Here are a few things to remember when instituting a cross-cultural awareness program into your corporate relocation program. For a full account of information regarding this service visit our resource library.

Don't forget the family
Just as spouses should be involved in the assignment selection process, they should be involved in training for global assignments. Some experts estimate that nearly 80 percent of all failed global (international) assignments can be linked to the spouse's inability to adjust to the new environment. Each member of the family faces special issues in the expatriate environment that should be addressed.

Other cultural resources
Organizations should consider utilizing their returning expatriates for help with cultural awareness initiatives. Employees who have already completed similar assignments can act as subject matter experts (SMEs) to help new expatriates learn business customs and how to navigate foreign business circles. SMEs can also prove invaluable in helping new expatriates learn the hierarchy in companies with which they will be dealing. It's important to note, however, that companies should not rely solely on employees to provide guidance to new expatriates. Relying exclusively on veteran expatriates can be problematic if the guidance reinforces cultural stereotypes or results in the new expatriate adopting the predecessor's bad habits. While other international assignees have a role to play in helping newcomers adjust, they should not replace professional consultants/trainers.

Alternative views
Although cross-cultural awareness is important, some might argue that its importance is just a hyped up myth. In actuality, on average only 30 percent of American managers sent on international assignment lasting from one to five years receive any cross-cultural training. It can be argued that managing is simply "managing," so where it is done is irrelevant. Another point of view is that any type of short-term cultural training would be ineffective because people can't learn to work and live in a foreign culture after only a few days (or even a few weeks) of training. Others argue that an understanding of a country's culture is something people assimilate over many years based on personal experiences in that specific culture. Others will say that corporate culture takes precedence over country culture. For example, a local employee working for a "bullish" American firm in Thailand might show traits of aggressiveness and conflict, which are not traits normally associated with the Thai culture. These traits, however, may be common in the corporate company culture of the employee's organization, causing the Thai employee to act outside his or her normal cultural dimensions.

Nevertheless, in order to be successful, an expatriate must be comfortable with his or her staff, colleagues, clients and business atmosphere--regardless of location. Cultural specialists also agree that to be successful in dealing with people from other cultures, expatriates need knowledge about the cultural differences (and the similarities) among work locations. The global employee of today's business world can only benefit from gaining cultural awareness, either through direct training or personal experience, which would lead to greater professional effectiveness and company performance. Read more

If you would like more information about cross-cultural education and how it can be added to your international relocation package/program, please contact our corporate relocation consulting team.

What is a group move?
The definition of a group move is when 10 or more employees are being transferred from the same area and to the same area, at the same time, for the same business reason. Group moves are critical to the performance of the company and are of high strategic value in meeting the objectives of the business plan. If the group move is being driven by either a merger or an acquisition, the pressures only become greater as the already charged environment that a group move can create is compounded with the added factors of merging two different cultures. This reality, combined with the inherent risks that a merger or acquisition almost always adds, results in higher stakes and more pressure on corporate relocation program managers to make sure that the right group move process be in place.

Why do group moves fail?
In a series of internal reviews with subject matter experts who have had extensive experience in assisting our clients in planning and managing a wide range of corporate group moves, a number of reasons repeatedly rose to the top as to why a group move may fail:

• Announcing the move without adequate preparation or involvement
• Not having clearly defined objectives
• Lack of time and/or poor planning
• Losing control of the relocating transferees
• Not understanding the unique needs and dynamics of the group
• Not bringing outside resources in early enough
• Political pressure to use non-qualified suppliers
• Lack of senior management endorsement and involvement

How do you avoid the pitfalls? This topic will be covered in our next post. For more information about this subject or to view the complete white paper, visit our resource library.

Accurate and timely accounting of relocation expenses has a far-reaching impact on the overall performance and success of a corporate relocation program, to both the company and the individual transferee. With relocation costs per employee homeowner topping $70,000 in recent years (according to averages reported by Worldwide ERC), effective management of expenses can easily exceed several million dollars annually for a company. Because all relocation services funnel through the expense management function, to be appropriately recorded and paid, this function is a significant responsibility for those managing the relocation program. As a result, corporate relocation managers and/or payroll managers should consider several key issues when evaluating the effectiveness of the expense management process in their companies...read more.

SIRVA recently released a whitepaper dedicated to outlining our fixed-fee home sale program and how it can improve predictability and reduce real estate risk in a slow housing market. Below is an excerpt from this whitepaper, along with a link to the complete document.

The U.S. housing market is continuing to slow, and most economists and housing professionals predict the housing slump will linger longer than previous forecast. Total home sale costs become less predictable in sluggish real estate markets, and unpredictable home sale costs translate into unpredictable total relocation costs.

Relocation service companies offer several home sale programs, each with varying levels of risk, to help employers relocate transferees. Employers should consider the advantages of each program to determine the level of risk involved, and those employers who want a predictable and low-risk home sale program should consider a fixed-fee program.

For more information about our SIRVA’s fixed-fee program, view the complete whitepaper or contact us.

There is no such thing as a small relocation, but some companies don't require the large-scale support needed by those relocating hundreds or even thousands of employees annually. For these companies, SIRVA Advantage might be the answer. SIRVA Advantage is a program developed specifically for companies that relocate fewer than 30 employees per year. Currently, 120 companies participate in the program.

Through the program, companies have access to a dedicated service delivery team with specialized experience in small-volume relocations. Users don't have to be experts in relocation because all the details are handled for them. SIRVA can get a relocation program up and running quickly, and because they manage every aspect of the program, companies don't have to worry about the details. Transferees receive the full benefits of having a corporate relocation provider manage their transfer without the large corporate relocation budget.

"Companies that relocate a small number of employees have different needs than those of their large-volume counterparts," said Tim Callahan, senior vice president of sales and marketing SIRVA, Inc. "These companies may not be as familiar with the process or the complexities involved in different domestic or international relocation scenarios because they simply don't relocate employees as often."

Using SIRVA Advantage, companies can choose their services á la carte, which offers them the flexibility to develop a cost-effective custom program to fit their needs. SIRVA Advantage provides companies with guidance and assistance on a range of relocation issues, including:

• Domestic and international support
• Fixed-fee or traditional home sale programs
• Home marketing services
• Home finding and new home purchase services
• Home rental and temporary housing services
• Mortgage services
• Move management
• Tax and legal services
• Vendor contracts
• Online relocation tracking and reporting

One-on-one attention and interactive tools
The Advantage process starts with a consultation between our client and SIRVA Advantage's Business Development Manager, Jane Yanosko, to coordinate services tailored for each transferee - with this program a corporate relocation policy is not needed, SIRVA's abbreviated contract serves as the purchase order for all services authorized by the client. Once services are determined and the transfer process is initiated, the client and the transferee receive dedicated support from relocation counselors and associates focused on serving clients with fewer than 30 relocations annually.

In addition, transferees have access to MoveOurHome.com, a Web portal designed to help them take an active part in their move. MoveOurHome.com has up-to-the-minute relocation information configured on a per-client basis. On the site, transferees can view company-specific policy information and transferee-specific relocation program information.

"Transferees can submit, view and check the status of expense reports, communicate with their relocation counselor, and specify home and area preferences," continues Callahan. "They also have access to an online move organizer and essential destination information such as weather, crime statistics, school reports, population figures and other community information."* SIRVA Advantage was developed based on input from current customers and internal service teams, and is designed to provide a company will a small or no relocation program a high level of service on a more flexible, on-demand basis.

To learn more about SIRVA Advantage, contact Jane Yanosko, SIRVA Advantage business development manager, at 800.531.3840 or jane.yanosko@sirva.com.

The complex and rapidly changing socioeconomic and political climate in China, together with a massive shortage of skilled workers, makes human capital and global workforce development particularly challenging. As a follow-up to SIRVA's China Urban Index, released in 2006, SIRVA Relocation recently completed a study to address the lack of readily available relocation data and trending on mobility policy and practices in China. The results are documented in "The SIRVA China Mobility Report."

Thirty-seven leading global companies contributed to this unique SIRVA research initiative, the results of which have formed a valuable benchmark framework for human resources professionals to observe current key mobility policy and practices in China. This benchmark report on key findings and trends represents SIRVA Relocation's analysis of the most up-to-date data spanning seven industry sectors in both Tier 1 and Non-Tier 1 regions in China. 

Substantial differences in infrastructure and accessibility exist between Tier 1 and Non-Tier 1 regions, which companies must evaluate when creating policies to introduce employees to these varied conditions. 

Below is a check-list of key findings for this study.

Key Findings
Current Assignments: While all participating companies reported traditional international short- and long-term assignments, there is an emerging trend of new assignment types. Twenty-eight percent of companies have domestic short- and long-term and permanent one-way assignments and 33 percent of companies report permanent one-way moves into Tier 1 and Non-Tier 1 locations.

Emerging Trends and Associated Challenges: As companies in China look to expand their business with locally or regionally hired resources, rather than high-cost, international long-term assignments, it is anticipated that future permanent one-way assignments will increase more than any other assignment type. Companies have found permanent one-way assignments to be the most challenging, contradictory and controversial, making it difficult to establish a framework for policies and practices.

As a result, assignment terms and conditions are handled on a case-by-case basis due to lack of benchmarking data and experience among human resources professionals and global mobility managers. Consequently, inequalities are widening in remuneration packages as talent becomes more valuable, so new models will have to be developed to mirror evolution in emerging assignment types.

Domestic relocations are new to China. Like regionally hired permanent one-way moves, they are predicted to increase. These moves, which originate and conclude in China, are used predominantly in Non-Tier 1 cities where there is significant growth.

Cross-cultural Awareness: Most companies provide cross-cultural awareness programs to transferees: however, few companies currently enforce mandatory sessions. SIRVA expects more companies will emphasize cross-cultural training to ease the transition into Chinese culture and create an understanding of language and customs.

Assignment Administration Outsourcing: 70 percent of companies surveyed outsource assignee administration and between 86 and 92 percent outsource various assignee support services. However, companies outsource contract preparation and international compensation. SIRVA is witnessing an increased trend in companies consulting with external providers for mobility policy development due to a lack of available resources and global mobility expertise in-house.

Assignment Representation across Industries: The following graph provides a snapshot of industries and assignment types in Tier 1 and Non-Tier 1 locations. Click here to view the graph.

Of the surveyed companies, IT/telecom and petrochemical industries show the highest representations of assignee population in Tier 1, followed by manufacturing and pharmaceutical.  IT/telecom and petro-chemical industries also show the highest representations in Non-Tier 1 regions, followed by manufacturing and automotive.

The study also indicates the majority of assignments in Tier 1 and Non-Tier 1 regions are long-term and short-term assignments, followed by permanent one-way moves. 

For more information you can visit http://chinaindex.sirva.com/study.asp

The complex and rapidly changing socioeconomic and political climate in China, together with a massive shortage of skilled workers, makes human capital and global workforce development particularly challenging. As a follow-up to SIRVA's China Urban Index, released in 2006, SIRVA Relocation recently completed a study to address the lack of readily available relocation data and trending on mobility policy and practices in China. The results are documented in "The SIRVA China Mobility Report."

Thirty-seven leading global companies contributed to this unique SIRVA research initiative, the results of which have formed a valuable benchmark framework for human resources professionals to observe current key mobility policy and practices in China. This benchmark report on key findings and trends represents SIRVA Relocation's analysis of the most up-to-date data spanning seven industry sectors in both Tier 1 and Non-Tier 1 regions in China.

Substantial differences in infrastructure and accessibility exist between Tier 1 and Non-Tier 1 regions, which companies must evaluate when creating policies to introduce employees to these varied conditions.

Tier 1 includes major capital cities in China, which offer better infrastructure regarding health, housing, education, communication, access to facilities and security. Non-Tier 1 locations are generally four to six hours away from capital cities, some with very limited expatriate standard infrastructure, difficult environmental factors and obstacles relating to housing, education and health care. Beyond Tier 2 cities have minimal or no expatriate standard infrastructure in place.

Key findings of this study will be posted later this week.

Improving Accent Through Training
A foreign national’s accent may impede their communication ability, even though they are fluent in English. Research indicates accents are caused mostly through differences in rhythm and stress, as well as difficulty in making certain sounds linguistically. A common example is putting an emphasis on the wrong syllable.

Accent is almost impossible to improve without training. Speakers seldom can hear what they are mispronouncing and even if a listener points it out to them, they are unlikely to know how to correct it.

For example, certain regions mix up L and R sounds because they cannot hear the difference, they may not notice a mispronunciation, but others may not be able to understand what they trying to communicate.

Accent reduction training is provided by universities and private training companies where individuals are trained how to identify incorrect pronunciations and how to exercise their mouth and tongue to correct the problem. Other teaching methods include mimicry, which helps students correct pronunciation, rhythm and stress by watching videos of native language speakers, then mimicking what they hear and see, including body language. 

Typically, most training programs incorporate individualized programs developed as a result of a comprehensive speech analysis. These programs mostly last between ten and 20 sessions. For some, improvement can be seen immediately, but it can also take between three and six months for others.

Most programs can be provided one-on-one or in a classroom setting. Classroom programs generally take longer and are less expensive than one-on-one tutoring but one-on-one tutoring is more effective and quicker.

Linguistics Plays a Part
Accent and grammar are usually established by ages six and twelve respectively. In order to help someone change their accent, an instructor needs to be a linguistics specialist and have the knowledge of a speech therapist.

A language school may claim to provide this training, but beware, a language instructor will not have the skills and training of a linguistics professional.

Accents are influenced by the tongue, lip position, vocal cords and air movement through the mouth or nose; instructors must be able to show students how to manipulate these in order to limit mispronunciations as a result of their accent.

Many companies offer language training to international corporate relocation transferees, though few offer accent modification training which is often required more than traditional language training.

Companies often dismiss accent modification as being too expensive, or because they feel there is little that can be done to correct the problems caused by accents. In fact, there is much that can be done to correct accent-related problems, and as companies research the various options available they will find that it is surprisingly cost effective and beneficial.

Let me know if you require a referral to an accent modification specialist.

There are several types of training courses available for foreign nationals relocating internationally to the United States. From cultural awareness training to language training, companies can employ several tactics to help foreign nationals better acclimate to life and business in a new country.

Language training may be the most obvious form of support for foreign nationals in the United States. This may be the case for those transferees who speak little or no English, but many companies overlook those transferees who relocate from countries where English is a first or second language.

Some companies may assume that when a transferee relocates to the United States from an English speaking country such as India or Singapore, they have a command of the English language and need little assistance, but what many companies are beginning to realize is that a foreign national who is completely fluent in the English language may still be routinely misunderstood because of their accent.

Benefits of Accent Reduction Training
Companies internationally relocate foreign nationals to the United States at great expense. They are often experts in their field and are brought to this country because of their technical expertise, qualifications and experience.

Much of this value can be lost if they are unable to communicate effectively with their office colleagues, teams or clients. Not only does this impact a transferee’s effectiveness, but it can also lead to frustration and feelings of isolation.

By making accent reduction programs available to foreign nationals, organizations can maximize their expertise and knowledge. It can help ensure a positive return on the company’s investment in the transferee and further the individual’s career development during and after the international relocation assignment.

More information about this topic coming this week.

Mortgage expectations in the United States have changed as a result of the current lending market, and transferees will face a different lending process from what existed only a few months ago. While it is still easier to get a home loan today than it was eight years ago, transferees should be aware of several changes so they can avoid mortgage surprises.

"Transferees should be encouraged to be pre-approved and speak to a mortgage counselor once they accept a relocation, even if they are not yet ready to purchase a home," says Rick Hoover, director of client services at SIRVA Relocation. "A credit check can be completed up front, which allows transferees to be proactive in addressing any issues. They should also be prepared to provide relevant financial documentation, as programs that allow no, low or limited documentation have disappeared or been drastically curtailed in most areas."

In addition, transferees should also expect to buy within their salary range, since the use of projected bonuses or incentive pay is no longer acceptable. They should also expect to make a down payment, as zero down loans are not as accessible. Making a down payment-even a small one-also lowers the opportunity for negative equity situations in the future.

Another significant change is the availability of certain types of loans. Jumbo loans are now more restrictive than smaller conforming loans, and as a result, executives who may have been approved for jumbo loans last year may no longer qualify. Also, combination loans-such as 80/10/10 or 80/20 loans-which many transferees have used to avoid mortgage insurance or as a bridge loan, are more restrictive than ever. Pricing and underwriting guidelines have made these options less favorable, causing mortgage insurance to once again be more prevalent than in the recent past.

"Mortgage lending changes regularly, and it is important that transferees have access to a knowledgeable resource to answer any questions," continues Hoover. "SIRVA has mortgage counselors available to work with transferees within a company's relocation policy parameters. They can walk transferees through various lending options and help determine the right loan for them based on several factors, including risk levels, cost, credit qualification and housing needs."
Hoover emphasizes that if companies conduct their own counseling with employees, they should stress that transferees talk to a lender at the beginning of the process, even if they don't intend to purchase a home right away. This will help transferees better understand what will be required once they are ready to move forward. 

Regardless if transferees work with a SIRVA Mortgage counselor or another mortgage professional, they should have the proper financial documentation available before beginning the lending process. "Underwriting guidelines can change daily," explains Hoover. "The more educated transferees are about the process, the better prepared they'll be."

For more information about the latest mortgage trends visit Paul Klemme's Blog, "The Mortgage Insider" or visit our resource library to view our recent Webinar, "Today's Mortgage Industry and its Impact on Relocation."

• Tie benefits to desired behavior: Companies have every right to require transferees to follow established home sale processes. The process to be followed should be clearly stated in the company's corporate relocation policy along with the benefits to the transferee.  Reasonable expectations include complying with the company code of conduct and following the corporate relocation service providers' recommendations which are based on the company's policy. Penalties for not complying with the terms of the policy, as well as any home sale incentives that are to be offered, should also be clearly outlined.

• Require full property disclosure and educate transferees on ineligible properties: Accurate assessments of property history, condition and initial ownership risk when a home is sold limits future risk potential and protects both the company and transferees. Transferees should understand that purchasing ineligible properties may cancel future home sale benefits.

• Require active transferee marketing participation:  Home marketing needs to be well planned, supported and implemented properly by all parties involved. Because the real estate market is changing rapidly, marketing strategies must be adjusted quickly, and prices need to be reduced in shorter intervals. Failure to adequately react can extend marketing time, increase corporate relocation program costs, push homes into inventory, decrease the pool of potential buyers, and reduce the final price transferees receive on the home sale.

• Evaluate all offers: Every appraisal should be thoroughly reviewed before giving it to the transferee in order to ensure they properly recognize the current market conditions. Do not hesitate to negotiate down to 95 percent of the appraised value. This also minimizes the emotional reaction to perceived "low" offers and the potential loss of an offer that would have been acceptable to the company.

• Require mandatory home-finding assistance:  Home-finding assistance reduces home loss-on-sale risk for those transferees (such as new hires) who are future relocation candidates and ensures employees don't purchase ineligible properties. It also helps mitigate the challenges of current market conditions, such as selecting a qualified agent, planning home-finding trips, evaluating financing options and reviewing contracts.

• Develop home sales programs that fit your company's risk profile:  Home sale programs vary in risk based on several factors. These include program type, number of controls in place, current market conditions, locations where homes are sold or purchased, past company practices and company culture. It is critical that companies are aware of the risks involved and create a home sale program that meets the company's overall service, cost and risk objectives.

For assistance incorporating these real estate best practices into your corporate relocation program or to learn more about how to mitigate real estate risks via a home sale program, visit David Barlow's blog.

According to the latest forecast by the National Association of Realtors® (NAR), over the next few months, existing home sales in the United States are expected to hold fairly steady, then rise later in the year and continue to improve in 2009. NAR reports existing home sales for 2007 totaled 5.65 million, but projects home sales to edge up to 5.70 million this year and reach 5.91 million in 2009, which is still well below the 6.48 million units sold in 2006.

New construction home sales will continue to decline. According to the Association, new-home sales were reported at 770,000 for 2007, and are projected to decline to 669,000 this year before rising to 730,000 in 2009, but well below the 1.05 million in 2006.

In an early January speech, Daniel H. Mudd, chief executive of the mortgage finance company Fannie Mae, said home prices would "perhaps begin to gain modestly" in 2010. However, The National Association of Realtors (NAR) has a more positive prognostication that by the end of 2008 or early in 2009 most markets will start seeing appreciation once again.      

SIRVA does suggest companies put the appropriate controls in place to reduce risk and manage program performance at both the departure and destination locations. The following 12 best practices will help companies provide the policy framework so that transferees price and market their homes so they have a greater probability of selling their homes to an outside buyer and not have them go into inventory.

• Use qualified agents:  Use a network of qualified brokers, such as those found in SIRVA's Preferred Broker Network, to ensure transferees receive the right expertise and the best value when selling their home in the current real estate market. Using a qualified and "relocation experienced" broker is critical because if a home is listed at an incorrect price or without adequate marketing support, it is unlikely to find a timely buyer at the optimal sales price.

• Require two broker price options/broker market analyses: Multiple broker price options will help establish the most accurate selling price, which is key to quickly selling a home. Because market activity steadily falls after the first few weeks a home is on the market, pricing realistically from the beginning will attract more potential buyers.

• Delay appraisals: Delay appraisals to provide the opportunity to market a home before incurring appraisal costs. This provides more data for appraisers to use in value determination, sets more realistic value expectations, and lowers home sale cost and risk.

• Support mandatory marketing periods: Require transferees to list their homes and market them effectively for a mandatory period of time (at least 60 days) in order to increase, not only the number of amended-value sales, but also the opportunities to generate outside sales with no appraisals needed.

• Establish list-price caps:  Establish list-price caps to prevent over-listing during the property's initial exposure to the market, which is one of the most common reasons a home sits on the market. Make sure that your company's policy language specifically states that a home may not be listed at more than 105% of the average of the two most-probable sales prices from the broker market analyses. More and more companies are now going to 104% or even 103%. The list price should also be adjusted based on changes in market conditions and/or receipt of the appraised value offer.

• Modify a BVO/BVX to AVO/AVX:  In down real estate markets, some homes simply will not sell-even when transferees do everything right. Offer a guaranteed buyout after 90, 120 or 150 days to ensure the home will not be on the market past a certain time frame. This will eliminate delays in a transferee's relocation schedule, diminish transferee frustration from not selling his or her home or even prevent a cancelled relocation.

The other six best practices will be posted later today, so stay tuned. 

fundamentals of relocation webinar
Thursday, May 22, 2008
1:00 p.m. EST (10:00 a.m. PT)

Speaker: David Barlow, SCRP, GMS, Senior Vice President, Client Support Services, SIRVA
Duration: One hour

This "relocation 101" webinar is designed for new relocation professionals, procurement managers and supply chain managers who would like an overview of relocation fundamentals, and for anyone who wants to stay current with the latest policy trends and best practices.

This session will provide a brief history of the industry, and a broad overview of the relocation process, including a review of the terms and concepts most common to relocation policy development and implementation. The discussion will include household goods and temporary living options, the home sale process based on IRS Revenue Rulings, and industry trends such as lump-sum benefits and high-cost area assistance.

Register at https://van.webex.com/van/j.php?ED=91994767&RG=1

Details for joining the session will be included in the registration confirmation e-mail

fundamentals of relocation webinar
Thursday, May 22, 2008
1:00 p.m. EST (10:00 a.m. PT)

Speaker: David Barlow, SCRP, GMS, Senior Vice President, Client Support Services, SIRVA
Duration: One hour

This "relocation 101" webinar is designed for new relocation professionals, procurement managers and supply chain managers who would like an overview of relocation fundamentals, and for anyone who wants to stay current with the latest policy trends and best practices.

This session will provide a brief history of the industry, and a broad overview of the relocation process, including a review of the terms and concepts most common to relocation policy development and implementation. The discussion will include household goods and temporary living options, the home sale process based on IRS Revenue Rulings, and industry trends such as lump-sum benefits and high-cost area assistance.

Register at https://van.webex.com/van/j.php?ED=91994767&RG=1

Details for joining the session will be included in the registration confirmation e-mail

According to the National Association of REALTORS® (NAR), 2007 home sales were down 12.7 percent from 2006. And, excluding new construction, home prices in 2007 slipped 0.7 percent from 2006—marking the first nationwide decline since the Great Depression.

The sub-prime disaster led financial institutions to more closely evaluate borrowers, and as a result, those individuals that could previously secure a mortgage may not be eligible today. This drop in qualified buyers has meant an increase in housing inventories and the number of days homes are on the market across the country.

While the current real estate market means greater selection and reasonable prices for fewer qualified buyers, it’s especially tough on sellers. Loss-on-sale (LOS) assistance programs are typically used to partially protect home sellers from taking a loss on their home when relocating for business. LOS programs are typically employed when home market values depreciate at a faster pace than would be covered from having lived in the home long enough to break-even.

At SIRVA University, David Barlow, SCRP GMS, senior vice president of client support services at SIRVA Relocation, discussed best practices when developing
or revising a corporate relocation LOS assistance program. He discussed program management definitions, sample formulas, up-to-date facts, and eligibility requirements. He also discussed common pitfalls and how they can be avoided.

According to the NAR, the worst may be over but the national market is not yet in a positive price territory. While there is every indication the market hasn’t yet turned the corner to nationwide home price recovery, experts are confident a correction may begin as early as the end of this year.

“From indicators we’ve seen, downward price pressure in many markets will continue, but likely at a reduced rate of decline,” said Barlow. “The number of home sale losses is likely to stay relatively high but shouldn’t increase from 2007. It will get better, but the market won’t reverse itself overnight.”

Don’t Call it a Comeback
Loss-on-sale assistance programs were developed more than 25 years ago to address similar market conditions as what we see today. The need for these programs often diminished as the market strengthened, but they were sometimes employed during very short relocation intervals or with new construction to ensure sellers didn’t take a loss on their homes. In point of fact, in normal real estate times, it was nearly always the new construction that resulted in a LOS.

In poor market conditions, the amount of time between a relocation and the break-even point changes dramatically, and transferees essentially need to stay in their homes much longer to avoid taking a loss on their property.

According to Barlow, potential transferees have every right to want to wait out a bad market to avoid a loss on their home. They also have every right to expect their company to provide greater financial incentives if they are expected to relocate in a down real estate market. In fact, transferees are increasingly resisting and turning down corporate relocations if their companies decide not to help.

Correcting a common misconception, Barlow also noted that home LOS has nothing to do with the transferee’s equity position in their home. If a person has taken out a second mortgage or an equity line of credit the LOS benefit they may receive is often not going to provide the relief they need. Companies are strongly advised to limit LOS programs to the difference between what the transferee paid for the home and the home’s selling price.

% Loss-On-Sale Facts & Figures
95% of homes sold out of inventory result in loss to the company, even in good real estate times
50% of companies offer loss-on-sale assistance benefits
89% of SIRVA client’s share loss with their employees
75% of companies do tax protect the loss-on-sale assistance amount

Is it right for your company? Find out tomorrow as we continue to blog about LOS programs. Interested in learning more about reducing real estate risk? visit David's blog.

fundamentals of relocation webinar
Thursday, May 22, 2008
1:00 p.m. EST (10:00 a.m. PT)

Speaker: David Barlow, SCRP, GMS, Senior Vice President, Client Support Services, SIRVA
Duration: One hour

This "relocation 101" webinar is designed for new relocation professionals, procurement managers and supply chain managers who would like an overview of relocation fundamentals, and for anyone who wants to stay current with the latest policy trends and best practices.

This session will provide a brief history of the industry, and a broad overview of the relocation process, including a review of the terms and concepts most common to relocation policy development and implementation. The discussion will include household goods and temporary living options, the home sale process based on IRS Revenue Rulings, and industry trends such as lump-sum benefits and high-cost area assistance.

Register at https://van.webex.com/van/j.php?ED=91994767&RG=1

Details for joining the session will be included in the registration confirmation e-mail

What can companies do to leverage technology in order to reduce cost, increase accuracy, compliance and reporting capabilities in the global mobility space?

There are now technologies and best practices to help manage global mobility cost, data and compensation accrual for tax reporting and budgeting purposes, to allow for compliance, risk mitigation and financial planning. These are areas that are important to all companies but in the past have been a challenge to achieve in a complex global compensation and tax arena.

New specialist companies--with the latest technology--can provide companies with cost estimates and linking processes, which streamline reporting and reconciliation. They also track actual expenditures, including employee compensation and benefits. Tracking such expenses involves leveraging technology to effectively and accurately navigate through global compliance and regulatory issues, and linking reporting processes to create greater efficiencies.

New, sophisticated services and programs can streamline otherwise very labor-intensive reporting processes. In addition, they can provide customized reporting solutions on a faster, real-time basis while also reducing the rate of error. Providers exist for these purposes—to provide administrative, back-office payroll and financial reporting solutions on a global scale.

When evaluating what type of program is right for a company—whether it is payroll management, tax preparation or managing global compensation—executives should select ones that are compatible with multiple countries and multiple sets of payroll codes. 

Companies always struggle with tying together numbers at the end of year, but there should be ongoing, real-time reporting and analysis so that annual financials become merely just another step. Let the providers program do the work for you and provide effective, accurate data to your organization.

fundamentals of relocation webinar
Thursday, May 22, 2008
1:00 p.m. EST (10:00 a.m. PT)

Speaker: David Barlow, SCRP, GMS, Senior Vice President, Client Support Services, SIRVA
Duration: One hour

This "relocation 101" webinar is designed for new relocation professionals, procurement managers and supply chain managers who would like an overview of relocation fundamentals, and for anyone who wants to stay current with the latest policy trends and best practices.

This session will provide a brief history of the industry, and a broad overview of the relocation process, including a review of the terms and concepts most common to relocation policy development and implementation. The discussion will include household goods and temporary living options, the home sale process based on IRS Revenue Rulings, and industry trends such as lump-sum benefits and high-cost area assistance.

Register at https://van.webex.com/van/j.php?ED=91994767&RG=1

Details for joining the session will be included in the registration confirmation e-mail

The Panel:

Paul Klemme
President
SIRVA Mortgage

Peggy Love
President & CEO
Full Circle International Relocations, Inc.

Kelly Reiss, CRP
Senior Vice President / General Manager,
Eastern Region / Global Supply Chain
SIRVA Relocation

Connie Swenson
Senior Vice President, Relocation and Referral Services
Coldwell Banker Residential Brokerage / Arizona

Joseph K. Taylor, SCRP
Executive Vice President
Valuation Services, LLC

Kelly Reiss moderated today’s panel of mortgage, destination services, household goods shipment, and real estate supplier representatives.  The session gave clients the opportunity to speak directly with SIRVA’s suppliers, gain a better understanding of how the relocation supply chain operates, and hear a discussion of today’s real estate market from the supplier perspective.

 

The discussion began with new trends in the relocation industry.  Multiple suppliers cited declining markets as a significant trend emerging this year.  As Paul Klemme noted, the fourth quarter of 2007 ended with 108 U.S. markets identified as declining markets by Freddie Mac.  During the first quarter of 2008, this number has already risen to 205, and experts predict at least 100 more declining markets in the second quarter.  Additionally, the number of foreclosures on U.S. homes has risen dramatically in recent months.  The panel explained how lenders have reacted to the poor markets by decreasing the amount of overall lending and requiring higher down payments from home buyers.  As a result, the number of potential homebuyers has decreased, and relocating employees are having difficulty selling their homes.

 

While the real estate market lies outside of the suppliers’ control, the panel also discussed issues directly affected by suppliers, such as how they manage the quality of their services.  Several panel members emphasized the important role that employees play in ensuring consistently high quality.  For example, Connie Swenson explained that real estate agents use tactics such as designating certain specialists for SIRVA transferees.  If at any point the specialists lack the appropriate time to dedicate to SIRVA’s clients and transferees, realtors realize the importance of quickly hiring additional employees so quality does not suffer.  Adding to the idea that the quality of a supplier comes from its employees, Paul suggested that a company’s commitment to on-going training and pushing to make people better at what they do forms an essential element of a successful supplier.

 

Further discussions touched on other interesting topics such as overcoming a seller’s denial that they live in a declining market and the importance of securing a loan quickly in today’s economy.  In conclusion, Kelly requested that each supplier share one last piece of information with attendees; panelists final comments centered on the idea that clients, transferees, SIRVA, and every member of the supply chain must work together for a successful relocation.

Avrom Goldberg
Managing Director, Asia-Pacific and the Middle East
SIRVA Relocation

Lorraine Jennings
Manager, Consulting Services, Asia-Pacific and the Middle East
SIRVA Relocation

As Avrom Goldberg and Lorraine Jennings explained, it is important for relocation professionals to stay up-to-date on relocation trends in China because of the country’s power as regional and global economic engine.  For each of the past 30 years, China has demonstrated eight to 12 percent economic growth, and it is showing no signs of slowing down.  In order to provide attendees with valuable insights and analysis of the current relocation trends in this rising economic power, Avrom and Lorraine described the findings of the SIRVA’s China Mobility Report.  While Avrom and Lorraine could not summarize the entire 95-page report during the presentation, they shared highlights of their findings.

 

Increased demand for deployment to China, one trend discussed during the presentation, is expected to continue.  However, the sources of assignees selected for deployment are changing.  Traditionally, assignees to China came from Australia, Europe, the United Kingdom and the United States.  Recently, hiring has been more concentrated in Asia, with most assignees coming in the form of returning Chinese workers or locally hired foreigners.

 

Companies who continue to send assignees to China are using a variety of selection and planning processes that do not follow a pattern.  For example, pre-assignment visits ranged from a brief three days to a full week; some companies offer extensive cross-cultural training for assignees while others do not; certain companies assign mentors, some extend mentoring programs to leadership programs, and others offer no structured mentoring to assignees in China.  In these areas of their relocation programs, companies are not following a uniform trend, but rather they are doing what is in the best interest of their individual organizations.

 

On the other hand, companies are moving in the same direction in other areas of their programs.  For example, many companies are changing their philosophies of hardship allowances.  While 51% of companies offer hardship allowances across all assignments, many are developing new ideas of what places they consider “difficult.”  Avrom and Lorraine mentioned Shanghai and Beijing as places that recently necessitated hardship allowances, but may no longer justify as high of a level of compensation.  Furthermore, many companies are shifting from a host-based to a home-based approach for hardship allowance policies, which illustrates that companies are finding a home-based method more effective in China’s current economic framework.  

 

Regardless of which specific policies and programs companies decide are most useful when sending their employees on assignments to China, the companies within SIRVA’s study agreed on the obstacles that they must overcome.  They identified the following as the top-five human resources and mobility challenges they face when filling assignments in China:

 

• Creating effective policy frameworks for separate groups, such as locally hired foreigners or international new hires who are not full assignee
• Understanding, capturing and reporting the total cost of assignments to the company, including measuring the return on investment of the assignments
• Locating quality service providers in China with a strategic vision
• Developing a young workforce with global cultural competency
• Finding credible benchmarks for hardship allowances and housing data for assignments in China