety of different cultural orientations around which cultures can differ worldwide, we needed to prove a link between specific responses and these cultural orientations. For example, if a responder chose to answer the question, “who is best suited to get us out of the crisis?” by selecting the answer “each individual person on their own,” as opposed to “everyone working together,” that would strongly indicate a corresponding cultural orientation to what interculturalists call “individualism” (as opposed to “collectivism”), one of the major categories of cultural orientation around the world. Not all responses were as easy to link to a cultural orientation but, surprising, many were. As interculturalists, we also know that a country’s actions—whether creating and implementing social or economic policy or making political decisions—is mainly the result of the confluence of all of its many cultural orientations, not just one. Therefore, we anticipated that while some of the responses were clearly linkable to a single cultural orientation, many of the responses were the result of a more subtle confluence of a number of critical orientations. Our final job then was to analyze the linkages between responses and cultural orientations and see if we could identify patterns that were predictable based on what we know about countries and cultures. If, for example, most of the responders from “individualist-oriented” cultures were answering the previous question with the “each individual


on their own” response, it would justify the generalization that such responses were predictive of these cultures. Further, we could then safely draw the bold conclusion that certain types of social and economic policy, as well as political action (in this case, policies and decisions that promote individual responsibility for lifting oneself out of the crisis), probably would be more acceptable, and perhaps ultimately more successful, in the individualist culture than other possible interventions. If, on the other hand, respondents from these individualist cultures mainly answered “everyone working together” to this question, we would not be able to support a link between individual’s behaviors and their culture, or a conclusion about the best possible policies and decisions to implement for that country. We definitely were hoping for the former situation. And that’s just what we got… mostly. Throughout, we tried to create questions that were engaging and relevant to the issue: “Who got us into this mess?” “What’s the best way to get out of it?” “How did you first feel when the crisis started?” “How are you feeling now?” When attempting to make the link between responses to possible cultural orientations, we found most of the responses were linkable to the following acknowledged intercultural categories, directly or in combination: Individualism or group orientation (or consensus orientation): describes the extent to which cultures value either individual activity, initiation, decision-making, and the like, or group and consensus-driven action. External control versus internal control (or resistance to or acceptance of change): describes the MOBILITY/FEBRUARY 2010 33


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extent to which cultures believe in “others” being in control of what happens, destiny, and the like, or the degree to which they believe they have control over their own destiny and the future. Risk or uncertainty comfort or discomfort: describes the extent to which cultures are either comfortable with risk, uncertainty, and ambiguity versus the degree to which they may put great effort into avoiding uncertainty, reducing risk, and determining a clear process for getting to an end result. Time orientation: describes the extent to which a culture values actions that move things progressively and conclusively toward the future versus valuing a “here and now” orientation, where how we achieved success in the past determines what we do today. Rules and systems orientation versus situationist orientation: describes the extent to which cultures rely on rules, systems, and processes versus the degree to which cultures rely on the unique and particular aspects of any given situation as the overriding criteria for making decisions and taking action. Orientation toward hierarchy and privilege versus orientation toward egalitarianism: describes the degree to which cultures confer and demonstrate respect for role and authority based on class, hierarchy, race, gender, age, and the like versus the degree to which such criteria are subordinated to competency as the overriding criteria for action. Process-driven versus resultsdriven: related in certain ways to uncertainty avoidance and internal control, this category describes the extent to which cultures value creating a perfect process as a valid 34 MOBILITY/FEBRUARY 2010

method for achieving end results versus cultures that value determining an end-result and then discovering the most efficient and valuable ways of getting there.

The Results “When this economic crisis first began, how did it make you feel?” This multiple choice question provided answers from “very anxious” to “somewhat worried” to “left it up to a higher power.” The majority of respondents were “somewhat worried” when the crisis first began, but Latin Americans and North Americans were the most worried of all (71.43 percent and 70.15 percent, respectively), with all Africans/Middle Easterners responding being “somewhat worried.” Of note, 80 percent who stated when the crisis first began that their response was to leave their fate “to a higher power” were Asian. “Which answer best describes the way you feel today about the economic crisis?” Multiple choice answers mirrored the first questions and, when asked how they feel about the crisis today, all respondents were generally more “optimistic,” with every region expressing greater optimism than North America. Of note, 75 percent of all people claiming to still feel “very anxious” today were U.S. men. “In what direction do you feel the economic situation is going?” Multiple choice answers ranged from “rapidly worsening” to “rapidly improving” (both of which received no measurable responses). While most people across most cultures believe the situation is generally improving, Africans/Middle Easterners and Latin Americans believe so significantly (100 percent and 71.43 percent, respectively).

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“How do you feel about the economic crisis as it affects your home country?” Out of the Europeans who state they are “very pessimistic” about the crisis as it affects their home country, 75 percent were British. Europeans and North Americans were “fairly pessimistic” about the crisis affecting their own country, while Latin Americans, Asians, and Middle Easterners/ Africans were significantly more positive. “When do you believe the global economic crisis will be over?” Multiple choice responses ranged from “less than 1 year” to “7+ years.” When asked when they thought the crisis would be over, the only respondents who chose “more than 7 years” were North Americans. “Who do you believe is most responsible for the global economic crisis?” Multiple choice answers ranged from “multinational companies (MNCs)” and “governments” to “individuals” and “fate/destiny/ higher power.” When asked who was most responsible for the crisis, the only respondents who chose “MNCs” were Latin Americans. The only respondents who chose “fate/ destiny/a higher power” were Asians. “Who do you believe is the best choice for getting the world out of the crisis?” Multiple choice answers mirrored the same choices as in the previous question. The majority of respondents chose “governments,” although Latin Americans and Middle Easterners/ Africans almost equally chose “individuals” (almost twice as much as Europeans), and 75 percent who chose “fate/destiny/higher power” were women (Asian).

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“Please check the box that most closely reflects how you feel about the following possible government interventions designed to alleviate the economic crisis:” Possible responses were: A. Non-conditional business bailouts (no strings attached). B. Conditional bailouts (fully accountable). C. Nationalization of private companies by governments. D. Increase everyone’s taxes to pay for government bailouts of private companies. E. Criminal investigation and prosecution of individuals and businesses associates with causing the crisis. Overall, most people “agree” with conditional bailouts (bailouts should only be given with strings attached) and “disagree” with non-conditional bailouts. The group to mostly “disagree” with conditional bailouts was Latin Americans. The group to mostly “agree” with conditional bailouts was Asian (50 percent of the respondents being from Asia). Almost all North Americans and Europeans wanted conditions. Seventy percent of all respondents who “strongly disagree” with nationalization of private companies by governments are U.S.; although overall most people disagree with nationalization, the group that most “strongly agreed” with nationalization were Asian; Europeans were the largest group to choose “agree.” Most people are “against increasing taxes to pay for government bailouts of private companies;” it is interesting to note that 100 percent of all Latin American and Middle Eastern/African respondents chose “strongly disagree.” Overall, most respondents endorse the criminal investigation and prose-

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cution of those associated with causing the crisis. The only respondents to choose “strongly disagree” (against prosecution) were North Americans and Europeans. The group most in favor of investigation and prosecution are Asians. “Which answer do you believe most reflects the best way to end this crisis?” Of note, Latin Americans overwhelmingly chose “government must create more work opportunities.” “Individuals can best survive the crisis by….” When asked how individuals can best survive the crisis, Europeans were the largest group to choose, “depend on family and friends,” Asians and Latin Americans were the largest groups to choose, “rely on government.” The only groups to choose “rely on employers” were North Americans and Europeans, with North Americans mainly choosing, “take charge of your own destiny.” “What do you feel is the best way for companies to downsize during the crisis?” When asked what is the best way for companies to downsize during the crisis, more than 60 percent who chose “lay off workers based on individual performance” were North American. Latin Americans and Asians were more in favor of “lowering salaries of all.” Europeans and Middle Easterners/Africans were torn between “lowering salaries of all” and “selective salary freezes.” “While enduring the crisis, I will…..” North Americans, Europeans, and Asians all were overwhelming in their choice that while enduring the crisis they would “learn a new skill,” no Middle Easterners or Africans chose

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this; instead, they chose, “spending time with family and friends” and “find continuing education.”

Connecting the Cultural Dots Looking at the data, we were struck by two major trends: first, we were pleased to see that the data, in the main, supported our hypothesis that responses were tied critically to cultural orientation and, second, in those few cases where responses veered away from what the cultural orientation would seem to predict, it was, for the most part, consistently what we came to call a “crash impact” response; that is, any variation from culturally predictable responses occurred mainly in those cultures where the effect of the crash was so powerful that it simply blew any and all other possible determining factors—including culture— away. For example, it was a surprise to us that the United States, a significantly “individualist” culture, scored so high in support for government intervention to get us out of the crisis while, on almost every other measure, responses from the country supported the U.S. individualist cultural orientation. We attributed the response supporting the counterintuitive government intervention to a crash impact response, given that the crisis had the most profound and immediate effect on the U.S. economy, and that the U.S. government was so deeply involved in the crisis as soon as it was identified. Starting with the questions regarding attitudes toward when the crisis first began and now, it was not surprising to find that those cultures responding on the “more anxious” side also were mainly cultures that have high risk-aversion and a MOBILITY/FEBRUARY 2010 35


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What Do You Think? re our responses to the current global economic crisis “just the latest major example of the “culture-drives-behavior” phenomenon?” Join the co-author of this article, Dean Foster, as he continues this conversation from print to the web in the Worldwide ERC® online Global Workforce Mobility All Members Forum. To read Foster’s February 1 post and to post your own questions, comments, and feedback about this topic, click on the “Communities” link at the top of the Worldwide ERC® homepage, www.WorldwideERC.org, and then select the Global Workforce Mobility All Members Forum. And, while you’re online, you can see the full charted responses to the 12 questions asked by Barile and Foster in their crisis response survey here: www.WorldwideERC.org/Resources/MOBILITYarticles/Pages/ 0210-Foster.aspx.

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stronger belief in external control. Cultures responding with “less anxious” or even “optimistic” were in the main cultures that had a higher tolerance for ambiguity and uncertainty and a stronger belief in internal control over events. It is interesting to note that certain age and gender groups in certain risk-comfortable and internal control-focused cultures (we did ask respondents to identify themselves, in addition to their culture, by age and gender for deeper analysis) scored high on “external control” and riskavoidance, and we attribute that to the challenging perception for this group that events that would affect them negatively were occurring that they could not control, an uncommon situation for previously privileged groups. This sense of lost privilege and the ability to control previously controllable events revealed itself again in questions regarding when respondents felt the crisis would be over. 36 MOBILITY/FEBRUARY 2010

When asked about who was responsible for the crisis, cultures that typically would attribute individual responsibility and a sense of control over events unsurprisingly scored high on individuals (Atypically, the U.S. response indicated a clear tendency to blame banks and financial institutions, which we attribute to a crash impact response, the failure of the U.S. banking system being the primary cause of the crisis.). Cultures that diffuse responsibility among many typically scored high on institutions (governments, MNCs, and the like), and those cultures with a strong sense of external control also responded with “fate/higher power.” When it came to questions about who could best get us out of the mess, cultures generally lined up uniformly behind some kind of government intervention; however, the type of intervention often was in line with the cultural orientation around individualism versus collectivism: individualist cultures chose responses that

considered individual actions and conditions as a primary criteria, while collectivist cultures chose responses that required all to sacrifice for all. Interestingly, Asians scored the highest in approving of non-conditional bailouts (no strings attached), which we saw as a cultural statement on the importance of diffusing responsibility in collectivist oriented cultures (shame being more a more important motivator than guilt). Again, individualist North American responses were strongly against nationalization, while more collectivist European cultures were strongly for nationalization. When it came to increasing taxes to pay for bailouts, North American individualist cultures supported individualist responsibility (more income, more tax; less income, less tax), while more government-oriented (collectivist) European cultures more uniformly supported increased taxes for everyone. Interestingly, both Latin American and African/Middle Eastern cultures resisted the idea of government intervention in most forms as a solution, reflecting, we believe, these culture’s historical and deep distrust of the effectiveness of government solutions to social and political problems. While on the one hand, the collectivist cultures of Latin America, Africa, and the Middle East expect uniform sacrifice by all for the good of society, and express an ideal wish for government to solve the problem, they do not on the whole believe that government intervention can in fact solve the problem, or effect the required group sacrifice (traditionally, such collective action in these cultures occurs through non-governmental institutions, such as the church, family, and non-government-sponsored political action, i.e., resistance).


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When we asked the question about how individuals planned to best survive the crisis, the responses revolved mainly around the cultural orientation toward individualism versus collectivism (take charge of my own destiny, or rely on institutions and others— including a higher power—to do so). For example, Latin Americans and Asians chose “depending on government action” and “relying on family and friends,” while North Americans chose “take charge of your own destiny” consistently. When asked about the best way for companies to downsize in response to the crisis, the responses were very clear and revolved around a number of cultural orientations, including individualism versus collectivism, and rules/systems/ processes versus subjective/ particularist/situationalist action. Latin Americans, for example, were more in favor of “lowering salaries for all,” while North Americans were more in favor of “company-wide salary freeze” and “layoff workers based on individual performance.” Finally, when asked about what they will do while enduring the crisis, responses were clearly in line with their country’s cultural orientation: Middle Easterners and Latin Americans scored the highest on “spending more time with family and friends,” with Latin Americans scoring the highest on “seeking spiritual guidance;” Europeans scored the highest on “learn a new skill or hobby,” with North Americans and Latin Americans eager to find “a new job” (indicating to us a high level of distrust in relying on existing contacts and institutions, and a willingness, inherent in both cultural sets, to try new things and creatively solve problems).

Some Major Conclusions Beyond the inherent fascination with the responses, we were pleased to see that there were direct correlations between the cultural orientations inherent in the questions and answers and the responses from the different cultures being surveyed. We believe that the study supports our initial hypothesis that the variety of responses to the economic crisis are clearly rooted in the cultural orientations of the individuals responding. As the data shows, most of the time, responders from any one particular country overwhelmingly chose answers that were in sync with the cultural orientations of their country. In addition: • Different responders (and subsequently the countries they represented) provided very different responses to the same questions, each mainly in synch with their own respective cultural orientations. • Individual responses were in the main predictive of the country from which they came. • Some countries were affected by the crisis more severely than others, and the perceived severity is reflected in the responses from individuals of those countries (this might have a mitigating affect on culture being the overriding driver behind the response; the “crash response”). • A nation’s social, economic, and political response to the crisis can, therefore, be anticipated based on their cultural orientations. • Social, economic, and political interventions, designed to ameliorate the crisis, need to be created and applied differently in different cultures, based on the cultural orientations of those countries. • Drilling down into the data, we also can draw some interesting conclusions regarding differences

between gender and generation to the questions that, going beyond culture, do support known gender and generational orientations. Editor’s note: Dean Foster’s upcoming book, “The Culture Prophecy,” makes the case that culture often is the overlooked indicator as to the actions of individuals, organizations, and nations. All too often, we look for explanations for an individual’s behavior, an organization’s strategy, or a nation’s political decisions, in an economic or political analysis of the event. “The Culture Prophecy” makes the case that the real reason for these behaviors is deeper, embedded in the cultural DNA of an individual, organization, or nation, and that economic, social, and political decisions are, in fact, the result, and not the source, of cultural orientations. If we analyze any issue, whether it is an individual’s behavior, a business’ strategy, or a nation’s actions, from a cultural perspective as opposed to merely an economic or political one, we have a whole new tool for understanding—and anticipating—the behaviors and decisions of individuals, businesses, and nations. The book looks at a number of examples, ranging from popular culture, business lore, and the world’s headlines, to support the idea of “cultural analysis” as a fundamental predictor of behavior, and the results discovered through the study of cultural responses to the world economic crisis of 2009 goes far in supporting Foster and Barile’s belief in the prophetic power of culture. Dean Foster is president of DFA Intercultural Global Solutions, Brooklyn, NY. He can be reached at +1 718 287 9890 or e-mail dean@deanfosterassociates.com. Nicole Barile, GMS, is director of program development for DFA Intercultural Global Solutions, Brooklyn, NY. She can be reached at +1 718 287 9890 or e-mail nicole@deanfosterassociates.com. MOBILITY/FEBRUARY 2010 37


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A topic that continues to gain industry interest is the localization of international assignees in the host country. According to Bosson and Wilkes, this practice continues to grow in use as HR managers, under pressure to trim the costs of global mobility programs, increasingly are turning to localization.

BY YVONNE BOSSON, GMS, AND DEBORAH WILKES mployers are using localization today more than ever based on perceived cost savings as compared to traditional international assignments. The term “localization� in today’s global environment has developed many variations to its once straightforward and purest form, which is the process of transitioning an expatriate remuneration package (compensation, medical benefits, retirement/pension plans, and taxes) into one provided to a locally hired employee in a similar position. The fundamental decision to use localization depends on whether the employee will return to the home country. The answer not only affects participation in benefit plans, but also affects important personal financial decisions such as retirement and estate planning, as well as whether to purchase a home in the host location. Localization is a viable option when the understanding is that there is no intention for the employee to return to their home country.

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Why Do Employers Localize? The primary reason most employers move to localization is cost savings. If managed correctly, localizations can reduce costs, although the exact savings (25 to 50 percent) vary greatly depending on location and extent of localization. However, there are other reasons why employers consider localization initially, such as what began as a temporary assignment is now a permanent position, or the temporary assignment has been concluded and the assignee has moved into a new role that is really a host-location position. Localization is not always driven by the employer, as an employee also may request to be localized in the host country. It may be that the job opportunity that the employee wants is in the host country and cannot be matched in the home country or it is time for the employee to repatriate, but there is not an appropriate position in the home country, or the assignee (for personal reasons) simply wishes to remain beyond the terms of the international assignment contract. MOBILITY/FEBRUARY 2010 39


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Localization Is Easy, Right? When localizing an employee, there are many complex issues that employers and employees must consider seriously and proactively address as part of the local agreement. Following are a few of the most critical components to consider. Base salary. The preferred approach is for employers to transition the employee to local salary levels. It is not recommended that the employer simply convert the home country base salary using an exchange rate; rather, total compensation should be compensable to the position the employee will be holding in the host country. Employment law/immigration. Given that localization is a permanent move, it will be necessary to start a legal permanent residency/citizenship process. Consult with qualified attorneys in both the home and host countries. In some situations, even though the employee is employed in the host location, they still may be entitled to severance payments from the home country organization. There is a possibility the employee will not be able to secure permanent residence in the host country for any number of reasons. Consult legal counsel. Income taxes. While the employee now will be subject to the host country tax system, he or she may have continuing liability for the home country income taxation. This is a complex issue, and does require research and consideration prior to acceptance of localization. Employers must clearly state what, if any, tax support will be provided so the employee is fully aware of the tax compliance obligation inherent with the localization. Employers should be aware that federal governments 40 MOBILITY/FEBRUARY 2010

do hold corporations to a higher standard of liability for tax filing and payment than the employee. There have been situations where the employer left it to the employees to file tax returns but the employees failed to report some or all of the income as required by the home country (Germany, Brazil). The taxing authorities of Germany and Brazil discovered the failure to report, and the respective governments not only forced the employees to make up their back taxes due plus penalties, but the employer was forbidden from doing business in both Germany and Brazil. The government maintains the position that it was the employer that stationed the employee abroad and is, therefore, responsible for assuring that all tax liabilities are paid in full. Consult with your tax firm. Pension/retirement benefits. This is the real “800-pound gorilla” in the room that represents formidable challenges to evaluate and resolve for both the employer and employee. Each country has its own rules and regulations as to how long an employee has to work to qualify (be vested) for benefits, and each country calculates the retirement/ pension benefits differently, which makes the integration and transfer of pension benefits extremely difficult— impossible in many circumstances. Multiple “bits and pieces” of pension plans will not equate to a home country peer’s “whole pension,” as there is a heavier accrual in the last years in the calculation itself. In most countries, employees rarely can remain in their retirement (401(k)) or social insurance plans as voluntary contributions are not accepted (only exception might be if they were selfemployed) and frequently the


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employee loses his or her rights to disability benefits. Some of the questions that must be answered include: 1. After the localization, will the employee be able to continue contributing to a qualified pension or savings plan such as a 401(k) plan? 2. If the employee is still entitled to participate in such plans, will future contributions be calculated on the basis of a host country salary? 3. If the employee is prevented by plan rules from participating in those retirement plans and must withdraw his or her funds, who will pay the likely tax penalty? If the employee retains funds in home country qualified plans, the income generated by those funds, though not normally taxable at home, probably are considered taxable in the host country. Who is liable for such taxes? 4. How will the employee’s years of service in the home country count toward retirement benefits in the host country? 5. The employee will retire with split participation in both home and host country social security/pension

systems. Will that cause the employee to be subject to a reduction in benefits? 6. How can the employee know what his or her final social security/ retirement/pension income will be? 7. Who will help the employee apply for benefits under a totalization agreement (if one exists)?

Solutions for the Biggest Challenges? It is a challenge for employers to establish and administer pension programs in multiple countries. Many multinational companies are seeking a global approach to employee mobility and use global employment companies to address these needs. Establish an offshore global employment organization (GEO), an employee leasing organization, to which your “global nomads” are attached. The organization may be “for profit” or operate “at cost” to the parent, which is a corporate business decision. A GEO permits all global employees who are subject to work assignments in multiple or sequential global locations to be

placed on a global pay scale that is compensatory to the position’s responsibilities regardless of the location of assignment, have a formal retirement plan that is registered for multiple nationalities, and provides equitable employment law protections. If the size of the employer’s global employee population would not justify the cost of establishing a GEO, and the primary challenge is the resolution of the pension/retirement plan issues, then consider a shadow 401(k)-type plan that can be established in an offshore plan. There are several countries that have fewer plan design restrictions and favorable tax regimes to support such schemes.

Challenges With Implementation While localization offers some clear-cut benefits to employers and employees, localization is not for everyone. Generally speaking, localization will be much more difficult when it involves employees from an advanced industrial nation going to one of the lesser developed countries.

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Localization Agreement Traditional Components Following are the traditional components addressed in a localization agreement: • health benefits/pensions; • cultural/language training; • taxes (liability/tax return prep in home/host country); • vacation/sick time (service date); • household goods/pets; • spouse/partner assistance; • home country housing support; • rental car (home/host country); • dependent education; • airfare to return to home country to close out ties; • termination of employment (voluntary/involuntary)/ payback terms (prorated?); and • immigration/permanent residence/citizenship. Many countries have low standards of living, less sophisticated social security, retirement savings, and pension systems, and less reliable currencies. All of those factors can spell trouble for the long-term planning crucial to localization. Further, the transition from expatriate to localized employee is most effective when the employee knows up front that the assignment-related benefits will cease and the employee, if he or she wants to remain in the host country, will be localized (i.e., after three to five years on assignment). For clarification, it is recommended the potential for localization be stated in the expatriate policy and letter of assignment. Localization represents a real alternative to traditional temporary assignments. At the same time, the 42 MOBILITY/FEBRUARY 2010

significant differences between locations around the globe mean that there are challenges to localization that sometimes cannot be surmounted. Certainly, localization programs and policies are in effect and are effective at a number of employers around the globe, but determining if and how they apply in any organization requires consideration of a large number of factors.

Ideal Scenarios for Localization When attempting to structure the localization agreement of an employee from a highly developed country to a developing country, there are case-by-case modifications that are necessary because of extreme differences in the base pay structures of the home country versus the host country; cost-of-living differentials;

and cultural or quality of life differences that made localization an extremely difficult employment status to “sell.” Such “modifications” make the costs savings and intangible benefits of localizations a debatable issue. It becomes apparent rather quickly to multinational corporations that there were certain criteria that make localization a more acceptable option to offer their assignees: • limited promotional opportunities or the employee has “outgrown” the internal progression structure in the home country; • significant promotional opportunities in the host country; • employee’s skills and competencies are in higher demand in the host country; • salary structure/pay scale of the host country is higher; • employee benefits and employment laws are more favorable in the host country; • employee (and/or their family) has personal reasons to want to remain in or transfer to the host country; and • employee has requested the localization. There are different approaches to implementing local status. The most common is a straight localization, ceasing all assignment-related benefits effective immediately (housing allowance, cost-of-living allowance, home leave, and the like) on the effective date of localization. Transitioning from an expatriatebased lifestyle to a local-based lifestyle may take time, hence the reason many employers respond by providing transitional assistance. Transitional assistance may mean employers continue to pay some premiums/allowances for a specified period of time (e.g., one, two, three


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years) or to provide the allowance on an annual declining scale basis during that time (e.g., 75 percent, 50 percent, 25 percent). This approach is commonly known as a “local-plus” package, which provides allowances less than the full expatriate package, but more than local pay and benefits. Some assignment-related allowances would be phased out over a pre-determined duration of time. For example, many employers will continue to pay a reduced housing allowance for a specified period of (transitional) time after the effective date of localization and phase out education assistance and home leave. In locations where assignees receive a cost-of-living differential, common practice is to stop this allowance immediately. Other assignment incentives such as mobility/foreign service premiums and hardship allowances normally cease with the effective date of conversion to local status. A less common approach is the lump-sum method that is rarely used because of the tax treatment of lump-

sum payments for those employees with both home country and host country income tax exposure. Stated simply, a lump-sum payment is fully exposed to income taxation in both the home and host countries and may not generate as much benefit to the employee as employer-paid (or directly reimbursed) household goods shipment, immigration expenses, and education costs.

Policy? Absolutely! It is important that employers have a clearly defined localization policy/ agreement that must be communicated and re-communicated to the employee and business manager in the beginning of the discussion to localize. Employers may want two policies; one to address expatriate conversions and another for international transferees who were never on an assignment. Localization is not the cost-saving solution that so many have made it out to be. The appeal of near-term reductions in assignment program costs can lead to shortsighted deci-

sions that can come back to haunt the employer, the employee, or both. It is in the employer’s and the employee’s best interest to make sure that all involved understand that localization is not to be entered into lightly. Employee and employer must make some tough decisions and confront the questions of whether the long-term goal is localization or eventual return to the home country, and whether it ultimately will result in cost savings. But, in the long run, the result is better for both the employee and the employer when the right decision is made in the beginning. Proceed with caution to ensure localizations are managed based on educated decisions by all parties involved. Yvonne Bosson, GMS, is founder and president of Bosson Consulting, Dallas, TX. She can be reached at +1 214 499 0237 or e-mail bosson@ybosson.com. Deborah Wilkes is director, global consulting services, Lexicon Relocation, Jacksonville, FL. She can be reached at +1 904 390 7195 or e-mail dwilkes@lexiconrelocation.com.

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Recession, mergers, acquisitions, defaults, bankruptcies, foreclosures, commoditization—the real estate and mobility industry is navigating through the worst U.S. business crisis since the Great Depression. At a time when image and leadership are more important than ever, where does branding fit in? D’Ambrogio explores how individuals and organizations can perpetuate their brands in times of change.

B Y J O H N D ’ A M B R O G I O , C R P, G M S

H

istory has shown us that you can buy a company, but you can’t “buy” a brand or coerce it to fit your goals. A conglomerate buying a niche player does not give the bigger fish the qualities of the brand they bought. The merger of two companies can increase economies of scale and eliminate redundancies (those redundancies are our many colleagues who are now out of work). However, preserving the desired, or stronger, of the two brands is much more difficult to accomplish. Simply joining forces does not instantly (or automatically) confer desirable brand qualities from either company to the new entity, yet these intangibles are an important factor in the eyes of the consumer. Judy Gray, CRP, global relocation director for Cam Taylor Co Ltd, Realtors®, Columbus, OH, and 2010 president of the board for The Relocation Directors Council, Inc.®, adds, “never has branding been more critical than it is today. An effective brand gives you a major edge, especially during challenging times like we’re currently facing. Just because market conditions change, your brand should never change. It is your identity, your reputation, your value, and your promise to your clients. It differentiates you from all others. When you provide a consistent message with a consistent delivery model, you and your company will become the brand of choice.”

“trust and transparency (are) more important to us than ever.” Powerful words from one of the world’s most powerful brands. This is all coming at a point where there are immense issues of “trust” between consumers and business. A recent survey by PR giant Edelman indicated that the percentage of Americans indicating they trust business is 44 percent, the lowest point in the last seven years. At the end of September, BusinessWeek reported the biggest winners in their annual survey of “The Best Global Brands” Not surprising, two companies with the biggest gains have a reputation for customer service and trust—Google (increase in perceived brand value 25 percent) and Amazon.com (up 22 percent). What is “brand value?” In short, it is the monetary value of the brand, in millions of dollars (Google came in at 31,980, Amazon at 7,858). Big numbers. Whose brands are worth the most in this economy? Some familiar names, to be sure: Coca-Cola (68,734), IBM (60,211), and Microsoft (56,647) lead the pack. And who is slipping to the bottom? I will let you read the article itself but, not surprising, four of the five biggest losers are financial institutions. And no, there were not any real estate or relocation companies in the top 100.

The Brand is Mightier than the Sum of its Parts—Usually! Economics Is (More than Ever) About Emotion and Psychology Emotion, psychology, passion, and trust—perhaps economics are more about these things than ever. Or maybe we are just now remembering that. How powerful and important for a brand is trust? Mary Dillon, global chief marketing officer for McDonalds, Oak Brook, IL, recently was quoted as saying,

In an example of brand superiority that may be lost on Gen Y—John Lennon and Paul McCartney never enjoyed the success they had after they left their “Beatles” branding (to say nothing of poor Ringo!). That is to say, powerhouse executive teams that have built a culture (in this case helped define a decade of culture) have a challenge, to say the least, when they decide to redefine themselves without listening to their audience. MOBILITY/FEBRUARY 2010 45


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How does this relate to the employee mobility industry? Well, your brand is reviewed with every relocation. As a group, we need to remember that we are dealing with (likely) the biggest purchase a family makes in its lifetime (and currently at a time when it is experiencing the biggest decline in net worth that it will ever see). To miss the opportunity to make or break your reputation by your handling of this transaction is foolhardy (I would like to note here that when transferees hear the word “dispose” when discussing the sale of their home, that is not a good thing….).

Securing Your Brand—Personal Versus Corporate The brand at a real estate or relocation management company likely is defined by its people as well as its corporate culture (not to say that service does not play into its perceived brand). Any changes to the brand— whether they come from mergers, acquisitions, or policy changes— require the buy-in and support of the executive management team. The message behind any of these events must be communicated to employees, clients, and customers by a united front to secure stability for both the corporate and personal brand. According to Sharon Michnay, CRP, GMS, director of corporate business development for Halstead Property, New York, NY, “in relocation, actually in every industry, both a strong corporate brand and a strong personal brand are prerequisites of success. In fact, the necessity of a strong corporate brand may be of more importance than ever in relocation as of late. Considering the mergers, acquisitions and closures of companies during these hard finan46 MOBILITY/FEBRUARY 2010

cial times, confidence in a company’s ability to provide service has been deeply shaken.” Today, a company not only must be a recognized leader in their industry/area but also must show it can maintain that position. If in doubt, check the increasing number of questions on RFPs that lend themselves to describing a company’s stability. Michnay adds, “in an industry that demands a ‘single point of contact’ there is also a ‘single point of accountability.’ A company that has a strong brand, but lacks a strong representative known for its industry expertise and superior service delivery will have limited success and vice versa.” That’s a powerful idea. Can the personal brand of the executive usurp that of the corporate brand? “That can be a serious issue for a company,” says Dave Collins, CRP, vice president of strategic development for OnBoard Informatics, Weddington, NC. “If personal brand is stronger than corporate brand, it can put the company at risk both in terms of human capital and potential lost clients. While it is important to always be building your reputation (and, therefore, to some extent your brand), individuals should seek to always represent the corporate brand to the best of their abilities. It’s difficult for an individual to represent everything a brand is to everyone out there.” That being said, we have all heard stories of corporate accounts following a stellar salesperson, or entire offices of agents walking across the street to follow a favorite manager. In a Web 2.0 world, where participation on social networking sites and blogs are instrumental to an individ-

ual’s and company’s success, the word “mobile” takes on a whole new meaning. It is easier to find an individual than ever before and information is disseminated at a mind-bending pace. There exists a symbiotic relationship between the corporate and executive brands, however, ultimately the most important element can be the loyalty the customer feels toward one or both. Despite the perceived risks, it is to the benefit of both parties to realize and support that relationship.

Web 2.0, Branding, and Corporate Culture Speaking of the web, the landscape is quickly changing in how social media is perceived as an authoritative voice. How does Web 2.0 affect branding? Today’s consumers, especially Generation Y (who will be buying a lot of houses in their lifetimes), are more affected by “influencers”—they listen less and less to traditional forms of advertising and trust their sphere of influence, so that good (or bad) review on Yelp! may define the brand more than the talking head on the TV. Game-changing stuff! All the more reason that progressive companies have reached beyond their own websites to strategies that include LinkedIn, Facebook, Twitter (yes, Twitter) corporate sites, YouTube channels, direct and indirect corporate blogs, and the like to reach out to tomorrow’s consumers today.

Mergers and Acquisitions—Defining Moments in Your Brand According to Stefanie R. Schreck, CRP, GMS, manager of corporate relocation for American Insurance Group, Inc., New York, NY, “any time there is a merger or acquisition,


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employees feel unsettled, and it’s common for transferees to delay their relocations due to the unknown. Once management is able to establish direction within the new company, employees start to feel more stable, morale increases, productivity increases, and more employees are willing to take the risk of relocation.� On a larger scale, there are no more defining moments in a company’s history than the decision to merge, sell, or acquire. This is a critical time for a brand. John Horning, principal of Shorewest RealtorsŽ, Milwaukee, WI, says that “brand and cultural alignment are key to a successful merger.� Shorewest should know—they have completed six successful acquisitions in the last five years with minimal attrition. The reason, according to Horning, is that they “invest time investigating the culture and brand strength of the office we are acquiring. We have walked away from several opportunities that were not a fit. If an office is not focused on provid-

ing unsurpassed customer service to its clients or there is not a sense of teamwork among the associates and office staff, they likely will not be a fit.� John Sable, principal for Active Website (whose clients are primarily independent real estate firms), Boulder, CO, has seen many mergers and acquisitionss in his career. Sable comments, “companies work for years to build a message and a brand for their employees, shareholders, and customers. This brand ends up establishing a culture for the company. Then comes a defining moment such as a merger or acquisition. At these moments, the decisions we make as leaders determine the future of the brand. If not, they run the risk of losing everything they have worked for.� He goes on to say, “if the two companies do not align on culture and branding, you run the risk of losing the trust of key people and, worst of all, you send a mixed message to the marketplace. This is where the real risk lies because it’s almost impossible to regain the lost momen-

2EUNITINGTHEONESYOULOVE ANYWHEREINTHEWORLD

tum and position.� History is ripe with examples. Sable’s business partner, John Gadeken, agrees. “Losing site of corporate branding is really a loss of focus. Often, we follow trends and trends can take us out of focus. When communicating with your customers, remember that people like to be communicated to differently. If you communicate to your customers how they want to be communicated to, this will create loyalty to the brand. If you focus on creating a dialogue with your customers, gaining their trust, they’ll be more likely to be loyal to your brand. The web, social networking, and mobile devices give us such opportunity to reach out to the masses.� The future is here. Consumers have more research at their fingertips than ever before. Communicate with them wisely and be sure to listen to what they are saying. John D’Ambrogio, CRP, GMS, is vice president, strategic development for Baird and Warner, Chicago, IL. He can be reached at +1 312 857 9909 or e-mail john.dambrogio@bairdwarner.com.

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Mergers and Acquisitions: S E V E N

T I P S

M O B I L I T Y

F O R

S U C C E S S F U L

P R O G R A M

I N T E G R A T I O N

B Y S U S A N V I T T O R I O , C R P, P H R , A N D J O L E E N L A U F F E R , C R P, G M S “THE HIGH-PRICED BANKERS AND LAWYERS exit with the close,” write Mark L. Feldman and Michael F. Spratt in their book, “Five Frogs on a Log,” “…leaving management to confront the challenge of producing results that justify the price, the added risk, and/or the significant disruption to current operations. To complicate matters, they face what amounts to a new company and a set of unexpected demands that can easily divert them from capturing the value that drove the deal.” In a time when mergers and acquisitions (M&A) abound, these words from two partners and managing directors of PricewaterhouseCooper’s global M&A consulting division succinctly summarize the challenges and opportunities that permeate newly formed organizations at all levels. The following tips have been documented to assist mobility program owners to successfully navigate the intense period of transformation that accompanies a M&A and will serve as a guide for mobility professionals tasked with the integration of mobility policies and programs. These pointers also provide guidance regarding how corporate mobility professionals can focus on strategic, actionable measures and events in order to achieve a successful program that creates value for the organization.

The Seven Tips 1. Identify very early which policy and program will be administered to transferees resulting from the integration.

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Each integration model is different. As such, there could be strategic reasons for consolidating the two companies under one program; traditionally, this is the acquiring company’s program. In contrast, there may be a strong argument for administering each organization’s integration transfers under its own existing or legacy policy. There are pros and cons to both approaches, which are illustrated in the chart on page 52. It is imperative that those decisions are made well in advance of any selection process so that candidates and applicants for positions resulting from the organizational transformation are well informed regarding available benefits. The employees who are offered positions need to review the mobility benefits as part of the overall employment offering. In 2006, the online brokerage firm Ameritrade completed its acquisition of TD Waterhouse Group Inc.’s U.S. retail securities business to form TD Ameritrade. During the year of integration, 140 employees accepted a transfer with TD Ameritrade. During this time period, Lisa Reynolds-Kerley was tasked with effectively managing the integration transfers as well as those not related to the acquisition. Reynolds-Kerley notes that thoroughness and consistency were the keys to successfully managing employee mobility throughout the integration. “TDA opted to offer associates (since there were so many) a few different options in terms of relocations, depending on their level within the company,” she said. “TDA wanted to be as consistent as possible in their offerings, and because of that, opted for only offering a few different relocation packages. Since associates almost


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With mergers and acquisitions comes challenges and opportunities, and Vittorio and Lauffer offer seven tips for successfully integrating mobility programs after a consolidation of companies has occurred.

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One Program or Two? Administering One Program During the Integration PROS

CONS

Elimination of different benefits for employees relocating from either organization as a result of the integration

Training and education of acquired HR staff on the policies and procedures for the mobility program

Administered under one program coordinator

Program coordinator of the acquiring company must be able to handle the additional volume of the transfers resulting from the integration

No additional training required for acquiring HR staff

Program coordinator of the acquiring company must manage the preintegration transfers already in process Systems will need to be in place to accommodate the transition of existing transferees of the acquired company Pre-integration transfers already in process potentially could be changing providers mid-stream

Administering Both Programs During the Integration PROS

CONS

The legacy company employees are administered under their previous company policies

Training and education of acquiring HR staff on the policies and procedures

No disruption to pre-integration of inprocess transferees

Maintenance of two programs and providers

No additional training required for acquired HR staff

Potential effect on systems (if two systems are maintained for a period of time, this could become a pro)

Provides additional time to perform due diligence on the policies and contract review Transfers resulting from the integration can be administered by both program administrators, lessening the burden of the additional volume on either administrator

always have exceptions due to the valuables in their homes or accommodations for family members and pets, the offerings had to be thorough and consistent.� Regardless of which integration policy model is used, it is important to remember that these are consider52 MOBILITY/FEBRUARY 2010

ations for the transfers resulting from the integration only. On completion of the integration, one program should be administered. In each model, care and consideration should be given to the notification of the mobility service providers. In addition, it is essential that sufficient

training is provided to the impacted HR staff regarding any changes to policy provisions or procedures. 2. Effectively transition those transferees currently in process. It is essential to give special care and attention to the transferees who are currently in process. Transferring to a new location is a very stressful situation for any employee. That anxiety, combined with the stress level brought about by a corporate M&A, may create a volatile situation for the transferee. Frequently, the integration becomes all-consuming, and those employees already in process easily can become lost in the shuffle. Ensure that those transferees are accounted for and properly supported by HR and by the mobility service provider. Mobility program owners should make every effort to have existing transferees finish the transfer with the same provider. Special care should be given to those transferees being switched to a new provider mid-stream or for the administration of ongoing benefits or allowances. 3. Ensure that any ongoing payments for completed transfers are addressed. Program integrators should evaluate those transferees who have settled at the new location but are receiving ongoing or multi-year payments, including benefits such as a housing subsidy, mortgage buy down, or cost-of-living assistance. If these payments currently are made by company payroll, it is critical that these employees are properly transferred to the acquiring company payroll system. At the time of payroll transfer, the documentation should be in place to include the method of payment, amount, and period of time. Whether the payments are made


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directly to the employee via payroll or directly to the mortgage lender, responsibility for the oversight of these payments should transfer to the program administrator who will be handling the program moving forward. If there are changes to the method of payment to the employee because of system or process differences, then that information also must be communicated to the employee and the lender. Layoffs often are an unfortunate result of a M&A. It is important that HR notifies the mobility program administrator of all exiting employees who could be receiving ongoing payments or benefits so that payments can be cancelled accordingly. It is especially critical to identify these payments if payments are made via an accounts payable department to the lender or mobility services provider and not via payroll, as there is increased risk for overpayment if information is not shared in a timely manner. As such, without the appropriate communication, the company could be expending funds for individuals who are no longer employed.

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4. Complete a side-by-side comparison of the policies and contracts with all relocation providers. For many companies, once the policies and contracts are in place, the thought is that the job is complete. However, there may be a need for thorough policy review if the market trends warrant further evaluation, or if there is a pattern of approved exceptions. During the integration period, both companies are afforded an excellent opportunity to review best practices and to benchmark current offerings. It is truly an opportunity to shake the dust off of not only the policies, but the contracts as well. The template below illustrates a simple approach to policy comparison. The above analysis can be used to facilitate discussions regarding the most favorable, competitive, and cost-conscious mobility benefits for the newly formed organization. From a contract perspective, the transformation period is the perfect opportunity to capture synergies and to leverage purchasing power. Based on company requirements and pur-

chasing initiatives, it may be prudent to pursue a RFP process with multiple providers to ensure that the new program is serviced and priced at market competitive levels. Integrators will find that although mobility service providers all offer the basic core services, there are significant differences in level of service, technology, and overall processes which could create an opportunity to implement improvements during the integration period. Program owners from both organizations should be open to the possibility for change. These changes could be the key to making fundamental improvements that make the program more competitive and strategic. 5. Program (re-)implementation. Whether the decision is to maintain two programs for a period of time, to take the best of both programs, to move forward with the legacy program, or to create something completely new, there will come a time where integrators will have to implement the identified program for all future relocations. Rolling out a relocation program is

Sample Policy Comparison POLICY COMPONENT

COMPANY A

COMPANY B

BEST PRACTICE/ BENCHMARK*

Domestic Policy Structure

Two Policies —Homeowner/Renter

Four Policies —Tiered by Grade Level

Three Tiers

Homefinding Trips

Homeowner—two trips, four tickets, seven days

Homeowner or Renter —two trips, four tickets, seven days

Homeowner—two trips, four tickets, seven days

Temporary Living

Renter—one trip, two tickets, five days

Renter—one trip, two tickets, five days

Renter—one trip, two tickets, five days

Loss on Sale

60 days homeowner 30 days renter

90 days homeowner 30 days renter

60 days homeowner 30 days renter

Renter Lease Cancellation Fee

Not available

1 percent capped at $25,000, grossed-up

$30,000 cap, grossed-up

Other Benefits

Two and one-half months

Two months

One month

*Benchmark data should be readily available from the mobility service providers supporting each program.

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not as simple as turning on a switch. As such, it is wise to invite the selected provider for the new program to conduct an on-site implementation. If the program remains largely unchanged from the historic process, this step may seem unnecessary; however, the transitional period is again an excellent opportunity to

54 MOBILITY/FEBRUARY 2010

shore up procedures, implement improvements, and ensure that all program owners are aware of the approved guidelines and service delivery procedures. 6. Ensure that the plan for yearend reporting is clearly defined. As the program integration is completed, it is imperative to consider

the implications to year-end reporting and payroll. Program owners should have a goal that there will be 100 percent payroll reporting accuracy and that no W-2Cs will result from the integration of payroll systems that takes place concurrently with employee transfers. Based on the timing of the payroll integration,


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program owners should consider that one or more of the following actions may be necessary: • Ensure that mobility expenses previously reported to payroll will transfer to the new payroll system. If expenses will not transfer, these may need to be re-reported to the new payroll entity. • Maintain transferees on legacy payroll system until mobility fiscal cut-off date is reached so that only the legacy system holds data related to transferee income for the year of integration. • Conduct an audit of data housed in both payroll systems as well as mobility services provider data to ensure that no items are missed or double reported. 7. Measurements, milestones, and timelines for key integration points. An integral part of the integration and re-implementation process should be to identify key metrics that will measure the success of the program. Communicating the expectations related to goals and timelines for each participant in the process is essential. Reynolds-Kerley advises mobility professionals to “set timelines and turn around times for those associates moving. It is a very large undertaking to move, whether it be across country or across the county, so when associates know when they can be expect to be contacted, how long the turn around time is for payment of the miscellaneous expense allowance or household goods packing, etc., it puts them at ease. Then they can concentrate on being productive at work and not worrying about their relocation.” Key program elements that should be measured pre- and post integration are:

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• transfer acceptance rates (offers versus accepted); • transferee satisfaction; • W-2 accuracy; • average cost of homeowner, renter, new hire, and transfer moves; • policy exception expenditures as a percentage of total program spend; • HR and recruiter satisfaction should be measured via internal surveys; and • integration spend vs. nonintegration-related mobility spending. In addition, it is important to identify key integration points and to set target dates for completion of these goals. The chart on page 54 shows a timeline that illustrates the key dates that should be tracked.

In summary, mobility program integration can be a challenging endeavor as well as an exciting opportunity for growth and improvement. With careful planning, diligent communication, and an open mind, program owners can navigate these uncertain times successfully and can use the tools and tips mentioned in this article to create value for the newly formed organization. Susan Vittorio, CRP, PHR, is manager, people services, Ciba Corporation—a part of BASF, Tarrytown, NY. She can be reached at +1 914 785 2265 or e-mail susan.vittorio@basf.com. Joleen Lauffer, CRP, GMS, is director of client services/operations, AIReS, Pittsburgh, PA, and a member of the MOBILITY Editorial Advisory Committee. She can be reached at +1 412 788 0461 or e-mail jlauffe@aires.com.

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A Holistic, Team Approach to Global Assignments Minimizes Risk and Promotes Success

BY WES OKUMURA Successfully moving employees across borders involves a careful balancing act of risk management and cost containment. As the complexity of managing overseas assignments grows, organizations often are plagued by insufficient coordination and a shortage of oversight. Okumura says that a holistic, team approach to managing global assignment programs, with effective communication and cohesiveness as its core principles, is essential to addressing these shortfalls. s globalization continues to expand its reach, the risks associated with international assignment programs continue to increase both in magnitude and complexity. Organizations that send their employees across borders must remain agile enough to comply with an ever-changing web of tax and immigration laws and regulations. At the same time, organizations need to contain tax and assignment costs, maintain accurate data reporting at all locations, and support the fair and equitable treatment of employees worldwide, among other global imperatives. The consequences of failing to keep up with the rapid pace of change can be alarming. A manufacturer became the target of China’s largest-ever payroll audit and was assessed USD $25 million in back taxes and USD $8 million in penalties. A European multinational was hit with EUR ₏5 million in penalties for failing to fully report home-paid compensation for employees assigned to work in India. The company paid professional fees of more than EUR ₏1 million to respond to a three-year investigation by Indian authorities. These are just a few examples culled from a disconcerting spate of recent headlines. Despite the current risk environment, many organizations are taking a silo approach to managing their international assignment programs. Such an approach is characterized by insufficient oversight and coordination of the disparate activities of functional groups that support the program, with each group playing its own unique and essential role in managing a piece of the program. Within any organization maintaining an international assignment program, the varied list of functional groups involved in carrying out the program include corporate tax, payroll, accounting, finance, legal, mobility, immigration, business entities scattered around the globe, as well as any external groups that have been hired to handle assignment-related responsibilities.

A

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Times like these call for your organization to manage its international assignment program—and the various functional groups behind the program—through a holistic, team approach. Strong connectivity between, and buy-in among, the functional groups is key to achieving a program that supports your organization’s overall philosophy, culture, and strategic objectives while effectively mitigating the risks of such a program.

A Holistic Program In a holistically-managed assignment program, a core team, typically consisting of HR and tax professionals but perhaps including people from other areas of the organization, is charged with overseeing the pro-

58 MOBILITY/FEBRUARY 2010

gram as well as coordinating and integrating the activities of functional groups. The core team fosters effective communication among program stakeholders; works to understand, appreciate, and address the limitations and needs of functional groups; and maintains a system of checks and balances to keep the program on the right path. Assignment-related issues that the core team and functional groups must help your organization address are numerous and intricate. Among other mandates, your organization must: • align assignment agreements with the corporate tax structure; • calculate withholding taxes in light of tax equalization or protection;

• establish proper accruals for tax liabilities; • minimize the risks of accidental expatriates, which can include noncompliance with immigration, withholding tax, social security, and other reporting requirements, damage to your organization’s business reputation, employee exposure to personal risk related to taxes or immigration; and inadvertent creation of permanent establishment and related corporate tax liabilities; • make decisions on the crosscharging of salary and benefit costs to the host location; • address international assignment costs and value in light of the shrinking supply of skilled and semi-skilled labor in emerging markets;


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• create and implement strong global talent management policies that balance costs with the need to provide employees with incentives and choice; • identify and develop future business leaders around the world; and • enable business leaders to become and remain fully aware of risks related to international assignments and help them make informed decisions about assignments with an eye toward minimizing these risks.

The Core Team By working with the core team, functional group staff can get help with addressing issues that typically take them beyond their primary

day-to-day responsibilities. Consider someone in accounting, for example. Handling international assignments might comprise only a small percentage of this person’s everyday job description, so he or she most likely will benefit significantly from the assistance of core team members for whom international assignments are a primary focus. Core team members do not necessarily need to possess a profound command of all areas of assignmentrelated responsibilities and risk; typically, most of the necessary competencies are to be housed in the functional groups. Core team members do, however, need to have enough knowledge to feel confident that all responsibilities are being carried out

properly and on a timely basis and that risks are being addressed appropriately. Globalization shows no signs of stopping. As the global business environment continues to grow more complex and fraught with risk, the need for a holistic, team approach to managing an international assignment program, with effective communication and cohesiveness as guiding principles, becomes increasingly clear. The views expressed herein are those of the author and do not necessarily reflect the views of Ernst & Young LLP. Wes Okumura is Americas head of human capital for Ernst & Young LLP, New York, NY. He can be reached at +1 212 773 5404 or e-mail wes.okumura@ey.com.

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cluding enges in ll a h c y an ns, l concer t faces m s ia li c n ia a c n e fi p ls some llenging appraisa ets, cha ce from k n e r a a t n c o m h lu e p e e he tentativ s, and r e despit e over t ventorie t a mov p in the voic d e c g e . c in a m m d a a a w o c e st … nd de l dr billo ck ntives, a d familie peacefu lo e n , c a ’c p e o s in e e e e e d e r m hr om a transfe ns, inco y, “it’s t ke me fr romotio d sleepil p le , s g that awo r d r u a g days of rew hief,” I the early e ly W d . n t “But, C . n e fo a t re prestig ll rather ents we is impor orning.” to f us reca assignm but this d o e , e y ms y h e r t in the m n n r a n fo o e s e M , the r le. W n wh n now, d k o io n t a I m a e h , c h m h t o lo a o t u e re “Ye ere iently to ity was c e for yo executiv arkets w and effic d mobil r m , ecial cas a p e ly s w t h t p a ie u u e f, v l, ie in ha ickly, q rm… life plentifu erally br needed r guy qu s the no partbut gen a t that’s e e w d h t s s a ie r a — r e o a d move ou v p n e ift do cor it crunc ere ays and nd cred He’s a g nt for a im w a d e . h t l s 0 m h ia a 9 n c it E n ig — w r s a lo n Fa re us l as dynamic for the fi endezvo nyone?) n specia r t a o p o y e e t c r c is n o x u d p o E le y d. Singa equiva reful, be ged for -up pur was goo 0s, (cash w. Be ca s a back ’7 ’ve arran o a r e r r 2 d e o W t e 7 r . v m t a r r o o e e s n after t of the C rbed by you’ve g luations ght day ere abso .” raisal va w e t hurry… p v t u p o a b a h at first li , m t n e t s n tim catio portan ropertie e vetera ke your is is an im ice for p ays whil r h d t p creet, ta , 0 day e r 2 s e n a 1 g e h c o sev , Flag 90 to t d e n in v A s fi t . e s d r k e ar hou the desir most m ” ily met s a e ariance. s “Chief… r .” t e o n prais erce v r…” at I d p p e a h g 5 w g o la t ’s t F a 4 ih e and “Yeah, tion env tant… t turn-tim e reloca ll impor a iv t e u ’r c y e e x e “Th location ultuous re the re y’s tum a fo d e o b t r n e I than ev t, more ronmen

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This brief monograph is designed to serve as a reminder that those days are long past and we as seasoned relocation appraisal specialists must adapt to the changing markets and the moods of our transferees. We must pursue our analytical studies with more diligence, we must carry ourselves more upright as professionals and, most of all, interact with our homeowners with greater sensitivity. When the coast-to-coast run up in residential property prices began to flatten prior to collapsing in many markets beginning in 2007, we were introduced to new terminology that included: “as is” versus “as vacant;” “cost to cure;” “anticipated sales price” versus “market value;” “market change” adjustment; and “forecasting” (additional incentive to buy). Beyond the call for the inclusion of additional comparables, relocation appraisers have been encouraged to include sales proffered by the transferees plus additional competing properties, including “new construction within 10 miles” of the subject. Furthermore, the importance of analyzing competition has expanded to include a market-based “list price to sales price ratio” and the imposition of adjustments to the competing properties in the same manner as that applied to the sold properties. Those halcyon days when three listings and three solds made a complete Worldwide ERC® Appraisal Report 62 MOBILITY/FEBRUARY 2010

are gone and today’s report that has 10 to 12 properties is the rule rather than the exception. In reaction to the financial chaos that erupted in the fall 2008, leaders in the mortgage loan universe experimented with ways to require appraisers to examine, explain, support, and justify their opinions of market value for lending cases. Even before any federal guidelines were put in place, many relocation appraisal professionals already had been including their own versions of the “market area analysis” with graphic statistical overlays that explained and foreshadowed changing markets over a period of years. These spreadsheets provided a solid context for “market change” and/or “forecasting” adjustments in view of the scope of work that culminated in a reasonably defensible anticipated sales price. Those on the cutting edge were adapting seasonal trends in many parts of the country where time-of-year was a precursor to “days-on-market” issues. Here are some ideas that all of us should consider: If you are new in the business, consult Worldwide ERC® and follow the steps for CRP® certification, and visit RAC.net to learn cutting-edge tools in developing and understanding changing markets. If you are a veteran appraiser, be open to adapting to change and be willing to learn new refinements to old techniques. Relocation appraisal specialists constantly are reminded that we often represent the one and only face-to-face contact between the transferee and their relocation program. Our appearance and demeanor are critical to the trust one places in the relocation program. Clearly, the appearance of any appraiser in cutoffs, T-shirts, and flip-flops is not

The impression we leave with our clients and homeowners is an extension of how we view ourselves and our profession. As a novice attending my first chapter meeting long ago I was less than impressed by the veteran appraisers who discussed “jobs” meaning assignments and “shops” meaning their offices.

what the client had in mind. How much confidence would you place in an appraiser who came to your home in jeans, a sweatshirt, and in a hurry when the report he or she produces can have a major impact on the probability of selling your home, the success of your career, and the enjoyment of your life as you know it? Our deportment and appearance speak to the entire relocation experience. As much as you may find it hard to believe, there have been many cases when appraisers appeared at the transferee’s door in fashion ensembles well below standards known in the business world as “casual Friday.” In one instance, arriving in beach attire with the family in the car, the appraiser explained to the transferee: “we’re heading to the beach and your house was on the way.” Another appraiser set an appointment during the week of his high school class reunion and brought along an old “bud.” While the appraiser was viewing the transferee’s property, his pal was enjoying a brown-bag-cocktail in the car and


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after waiting a considerable length of time… ah, use your imagination! Recently, an East Coast practitioner with an appointment to view a transferee’s house arrived at the appointed time but failed to announce his arrival at the front door. By coincidence, the lady of the house opened the door to the garage wherein stood our clipboard brother in T-shirt and jeans. Surprise! We set the tone for the entire stressful, often-painful, anxiety-filled process of relocation. We must always look professional, clean, commanding, and purposeful. This demeanor likely would omit the efficacy of a sweatshirt, designer label or not. No jeans, T-shirts, flip-flops— not now, not ever. Certainly, dress for the climate, have boots or, as they say, “footy-up.” In certain cultures, you are expected to leave your shoes outside or at least inside the front door. Get used to it; it is their house and you are a guest. Respect it. On some occasions, you would be advised not to address the spouse. It is inappropriate and impolite in certain cultures to address anyone other than the gentleman head of household. We would all be wise to learn a few greetings in foreign tongues in this truly global marketplace. The impression we leave with our clients and homeowners is an extension of how we view ourselves and our profession. As a novice attending my first chapter meeting long ago, I was less than impressed by the veteran appraisers who discussed “jobs” meaning assignments and “shops” meaning their offices. Appraising no longer a is cottage industry performed by part-timers who work out of dingy basements or from the cluttered kitchen table. Students of the appraisal profession

are advised to get out of the “basement mentality” because what you wear at home is not the attire for a property visit. Perhaps seek affordable office space; think in terms of handling “cases” or “assignments” rather than jobs. You appraise “homes,” not just houses; you are part of an “appraisal firm” no matter how small, not a “shop.” Modifying our views of ourselves as relocation professionals is the first step in creating an improved image that others surely will notice. While navigating today’s troubled waters of relocation, the mobility professional must practice a degree of empathic objectivity: taking time to know and understand the pressures facing the transferee—and their family—while

maintaining the objectivity needed to develop realistic valuations. Here is a sampling of situations the mobility professional may face that require a greater degree of sensitivity. The first move. In his first job after college, the young transferee is sitting in his first house when you arrive. Fearing perhaps for the first time a move away from home and family, the young transferee deserves the extra time spent to explain this process and how it will unfold. Present ideas on how they may prepare themselves for the next purchase. Refer them to a list of appraisers in the destination city. Non-traditional family. We are visiting with greater frequency nontraditional families; singles sharing a

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home. There are special anxieties here that your transferee has not faced before. Consider the stresses placed on the transferee by not knowing if the partner is able to move or change jobs as easily (Read “Family Issues: Developing Policy Flexibility to Meet Family Needs,” by Elizabeth D. Nunan, CRP, GMS, and Susan Vittorio, CRP, PHR, in the September 2009 issue of MOBILITY.). Illness. Be extremely sensitive when dealing with relocating families while a family member or domestic partner is dealing with severe illness. Be willing to take extra care and concern while in the home by explaining your role in the process. Extended families. Now more than ever, the term “trailing spouse” may include “trailing children.” This is not meant to imply that the relocation program is charged with finding jobs or moving adult children. Please be aware, however, that there are many cases when married children have returned “home” with their families, often jobless, and the transferee has considerably more anxiety associated with this move. Aging parents on one side, adult children on the other, place über-anxieties on these relocating “tweeners” more than ever before. No, you are not expected to help the situation or do anything about it, but you can empathize while in the presence of the family, and respect the shared space that may be occupied by this extended family. 64 MOBILITY/FEBRUARY 2010

Empty nesters. No children, no pets, empty nesters may be making their last move home where it all started or to the “home office” facing retirement. Having been moved many times, this couple may seem to take the relocation process quite casually. Do not drop your guard or treat this case with any lesser degree of care and concern than any others. There is melancholy at work here… it may signal the “end of the trail”—not altogether a happy yellow-brick road. Single parents. Transferees may have no one closer than the HR or third-party company professionals with whom to discuss the relocation process. You are it. You are the sounding board, so sit down and listen. These are just a few of so many non-traditional cases we may face today. Be cognizant of moods. Many of us are well trained in understanding the mood of the market; all of us need preparation in reading the mood of the household. We can make this entire stressful process more pleasant by explaining what we do and how we do it. First, do not load up your schedule with six relocation properties in a day. Act like this one home is the sole focus of the day. Begin the visit by asking the homeowners to guide you through their home. Then, go through a second time taking notes, inputting your sketch, and taking your photos. On returning to a comfortable setting, discuss with the homeowners issues of personal property that will remain; ask for their input about home improvements and special features. Ask the homeowners, “out of all the homes they may have seen during their visit to this community, what influenced their decision to live

Appraisers must be mindful of the image they project by appearances, while conducting themselves as patient professionals in showing empathy, sensitivity, and maintaining a strict sense of objectivity in each and every case.

in this community, this setting, this home.” You will be amazed to learn how many have been asked that question. Finally, ask for their input regarding area properties that they feel are significant to the valuation of their home. Author, Peter T. Kilborn, in his new book, “Next Stop, Reloville: Living Inside America’s New Rootless Professional Class,” addresses many transferee-related dilemmas of which we would know very little, as our contact with the transferee and family may last but a comparative moment. Today’s relocation appraisal specialist not only faces the difficult task of developing reports in challenging markets using new methods and terminology, but also faces relocating families operating under heightened anxieties. Some are caused by the market downturns while others are related to changing lifestyles. Appraisers must be mindful of the image they project by appearances, while conducting themselves as patient professionals in showing empathy, sensitivity, and maintaining a strict sense of objectivity in each and every case. Charlie Flagg, SRA, a member of RAC, is a relocation appraisal specialist from Hudson, OH. He can be reached at +1 800 760 9010 or e-mail charlie@cwflagg.com.


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Cost management and reduction are key initiatives among mobility professionals today, and John offers tips for trimming one of the largest expenses in the mobility process—the homesale.

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Minimizing Direct Homeselling Costs B Y S T E V E N J O H N , C R P, G M S

B

usiness is down for most of the U.S. economy and, as a result, the pressure to deliver cost savings is up. When the heat is on, it is critical that management’s efforts are focused properly but, with so many elements in the average mobility program, the question is, “where to start?” For U.S. domestic mobility programs, direct homeselling costs often are the largest components of total mobility spending with some programs spending more than 40 percent of total costs on this component. With such a large part of program costs concentrated in one area, efforts to reduce direct homeselling costs can have a dramatic effect on the bottom line. Short of having a buyer value option (BVO) only program, there are two primary ways to minimize total weighted direct homeselling costs: • improve the amended value (AV) sales rate; or • minimize days on market for inventory properties. Following are the costs associated with selling a home: acquisition costs: costs associated with the passing of beneficial ownership from an employee to the purchaser; carrying costs: recurring costs and extraordinary charges of holding a property in inventory. This could include insurance, utilities, mortgage interest, taxes, homeowner association dues, assessments, repairs, and capital improvements. All costs of holding and operating a property during the inventory or marketing period should be charged to this category; disposition/selling costs: costs associated with the marketing of property. Included in this section are real estate commissions and monetary concessions and incentives, and includes closing costs and loss on sale; and cost of funds: in addition to mortgage interest, costs are incurred for funds invested for equity payments and homes held in inventory. These costs accumulate as days on market increase. MOBILITY/FEBRUARY 2010 67


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In looking at opportunities for savings, policy components and management efforts that improve the AV sales rate are the most effective way to keep total weighted direct homeselling costs in check. Improving AV Rates An amended value (AV) sale is defined as a sale in which the appraised value offer to an employee is amended by the purchaser based on receipt of a bona fide offer from a third-party. The purchaser executes a contract of sale with the employee at the amended value and then enters into a contract with the third-party buyer for the same amount. Essentially, it is a sale made to a thirdparty simultaneous to executing a guaranteed buy out. Such sales avoid costly carrying costs and loss on sale. AV rate is the number of properties that are acquired as an AV transaction divided into the total number of acquisitions for the same time period. In looking at opportunities for savings, policy components and management efforts that improve the AV sales rate are the most effective way to keep total weighted direct homeselling costs in check. Assuming an average acquisition value of

$300,000, AV sales save approximately $45,000 per property or $4.5 million on a 100 homesale program. With such substantial savings available, improving AV rates should be the primary weapon in the cost savings arsenal. There are a variety of policy provisions that can be implemented to help ensure the very best AV rates, especially in a weak real estate market. In many real estate markets today, absorption rates can run 20 months or higher. However, in all markets, some homes sell every month. The key is to help ensure that relocation properties are the ones that sell. Many of these policy elements cost nothing to the employer and should be considered as best practices for driving a cost-efficient program: Allow sufficient marketing time. While it is important to get employees to their new location as quickly as possible, sufficient marketing time

Weighted DHSC Improvement Resulting from AV Rate Improvement $8,000,000

25.0%

$7,000,000 20.0%

$6,000,000 $5,000,000

15.0%

$4,000,000 10.0%

$3,000,000 $2,000,000

5.0%

$1,000,000 0.0%

$0 AV RATE Total DHSC Weighted DHSC%

10% $7,050 23.5%

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20% 30% 40% $6,600 $6,150, $5,700 22.0% 20.5% 19.0%

50% $5,250 17.5%

60% $4,800 16.0%

70% $4,350 14.5%

80% $3,900 13.0%

90% $3,450 11.5%

should be mandated in the mobility policy. This will allow a professional real estate sales associate sufficient time to market the property and negotiate offers. Programs with short marketing periods or that execute guaranteed buy outs quickly incur significantly higher costs than those programs that allow for a reasonable amount of time to affect an AV sale. Marketing periods generally should run 60 to 90 days. Discourage or prohibit the use of employee choice brokers. Without a doubt, relocation sales are more complicated than other residential real estate sales. Because specific expertise is required, the mobility policy should help to ensure that employees get the best help in selling their home. This means working with a professional mobility services provider associated with a well managed real estate network. Real estate sales professionals within the network should be managed by a professional relocation director, receive specific relocation-oriented training, and have minimum experience requirements. Experience shows that for relocation homesales, professionally managed and trained sales professionals close quicker, have less fall outs, and drive higher AV rates. Price it right! One of the age-old maxims in real estate is that all properties can sell in any market if offered at the right price. For transferring employees, this is especially important given the limited marketing time available. This is another area where working with the right real estate


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If pricing it right is the first rule of real estate, condition has to be the second. In a market with large numbers of properties to choose from, buyers can be selective.

sales professional can help. The first step in helping the employee to understand the best listing price is the listing conversation with the agent and the presentation of Worldwide ERC® Broker’s Market Analysis and Strategy Report (BMA). This analysis will show the employee the closed and listed competing properties in their area. The analysis also includes the suggested list price (SLP) and the most likely sales price. Employees who list at amounts significantly higher than the SLP hurt their chances of achieving an AV sale and drive up mobility program costs. Obtaining a high-quality BMA is another reason to require the use of a real estate sales professional who is trained in the mobility process. In addition, most employer mobility policies now require listing caps. Employees who receive benefits under the program are required to list their properties at a maximum value versus the SLP amount from the BMA. A common listing cap is 103 percent to 105 percent. Assuming that a high-quality BMA was performed, and the employee lists at no higher than 105 percent of the SLP, an AV sale is much more likely. Another common listing cap is triggered after the appraised value offer is presented. Such a cap will require the employee to revise the listing price to a percentage (105 percent) of the appraised value offer amount. This

helps to ensure that the list price is reasonable versus the offer value. The presentation of the appraised value offer can be a strong wake-up call to an employee who has listed too high. Provide employees with a repairs and improvements (R&I) allowance. If pricing it right is the first rule of real estate, condition has to be the second. In a market with large numbers of properties to choose from, buyers can be selec-

tive. Properties with low curb appeal, outdated features, deferred maintenance, or nontraditional decorating schemes are low on the list in the minds of prospective buyers. Most of these items are considered cosmetic and will not be called out in an inspection; however, they can have a huge impact on a buyer’s decision to make an offer. Why make an offer on a home with outdated appliances and countertops if the same home is for sale down the street with a fully

refurbished kitchen? The homes that sell quickly in today’s markets are the homes that show well. Allowing a few thousand dollars for general clean-up or refurbishment can go a long way in helping to ensure that properties that go through the mobility program are attractive to buyers in comparison to other homes in the area. R&I allowances also can be used for staging. These allowances generally are granted only as reimbursement for actual expenses and limited to 1 percent to 2 percent of the value of the home. For best effect, the policy should require that all R&I be accomplished within the first 30 days of listing. R&I allowances have an added advantage in that the property already is in good shape should it go to inventory. Provide employees with incentives to accept AV offers. With the understanding that direct homeselling costs for inventory homes average 15 percentage points higher than AV homes, paying the employee a bonus to drive AV sales makes a lot of sense. AV incentives generally run 1 percent to 2 percent of the sales price, but some companies have gone as high as 5 percent. Typically, these bonuses are not grossed-up for tax assistance. AV incentives also may be tiered to pay higher percentages in the first half of the marketing period to further encourage quick sales. The AV incentive helps to ensure that the employMOBILITY/FEBRUARY 2010 69


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It takes a team of experts to help ensure costs are minimized and that even the most basic employee transfer goes smooth. For these reasons Worldwide ERC® and professional mobility service providers exist. ee is engaged and working with the real estate sales professional to get the home sold. Provide an allowance to cover the gap on AV offers below the appraised value offer amount. In some cases, AV offers are received that are reasonable, but below what the employee is offered as part of the guaranteed buy out. From a weighted direct homeselling costs perspective, it is advantageous to accept these offers to prevent the property from going into inventory. An allowance can be offered to employees to make up the difference between an AV offer and a higher appraised value offer. This will incent the employee to consider and accept offers that are reasonable, but not quite equal to the appraised value offer. Remember, any AV sale in today’s market that is within 15 points of the appraised value offer amount is worth taking because, on average, the extra 15 points will be incurred anyway once the property goes to inventory.

Minimizing Inventory Days on Market Despite the best policy and efforts of the professionals involved, some homes do not get sold during the marketing period. These become inventory homes and direct homeselling costs begin to increase dramatically. In the case of inventory homes, the key is to minimize days on market (DOM) and, as a result, minimize carry costs and loss on sale. Minimize days on market to reduce carrying costs. According to 70 MOBILITY/FEBRUARY 2010

“Tough Markets, Top Resources,” in the August 2009 Around the Worldwide ERC® department of MOBILITY, a good “rule-of-thumb is that an inventory home costs about 1.5 percent of its purchase price for every month it remains unsold.” For a $300,000 home, this equates to $4,500 per month. Some of the strategies to minimize days on market for inventory are the same as those with AV sales. Price it right. If the transferee was not able to sell during the marketing period, it usually is a good indication that the list price was too high. Prior to moving the property to inventory, request a new BMA and reevaluate the list price history. If the home was not previously marketed through a broker with a professional mobility department, now is the time to obtain the additional expertise and focus that such a broker can provide. Real estate market analytics and valuation tools can be a big help in understanding the pricing required to achieve a sale within 90 to 120 days. The acquisition price, determined by the average of the appraisals, is not the starting point to determine the new listing price. It is critical to perform a new, independent analysis and not get married to the acquisition value. Authorize required repairs and improvements. As with AV sales, proper condition for the property is vital to a quick sale. Any R&I not executed during the marketing period should be authorized and accomplished within the first 30 days of

the inventory listing. Authorize and estimate these items two weeks prior to inventory acquisition so that contractors can start work as soon as possible. Most R&I can be accomplished for just an additional point or two on direct homeselling costs, but can save months of carry costs. Using the previously listed Worldwide ERC® rule of thumb, a twomonth reduction in DOM will pay for 3 percent of R&I. Staging also can be used to enhance the presentation of a home and prevent additional days on market. Be prepared to accept loss on sale. In today’s market, it is unreasonable to expect that inventory homes will sell at or above the acquisition price. Unfortunately, it is too easy to fall into the same trap as our employees, which is listing the home based on its cost. The appraised value offer process is a mechanism to determine a fair value buy-out amount for the transferring employee. It is not meant to serve as a suggested resale value. Be prepared to accept loss on sale. It is important to take advantage of reasonable offers presented to get homes sold. The alternative is to hold onto properties far too long, hoping that a buyer will make a full list offer. Such a practice typically results in high carry costs with ultimately the same or worse loss-on-sale experience. One barrier to minimize DOM is the fact that many program administrators lack the authority to approve reasonable loss-on-sale amounts. List price reductions and loss on sale


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must instead be brought to a highlevel executive for approval. Authority to carry properties in inventory can incur costs much more quickly than authority to approve loss on sale, R&I, or other necessary expenditures. For best results, the mobility services provider should be given the authority to accept offers and make list price reductions within certain limits, without having to request approval each time. This will help to ensure the lowest average DOM for the portfolio. Negotiate closing days. Many people stop calculating DOM once the sales contract has been signed. However, from a carrying costs perspective, costs continue to accumulate until the sale closes and proceeds are received. A sale with a 60-day

closing period will incur an additional 30 days of carry costs than the sale negotiated to close in 30 days. Do not be afraid to negotiate the closing period. Concessions given on price or buyer’s incentives often can be partially recouped by asking for a quick closing in exchange. While this is not always possible in today’s environment of short sales and tough credit, it never hurts to ask and can add up quickly across the entire program.

Consult an Expert These are just some of the ways to save money in a mobility program. The mobility process is not easy or cheap. It is full of complexity, long cycle times, and unexpected challenges. It takes a team of experts to help ensure costs are minimized and

that even the most basic employee transfer goes smooth. For these reasons Worldwide ERC® and professional mobility service providers exist. With so much at stake, it is critical to engage the right experts to guide the administration of your mobility program. Once the right team is chosen, it is important to listen to their recommendations. Too often, we fail to heed the advice we are given. The professional mobility industry has been around for a long time and has developed significant expertise in all areas. Listen to the experts; no other advice will serve as well in minimizing direct homeselling costs. Steven John, CRP, GMS, is executive vice president, client services, Prudential Real Estate and Relocation Services, Inc., Scottsdale, AZ. He can be reached at +1 480 778 6800 or e-mail steven.john@prudential.com.

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What Veterans Advise New Professionals B Y S T E F A N I E R . S C H R E C K , C R P, G M S

There is a wealth of resources available to those new to the mobility industry. In addition to magazine articles, conference presentations, the Worldwide ERC® mentor program, and the like, there also is the cumulative experience of veterans in the industry. Schreck asks them for guidance relevant to new mobility professionals.

W

orldwide ERC® recognizes that new professionals may not have the resources available (or know that they do) to fully understand the ins and outs of the mobility industry. The association has an ongoing mentor program, assigning new professionals who request a mentor to a volunteer seasoned professional, where new professionals are encouraged to ask questions to deepen their knowledge of the mobility process. As an introduction into the world of mobility, veterans in the industry offer their advice for success to new professionals.

Homesale According to Mark Gronke, CRP, vice president, national business development Fidelity Residential Solutions, Florham Park, NJ, “the current market condition promotes a learning environment that strong real estate markets do not. Skills of negotiation, transactional knowledge, and subject matter expertise are ripe for development. It is a counterintuitive thought; this is the best time to get into the industry. Educational opportunities abound. 72 MOBILITY/FEBRUARY 2010


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“New professionals could benefit greatly with a knowledge base on several key components of the relocation/real estate transaction,” he said. “We recommend that new professionals become students of property ownership types. This information will be especially useful, given the special requirements of coop title transfers and the volume of short sales in the marketplace. Also, know that lenders are more meticulous in understanding all of the entities in a relocation transaction, which may contribute to delays from time to time. “When utilizing a property assessment for guaranteed buy-out files, it is also critically important that there be a clear understanding regarding the scope and client expectations of the form and market limitations.” Cori Beaudet, SCRP, GMS, human resources—global relocation resources, SC Johnson—A Family Company, Racine, WI, further advises to, “never be afraid to be creative in home marketing.” The more unusual the price, the listing information on MLS, or the incentives paid at closing, the more likely a potential buyer will remember your employee’s home over another one on the market. The sale of an employee’s home is arguably the most stressful aspect of the relocation, for which all service providers benefit in understanding the challenges that face the employee, as well as how the subsequent services can be affected by a delay in the sale.

Rental Assistance Gerri Vukin, senior corporate account manager, Coldwell Banker, Parsippany, NJ, advises, “a new relocation specialist needs to know the process of assisting renters. Rental 74 MOBILITY/FEBRUARY 2010

housing can be apartments, such as efficiency/studio, one-, two, or three-bedroom units. They can be found in garden-style complexes, or in high- or mid-rise buildings. Other rental properties include single-family homes, duplexes, townhouses, and condominiums. Further, relocation specialists need to know the company policy—for example, are rental tours or finder fee commissions covered and for what amount?—and they also need to know how to complete the needs assessment. “Renters need, on average, onethird of their take-home pay for consideration of car loans and other monthly obligations and, therefore, relocation specialists need to counsel renters on the costs involved with the rental, including, but not limited to: • application fees range from $25 to $150 and are a standard practice for almost every property; • credit check will be done and usually cost up to $25; • security deposit is required at lease signing and is typically equal to one month’s rent; • first month’s rent is due at lease signing; and • pet fees can apply and are usually a monthly surcharge and/or a pet deposit. “Once the real estate broker completes a needs assessment, the employee is assigned to an agent who is

knowledgeable about rentals and can assist with lease negotiations. The relocation specialist needs to inform the renter to bring a letter of employment, verification of income (a recent pay stub), picture identification (driver’s license or a passport), and a checkbook to cover first month’s rent and security deposit. “An international transferee (i.e., any person other than a U.S. citizen, also known as a ‘foreign national’ or ‘expatriate’) relocating to the U.S. faces additional challenges when trying to secure a rental home. The employee needs to follow these steps to secure a rental home in the U.S.: • apply for a social security card; • open a bank account; and • obtain an employment verification letter (without a Social Security Number and U.S. credit history it is usually needed for the landlord), which typically includes position and number of years with the company, base salary, total compensation, salary in new location, and any allowances the employee is receiving through the relocation.” Last, Vukin suggests that renters add the following addendum, a diplomatic clause, to the lease—especially for two-year leases—in case the employee is relocated prior to the termination of the lease: in the event the tenant is required to move to another area as a condition of employment, the tenant may terminate this lease on 60 day written notice to the landlord accompanied by a letter from the tenant’s employer evidencing such a transfer. “A relocation specialist needs to know that service to a renter is as important as a top management transferee. Their housing needs are unique and require expert service by their relocation specialist,” she said.


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Household Goods Shipments Michael Boone, president of Lytle’s Transfer & Storage, Tipton, PA, says, “from the movers’ perspective, the best advice I could give someone entering into relocation on the corporate side is to actually visit a job site. Understanding the different types of services, trucks, material, and crews is very beneficial. It is a huge disadvantage to attempt to counsel transferees (who, in many cases, have moved professionally many times) if you have not done so yourself. A clear understanding of what is and isn’t normal allows you to head off any potential problems early in the moving process. It also makes it much easier to make decisions on cost-containment issues such as third-party services.” Ed Barwick, CRP, director of business development for Budd Van Lines, Somerset, NJ, suggests that knowledge of the basic shipment procedures would help new relocation coordinators, including: • how a surveyor prepares a cost estimate; • how the estimate helps the moving company in preparing for the move; • how the move is planned and scheduled with a driver; • the importance of the paperwork that is signed at origin and destination; • how the invoices are prepared and what backup is required; • what is replacement value protection?; • what is the typical claim process?; • not all movers are the same— there are major differences between traditional van lines and independent carriers, and not all carriers specialize in corporate employee relocations; • A brief overview of the most prevalent tariffs;

• because issues do occur, a well defined recovery process is vital; • benchmark with other mobility professionals for direction to the most trustworthy and accountable partners; • carriers should be tested, evaluated, and willing to earn their opportunities; • develop clear expectations, key performance indicators, and service level agreements; • consider performance-based pricing; • visit a carrier’s storage facility and office location, and spend time with the move coordinators; and • visit a few moves in progress to experience “move day,” and meet the driver and crew face-to-face. Barwick recommends that thirdparty or corporate relocation coordinators also know the following information when coordinating a shipment with the moving company: • the more information you can share about your client’s household goods policy, the better, especially anything unique about the client; • clearly state your communication and response expectations, especially requests for exceptions; • let the moving company know if a move is capped or requires multiple bids; • if anything in the mobility plan changes that could effect the established move dates, please let the moving company know as soon as you know; and • notify the mover of any “red flags,” i.e., any statements or feelings of uncertainty exhibited by a transferring employee.

Mortgage Lending Matt Canfield, CRP, vice president of Premia Relocation Mortgage, MOBILITY/FEBRUARY 2010 75


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Sparta, NJ, advises new professionals “to keep up-to-date with the numerous changes in mortgage lending. Not only do these changes affect your transferees’ home purchases, but they also may affect the mortgages buyers are trying to secure in order to purchase the homes your employees are selling. Topics currently in the news include RESPA reform, the expanded version of the tax credit, foreclosures and mortgage delinquencies (especially in markets such as Las Vegas, NV; Phoenix, AZ; Detroit, MI; Florida, and California), and lenders’ inability to use the assumed income for an accompanying spouse for mortgage qualification. Interest rates and home price trends are also noteworthy, as they may affect your transferee’s ability to secure a home in the destination location.”

work, interact and, if necessary, battle with their procurement office. It is apparent to those of us in the moving industry that procurement is a large part of the selection process when choosing suppliers for the household goods moving of their employees. The RFI and RFP process requires a tremendous amount of time due to the breadth of questions and information that is included in the process. Using the same strategy when purchasing a commodity cannot be effectively applied to the relocation process. It will not lead to a cost-effective relocation program, and it will impact the experience of the relocating employee. Relocation and procurement professionals can work together, otherwise the relocation professional will be stuck with a relocation policy that is impossible to implement.”

Procurement

General Advice

Advice that Jack Cotter, vice president of business development for New World Van Lines, Bethlehem, NH, offers to new professionals entering relocation is to “be prepared to

Art Nadolske, president of Summit Mobility, Salida, CO, says, “I’ve been in the relocation business for 27 years; I worked for a few small companies and one of the biggest

76 MOBILITY/FEBRUARY 2010

ones. [Worldwide] ERC® conferences have really changed: back in the day, the spring conference was attended by third-party relocation companies, brokers, appraisers, and corporate members. The fall conference was just third-party relocation companies and corporations. When I started, there were different colored badges for corporate clients, brokers, and appraisers, so corporations were easy to target from a marketing standpoint. The atmosphere was different then it is now—no Blackberries, laptops, etc. It was easier to network because you might have met prospects while socializing at conference events. “My advice in today’s environment is to find a mentor. Regardless if you’re a new relocation director, appraiser, agent, get to know someone in the industry that can introduce you to other people. Contact your company’s supplier services manager and see who they may be able to send you to for an introduction into services.” Beaudet suggests, “counselors on the corporate side that are very new to


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relocation would learn a lot by doing mock role play with their service providers (i.e., pretend they are the transferring employee so they can learn first-hand about the moving process).” Wendy K. Moore, CRP, marketing director of Wells Fargo Home Mortgage, Newtown, CT, says, “corporate professionals entering the industry should be encouraged to take advantage of all the educational resources available. That includes [Worldwide] ERC®, regional relocation conferences, networking opportunities with more tenured corporate professionals, and also the service providers at their disposal. Speaking for the mortgage industry, we can help to educate those new to the industry about relocation mortgage basics, and in this economic environment, we can be an invaluable resource for navigating the many legislative and credit policy changes impacting the industry.” Kevin E. Rich, SCRP, CMC, vice president of global business for New World Van Lines, Inc., Chicago, IL, offers the following suggestions that apply to anyone starting a mobility career: • be a life-long learner. Seek continuous opportunities to develop personally and professionally; • join industry trade groups and seek to contribute as a volunteer from the beginning; • aim to become the president of one of those organizations; and • join a local area “breakfast club” for professionals to expand knowledge and network of contacts. Scott P. Naylor, vice president of New World Van Lines of NJ, Cranbury, NJ, says, “the two best pieces of advice I can offer to a new professional is really learn the business, and that nothing comes without a com-

mitment to be successful. Both of these suggestions require effort and long-term commitments. One of the ways this is accomplished is to find people you can learn from. Always surround yourself with people more knowledgeable than yourself. “I go back to when I started in the industry; I always found people with more experience than myself that I could talk to and go out to do calls with. I could then see how they handled situations. I asked questions to people in my own company as well as to my competitors. I went to competitors’ offices to meet the owners and talk to them about the business and why they were successful. I read trade magazines to find out what was happening in the industry, clipping the best ideas and putting them into a folder to be used at a time when it was appropriate. I sought out the ‘heroes’ of the industry and asked them what it was that made them successful; then I tested out these new-found pearls of wisdom and put the best suggestions into practice. I worked long hours when I started and read books that helped me grow from a business perspective as well as from a personal perspective. I had a lot of fun along the way and I met some great people.” Understanding how all aspects of mobility can affect transferring employees and their families strengthens your knowledge of each step of the move, from homesale to destinations services, household goods shipments, and all pieces in between. Seasoned professionals are here to help and are easily accessible! Stefanie R. Schreck, CRP, GMS, is manager, corporate relocation for American International Group, Inc., New York, NY, and a member of the MOBILITY Editorial Advisory Committee. She can be reached at +1 212 770 8094 or e-mail stefanie.schreck@aig.com. MOBILITY/FEBRUARY 2010 77


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SPECIAL ADVERTISEMENT

Experts’ Outlook Hopeful for Developing Economies New statistics show that emerging markets are rebounding much faster than advanced economies.

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recent report from financial experts shows that countries considered to be part of the global emerging markets commonly referred to as the BRIC (Brazil, Russia, India, and China), are pulling themselves out of the current economic crisis at a much faster rate than the advanced economies of the United States, United Kingdom, Eurozone, and Japan. Experts agree the global marketplace has been permanently altered by the current economic downturn that has opened a window for economic growth in these emerging BRIC markets. While change has occurred at home in the last year, economists are not as optimistic as they once were. No apparent job growth, restrained credit lending, and a slowly stabilizing housing market partnered with rising inflation costs and unemployment rates have left many looking for new cost saving measures on greener shores. One surprising outlook of the current crisis is that the United States has not been the primary catalyst for global recovery. Just as the U.S. Government took measures to avert further issues, so did their international counterparts begin stimulus programs to promote new industry and capital flow. With BRIC countries being the primary suppliers of raw materials and industrial production to the global market, capitalizing on opportunities available has launched them forward. While it is clear the pace of economic recovery will remain slow, countries like South Korea and parts of Latin America have already begun to post

significant gains from fiscal quarter to quarter. Still, economists believe the symbiotic nature of the global economies will lead to benefits for all. After all, if one nation no longer imports goods from others, both, not just the exporting nations, will all fall deeper into recession. AIReS has seen a slow-but-steady rise in relocation to the developing economy areas of the world in the last three years, with continued growth expected through 2010. One of our clients, a global diversified chemical company, has been steadily increasing relocations to China, with plans for a greater rise in volume in the coming months. Through our strategically placed offices, extensive partner network, and expertise in policy development and consulting services, AIReS remains poised to help you to decide the best relocation strategy for your company, and see that through with successful implementation and exceptional delivery.

AIReS Park West Two, 6th Floor 2000 Cliff Mine Road Pittsburgh, PA 15275 Tel: 1-800-245-1176 • Fax: 412-788-0245 E-mail: webmaster@aires.com www.aires.com


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SPECIAL ADVERTISEMENT

A Bank with Added Benefits Now your employees can get the services and benefits they need to achieve financial stability.

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n today’s difficult economic times, you want to work with a bank you know you can trust. When you partner with Chase, your relocating employees can count on the resources and stability of one of the nation’s leading lenders to help them get the mortgage they need. When your employees relocate, a new home is just the beginning. They often have to establish a financial relationship with an unfamiliar institution. With Chase, your employees get more than just a bank, they get a wide-range of services and benefits that will help them achieve financial stability. Chase mortgage customers can count on a dedicated team of mortgage professionals, a variety of loan options, competitive rates, one-on-one financial counseling, and much more, like first-time homebuyer programs. At Chase, we understand that many employees rely on their employer’s benefit programs for a variety of their financial and personal needs. That’s why it’s important for companies to work with providers – like Chase – that are committed to their employees’ success.

Chase checking customers can take advantage of exclusive auto, credit card and home equity offers including better rates, more rewards and bigger savings in addition to: • FREE Online Banking and Bill Pay • FREE Account Alerts sent by phone, e-mail or text* • FREE 24-hour online or telephone access to checking accounts • FREE Access to 15,000 Chase ATMS • FREE Mobile Banking* Plus, Chase recently introduced the 1% Mortgage Cash BackSM program, which can help employees who get a new Chase mortgage save even more. With all these benefits, it’s easy to see that your employees can count on Chase to provide the stability and the savings they need.

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An Exclusive Benefit For Your Employees 1% Mortgage Cash Back only from Chase, only for Chase Checking customers. SM

Relocating employees who get a new Chase mortgage can save more with a Chase Checking account! Either we’ll apply an annual 1% Cash Back award to their principal mortgage balance, or we’ll put the money directly into their checking account. To learn more about how Chase can help your employees, visit www.chase.com/relocation or contact: Deborah G. Holiday Senior Vice President, Corporate and Institutional Lending Programs 1-800-362-5332 deborah.g.holiday@chase.com

The patent pending 1% Mortgage Cash BackSM program is available in AZ, CA, CO, CT, GA, IL, KY, NJ, NY, NV, OH, OK, OR, TX, UT, WA, WV, WI. Also available in FL, ID, IN, LA, MI however certain geographic restrictions apply in these areas. Offer available on new Chase first mortgage purchase and refinance applications submitted on or after8/1/09. A cash back award based on 1% of one month's scheduled monthly principal and interest (P&I) payment of the new mortgage will be calculated and totaled over a 12-month period. The 1% cash back calculation applies to scheduled principal and interest payments only and does not apply to additional principal payments made by borrower, or to payments for escrowed items such as taxes and insurance. At discretion of borrower at enrollment, the sum will be awarded via direct deposit into a Chase checking account or applied to the outstanding principal balance on or about each anniversary date of the loan origination. A new or existing Chase or WaMu personal checking account is required, along with enrollment in Chase's automatic mortgage payment service where the mortgage payment will be automatically deducted from the Chase checking account. There is a $500 calendar year cap on the principal reduction and cash back amount, including any anniversary award payouts and accrued rewards on a Chase to Chase refinance paid out in the same calendar year. Visit us at chase.com/MortgageCashBack for full program details. The program may be discontinued at any time without notice. The 1% Mortgage Cash Back may result in taxable income to the borrower. We encourage the borrower to consult with a personal tax advisor. All home lending products are subject to credit and property approval. Rates, program terms and conditions are subject to change without notice. Not all products are available in all states or for all amounts. Other restrictions and limitations apply. Deposit products provided by JPMorgan Chase Bank, N.A. Member FDIC ©2010 JPMorgan Chase & Co. 8556 1109


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SPECIAL ADVERTISEMENT

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ounded in 1987, GMS offers proven methods to make relocation simple. GMS is passionate about service and remains one of the few relocation companies that offer freedom of choice among leading providers. GMS will partner with you to create a program that is collaboratively developed, cost-effective and competitive in today’s employee mobility market. Here are some of the main reasons to choose GMS: GMS Pre-Decision Tools – Pre-Decision Tools help identify potential issues and ensures proper expectations are set.

Specialists have a wealth of experience to meet the challenges of today’s market. No Hidden Costs – GMS does not mark up invoices associated with relocation and is transparent about all revenue streams. Premier Partner Program – GMS has a vast reach and offers complete worldwide services. Each P3 partner is evaluated and ranked on a regular basis. Proactive vs. Reactive Model –GMS leads transferees through every step to keep ahead of any challenges. This method has a proven impact on transferee satisfaction.

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RAC Report

Regional Market Summary: Detroit Metropolitan Market

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etroit! They call us the “poster child” for the downtrodden real estate market the rest of the country currently is experiencing. To say it is a rough market here is the understatement of the decade. Sure, other markets have had it pretty rough during the past two years, but I am not sure anyone could argue that they have suffered as much as or as long as we have. The last time we experienced stable prices was in 2005 and, since then, prices have literally taken a “nosedive.” Median sale prices have declined a whopping 55 percent since 2005. The graph on the right gives a clear picture of where we started and where we are at present. The analysis looks at sales of single-family homes in the three most populous counties in the state—Wayne, Oakland, and Macomb—which surround Detroit. However, it does not include Detroit, where prices dropped a crushing 88 percent since 2005. A more recent analysis of the entire Detroit area indicates an average annualized rate of decline of 30 percent. This rate was extracted from all segments of our market including Detroit; therefore, it should be understood that not all segments were affected in the same way. Some areas still saw dramatic declines, some stabilized, and others even saw an increase in price from one year ago. Our employment numbers are staggering. In 2000, the state had roughly 600,000 manufacturing jobs and more than half of those jobs were eliminated. As of October 2009, the unemployment rate in the Detroit Metropolitan area stood at 16.7 percent, up 78 percent from October 2008. This is the highest unemployment rate of any major metropolitan area in the country. Excluding housing priced at more than $1 million—which makes up only a small portion of our market now—inventory levels have dropped 84 MOBILITY/FEBRUARY 2010

STATISTICAL SNAPSHOT Today

Unemployment Months of Supply Annualized Sales Volume Annualized Average Sales Price Average Days on Market

One Year Ago

16.7% 8.4 39,310 $49,000 265

Change

9.4% 14.7 35,372 $70,000 255

78% -43% 110% -30% 4%

from 14.7 percent a year ago to 8.4 MARKET AT A GLANCE percent today. The major contributors we can thank for our current Economic Climate Poor “improved” situation are the banks, New Construction Low which liquidated a large number of foreclosures in the early spring and REO Activity High summer of this year, the $8,000 fedSupply Down eral tax credit for first-time homebuyers, and historically low interest Demand Low rates. The decline in inventory levels Down is an encouraging trend; however, let Market Direction us not forget that prices dropped 55 Market Mood Poor percent from 2005, so we still have a long way to go. Other encouraging METROPOLITAN DETROIT ANNUALIZED SINGLE-FAMILY news is that our forecloHOME PRICE CHANGES $200,000 sure rate dropped this 180,000 year. Though this is not something we should 160,000 get too excited about; 140,000 rates are still at record 120,000 highs compared to the 100,000 rest of the country. 80,000 Michigan ranks 8th in 60,000 the nation. 2004

2005

2006

2007

2008

2009

Looking Forward Newspaper headlines tell us that the worst may be behind us. That is great news but we have such a deep hole to dig ourselves out of that it could be a while before they can honestly say things are looking good in Metro Detroit. The employment picture is bleak. Without adding jobs or without government-sponsored programs such as tax incentives for homebuyers, mortgage modification programs, extended unemployment benefits, and low interest rates, market stagnation could occur or, worse, prices could continue to drop and

inventory levels could return to higher levels. Before writing this article, I knew I wanted to end on a positive note. So I asked one of my colleagues if he had any thoughts. His response was “at least we didn't get hit by a comet in 2009.” “At least Michigan doesn’t have Mt. Vesuvius.” “At least we don’t have to worry about typhoons or tsunamis.” John (Jack) V. O’Connor, SRA, of John V. O’Connor Appraisal Services, LLC, Dearborn, MI, can be reached at +1 313 359 4066 or e-mail jackoconnor@rac.net.


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As Countries Shut Out Migrants, Canada Warned It Will Become the New Safe Harbor Globe and Mail (CAN) (12/16/09) Friesen, Joe The ongoing recession is changing patterns of migration across the globe, as many of the world’s richest countries are cutting immigration targets to protect their labor markets and offering incentives for expatriates to go home. But Canada has resisted the trend, and some officials are concerned that this will make the country a target for migrants who could not get into other countries. Asylum claims have already increased significantly, and a spokesman for Citizenship and Immigration Minister Jason Kenney says that some human trafficking groups are encouraging people to make refugee claims in Canada due to its generous asylum system. A report produced by the Canada Border Services Agency but not intended for public review warns of a wave of migrants from Africa, Asia, Eastern Europe, and Latin America, but also recommends against reducing immigration. There is likely to be political unrest in migrants’ home countries and sending them home will only exacerbate the problem, the report says, by further destabilizing them and boosting human trafficking and organized crime. “You’re going to be exporting political instability by exporting workers into regions already fragile politically and economically,” says immigration lawyer Richard Kurland. “In the short term, protecting foreign workers who are already in Canada is the gateway to future economic growth.” (http://www.theglobeandmail.com/news/national/ as-countries-shut-out-migrants-to-stay-afloatcanada-warned-it-will-become-the-new-safe-harbour/article1402019/) Number of Foreign Workers in CR Falling for Over Year Prague Daily Monitor (12/09/09) For more than a year the number of legal foreign workers in the Czech Republic has been declining as many have lost their jobs due to the financial crisis, according to the Labor and Social Affairs Ministry. More than 47,000 foreigners lost their jobs since January and in November alone 2,550 were laid off. The largest population of foreign workers comes from Slovakia, with 99,500, followed by the Ukraine with 60,000 and Poland with 20,000. The number of Vietnamese has plummeted

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from 16,000 last December to just 3,900 today. A government program that offers free travel home along with a financial stipend has been utilized by more than 2,000 foreign workers. The unemployment rate was 8.6 percent at the end of November and experts say it will continue to climb until the summer, possibly hitting 10 percent. (http://praguemonitor.com/2009/12/09/numberforeign-workers-%C4%8Dr-falling-over-year) Hiring of Foreign Workers Gets Business Vote of Confidence Business Wire (12/21/09) A new survey from the Economist Intelligence Unit indicates that most business leaders still believe migration is good for business despite the increasing pressure on politicians to protect jobs for locals because of the ongoing global recession. Seventy-five percent of respondents said that foreign workers are good for the economy and 71 percent say they help make companies more competitive, while 57 percent say they have not changed hiring practices for foreign workers because of the recession. The survey indicates that business leaders do not agree with politicians that protectionism is the way to go, favoring instead open economy and economic migration to drive a recovery, says Western Union COO—designate Hikmet Ersek. But 88 percent of respondents said they face some major challenges in hiring foreign workers, with 27 percent citing regulations as an obstacle and 40 percent saying it is difficult to hire foreigners for low-skilled jobs. Despite their views, very few businesses are publicly advocating for change, the survey finds. Just 15 percent said they have asked the government to ease immigration laws and just 8 percent are using their own company name to advocate for change. The survey collected responses from 501 senior executives. Fifty-seven percent of the organizations represented have annual global sales over US$500M and included a range of industries. Twenty-six percent of respondents were from North America, 28 percent from Asia-Pacific and 27 percent from Europe; the remainder hailed from Latin America and Middle East/Africa. (http://www.earthtimes.org/articles/show/hiringof-foreign-workers-gets-business-vote-of-confidence,1098207.shtml)

January 6, 2010 This issue is sponsored by:

Read the full issue at www.worldwideerc.org/Newsroom/ GLOBILITY Visit our online Career Center jobs.worldwideerc.org

GLOBILITY is an exclusive service of Worldwide ERC®. The editors review more than 15,000 stories in nearly 7,000 sources and prepare summaries of the most significant global workforce mobility news. Included here are a few of the briefs published in the January 6, 2010 issue, which is delivered to your e-mailbox twice per month. © 2010 Information Inc.


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Thoughts on Work-life Balance BY PAMELA DUNLEAVY, CRP

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f only a promotion would come through; if only the cost of living would stop going up and salaries down; if only real estate would start to sell; if only the family had chosen a 15-year, fixed-loan instead of an adjustable rate mortgage; if only the banks would start lending money. The fault in these thoughts about how to achieve work-life balance is that they all search for change in external events, and fail to define for an individual what work-life balance really is. The future is largely unforeseeable and, without a crystal ball, there is no prediction that offers certainty; therefore, one must decide today what they will do to affect their tomorrow. Spend the day imagining what could be, or make the best of today for what will be. One of the reasons it is difficult to define work-life balance is because it is simply a sense of well being. It is different for every person who seeks it and, therefore, achieving it requires taking the time to understand exactly what conditions would constitute balance. The recipe is not equal part work equal part family; rather, it is a combination that may change over time. In this economic environment, many have been asked to take on additional hours, complete new job functions, and make do with less. Does this mean less time with family, or does it mean that adapting to changing times affords a person the opportunity to share new experiences with their families that will impact their future? Achieving work-life balance often is most difficult for the front line dedicated people in the mobility industry who are responsible for the 88 MOBILITY/FEBRUARY 2010

work-life balance of assignees during what is certainly one of the most emotional changes in their lives. Tremendous pressure is placed on the front line to ensure superior service delivery that is in part dictated by the current environment from which there is little control. Demonstrating empathy when a home is worth less than when purchased, filling the needs of the family who is left behind to deal with the

inevitable task of making a move simply for the pleasure of having work. After a full eight to 10 hours in the office, these front line employees juggle dinner, homework, and the work crisis that requires immediate attention. Ask any of them about worklife balance and it is likely to be met with a sneer or a grin. Those who grin have found a sense of enjoyment in what they do and who they are. Too many people spend far too much time at work wishing they were home and, conversely, too much time at home wishing they had completed some work project. There are the insomniacs who spend the night planning and tomorrow in a fog from lack of sleep. Most notorious are the Blackberry-addicted who spend their evenings responding to the unnecessary and regretting their lack of time with family. Today’s society is fastpaced, connected, and burdened with

what is so simple that when born everyone accomplished it without thought. Just take a breath, one moment in time, to reflect on achievements and the enjoyment that can be found within them. Mike Mayer, a not-so famous friend once said, “achieving balance is about recognizing the four categories of life that are most important: family, health, spirit, and work. When all four are in order, balance is achieved. When even one category is not working as it should, focus on that category so that it is running properly and, before you know it, balance is achieved.” Search the Internet and you will find literally thousands of websites offering a sure-fire way to achieve work-life balance. In researching many, the common thread appears to be in knowing what is most meaningful as an individual and then living life in a manner that supports achieving it. With a multi-billion dollar industry in self-help books, video “how-to” training classes, and a few apparently stimulating feel-good drugs, the quest for work-life balance appears to be on nearly everyone’s radar. In the end, there is no single right answer but a number of questions to be pondered: • What makes you feel good, smile, and, most important, laugh? • What moments will you make of today? • When rocking in a chair 10, 20, or 30 years down the road, what stories will you tell? • Can you control it? If not, let it go. Pamela Dunleavy, CRP, is client services director for Primacy Relocation, Memphis, TN. She can be reached at +1 734 354 1910 or e-mail pam.dunleavy@primacy.com.


We’re Putting Our Mark On Diversity At Altair, “diversity” is more than just a buzzword. Women and minorities are 79% of our employee base and 61% of our management team. Our diversity profile reflects our minority-owned status as a certified Women-owned Business Enterprise and our core values as a company. We’re committed to recognizing and making diversity a way of life – different backgrounds, different cultures, different colors. Call today or visit us on the Web to find out how Altair can contribute to your diversity goals.

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MOBILITY February 2010  

Join more than 30,000 relocation professionals who read MOBILITY magazine every month. This informative tool for HR and relocation professio...