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.

Imagine that you are just leaving a meeting where you were told that your employer has decided to relocate a group of people from one location to another. The CEO told you that you are expected to manage the move. He/she stresses to you that the success of this group move is critical to the future of the company and everyone is counting on you to, "make it happen." Any number of business scenarios could lead to this decision.

Even though this may be your first experience in managing a group move, you may have heard stories about the stress group moves can bring to an organization and the people who are working on the relocation. You may recall hearing how a group move does not always turn out as planned, and that a lot can change between the time the plan is initiated and the last employee is in place at the new location.

Whatever you do, you need to be prepared for the responsibility of:

• Business disruption
• Talent loss
• Low employee morale
• Cost overruns
• Having your plan for the move challenged by others

You may not be able to eliminate all of the issues, but if you can bring an effective plan to the project and assemble the right team to execute the plan, the odds that the move will be a success and that you will survive the group move will be greatly  improved. The intent of our "How to Effectively Plan for a Group Move" white paper is to provide you with a proven approach to effective group move management.

 View white paper

If you would like more information about corporate relocation services including group move management consulting, contact us.

Group moves occur for a variety of reasons and in most cases can be treated (relative to the IRS rules) exactly as other non-group moves. A group move, however, may not meet the IRS 50-mile test. In that case, consideration should be given to providing a short distance group move policy. The IRS 50-mile test generally requires that in order for certain costs associated with a relocation to be excludable from income, the distance between an employee's old residence and the new work location must be 50 miles greater than the distance between the employee's old residence and the old work location.

It is not uncommon for companies to change office locations, or have multiple facilities in the same geographic area, where the distance between an employee's old and new work location may or may not meet the IRS 50-mile test. For example, in larger cities, where a move may be from one side of a metropolitan area to the other, it is likely that the IRS test will not be met. These "short distance" office relocations, however, can significantly impact the commuting patterns of employees. It is highly unlikely that employees impacted by an office move, where their commute could be increase by up to 49 miles, will simply accept an "IRS explanation" as to why they are not entitled to relocation benefits. Employees will often make their feelings known and ask management to consider providing some or all of the relocation benefits provided in a standard regular or "long distance" employee transfer.

The relative distance that a short distance group move involves, necessitates a closer look at the specific features provided in a company's relocation policy to see if benefits should be offered for a short distance group move. Properly structured, short distance group move programs reduce absenteeism, attrition and administrative time, and are often far less costly than a normal relocation program.

For more information about short distance relocation packages, visit our relocation resource library and view our white paper.

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

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. 

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.

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