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BW Businessworld

Relocation Blues

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Being an expat employee was once a ticket to lux living with all the perks laid on. Be it membership to the poshest clubs, temporary accommodation in a five-star hotel till such time as the manager's house was ready (and this could run into months) and so on. No longer. Even as global transfers are on the rise – especially to emerging markets - companies are getting pretty brutal in cutting benefits, finds a new survey on global relocations.

According to the 2012 Trends in Global Relocation study done by Cartus, a global relocations solutions company, 57 per cent of companies surveyed expected to transfer more employees in the next two years. However, of 41 ‘policy components' or benefits given to employees posted overseas on a long-term stint, 35 are now offered less frequently, four are equal, and two have increased, compared to 2010. Club membership, for example, is now offered in only 5 per cent of long-term assignments.

Even short-term assignments have seen an erosion in benefits, notes the survey.

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Significantly, there's been an increase in repayment agreement usage. Repayment agreements are "contracts" between an employer and employee wherein the employee has to refurbish the cost of relocation in case he or she decides to leave the company within a specified time period. Its inclusion in long-term assignments increased from 49 per cent to 61 per cent and in short-term assignments from 36 per cent to 43 per cent.

The Cartus study is based on a survey of 122 multinationalfirms based in the Americas, Europe Middle East and Africa, and the APAC region, and representing all major industries.

"Our global trends survey uncovered two key issues behind the anticipated increase in corporate relocation activity:  a need for companies to support their planned expansion into emerging markets, and a need to fill the void in available local talent in those markets," explains Matt Spinolo, executive vice president of Cartus.

According to Cartus, a surprising finding is that although the relocation volume is going up, there has been a change in the way companies deploy employees. Apart from trimming benefits, firms are moving away from traditional, long-term assignments into more alternative, temporary forms, or reducing assignment durations.

(This story was published in Businessworld Issue Dated 16-07-2012)