Converging geopolitical and economic forces are reshaping the landscape of relocation making it imperative for companies operating in the employee mobility space to pay close attention to what is happening around them. Shifting demographics, new entrants in the housing market, immigration and visas, and changing tax questions are among the issues affecting the relocation industry in the year ahead.

“Volatile” is the word Lee Curtis, RESIDE Worldwide, Inc.’s founding partner and co-CEO, uses to describe the relocation landscape. “From Brexit to immigration to the current trade wars, the companies that we all serve will be making real-time decisions on hiring, relocation and growth that will have a dramatic downline effect on the service providers that support them.”

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Christine Moore, vice president, global marketing for Oakwood, says the company has the opportunity to work with companies operating in a range of industries around the world and she has seen first-hand things impacting relocation.

“In the wake of the most recent US election, Brexit, visa challenges and other global conditions, we are finding that companies are increasingly focused on saving costs – finding efficiencies within their corporate travel and relocation programs – while also maintaining employee compliance with their policies,” Moore says. “Companies have a continued need to align talent around the globe with their business strategy and growth plans,” regardless of current, external marketplace conditions.

“When comparing costs among options, it’s important to remember it’s not just about the rate,” Moore says. “Any analysis should take into consideration the entire cost of the stay of relocating an employee, including the cost of food, transportation and parking, and laundry services, while considering which environment will allow the traveler to settle in quickly and be most productive.”

For example, proximity to the office is not just about the commute; there are other reasons an employee could want to be near work. In high-demand metropolitan areas such as the Bay Area of northern California, Oakwood has corporate customers who are willing to pay higher rent to be closer, in order to support the density of their employee base and create an easier living experience.

Data, Outsourcing & DIY
The relocation arena continues to be highly competitive, and will likely become even more so in 2019 and beyond, according to Rajeev Goswami, co-founder and CEO of WWStay. That is the primary reason his company has placed a significant amount of its focus on technology and reporting.

“Data is king,” Goswami says. “And will continue to be increasingly important in the future. Disruptions here include the technological advancements that allow for increases in the speed at which data can be transferred, the increased use of video, and the desire of many employers to allow employees the flexibility to live where they like and participate via these improving technological means.”

Tammy Gillespie, founder and CEO of temporary housing provider Switchplace, says a combination of uncertainty in the economy, visa processing delays and shifts by some companies to use extended business travel have all played a role in relocation disruption lately.

In the United States, changes in the tax law in 2018 mean moving expenses are now no longer deductible, except for military personnel who are moving under orders. Thus far this has not meaningfully reduced relocation activity, but over time it is expected to have some effect. “In most instances, the company is paying the taxes on behalf of the employee,” Gillespie says. “This just adds more cost to the relocation package."

In 2018, immigrations challenges impacted the relocation landscape, says Selena Rogers, director of sales and reservations at Furnished Quarters, especially the working limits placed on many visas.

Even with the disruptions, Goswami notes that when a particular skill set is needed in a location, businesses will do what it takes to get the right resources to that location, so the impact may not be as big as some think. That’s why WWStay’s expectation is for relocation activity worldwide to increase as global economies remain relatively strong.

“The best evidence of that is in the Middle East where there are frequently wars (or rumors of wars), yet resources are moved there daily,” he says. “What the current situation does do, however, is make the lead time longer. It simply seems to take longer to get visas, more information has to be provided, the forms must be completed perfectly.”

Another trend that has continued to emerge in the last year or so is the outsourcing of relocation services, according to Goswami. Effectively handling relocations requires expertise, but most organizations lack the volume to justify taking on an in-house capability.

“Part of this includes visa management for international relocations,” Goswami says. “Obtaining the right visa is becoming more difficult. Therefore, the need to have access to an expert – someone who works on visas full time – is a requirement. Only the very largest organizations even consider in-house visa management, and most end up with an outsourced provider.”

Gillespie says many companies do outsource due to concerns with visa processing and tax liabilities for assignees. However, in many instances, outsourcing parts of the process to a relocation management company may increase costs.

“For companies that have a great number of international relocations, the RMC is a very helpful resource,” she says. “However, using them to manage extended business travel, project groups or intern programs adds considerable cost and a positive return on their investment is just not there.”Given the headwinds of change, Curtis says he wouldn’t be surprised to see more companies either adopt an outsourced option or seriously look at the capabilities of their current outsourced mobility supplier.

“The complexities highlight the need to be aligned with an innovative, cutting-edge mobility partner that truly understands and can react to the implications of these global conditions,” he says. “I will not be surprised to see a number of companies move to new suppliers this year.”

Adding to it all is the continued disruption coming from the do-it-yourself trend in services such as moving, transportation and lodging. And while popular as both a cost savings and convenience, they also open the door to risk management and compliance challenges.

“While companies prefer that their employees use company-approved travel programs, the effect of the Millennial will continue to shape how companies react to their needs,” Curtis says. “At RESIDE, we have continued to evaluate and develop tools to assist our clients with their changing needs. Embedded in our 3SIXTY platform are a number of lodging tools that allow for real-time options in both the traditional and alternative lodging sectors.”

How Long Is Long-Term? 
One of those traditional alternatives is extended stay hotels – but there are pros and cons. Some of the pros for some travelers include daily room service, an in-house restaurant and concierge service. Among the cons, possibly a less advantageous choice of locations, less space and the feeling that one is only a temporary visitor. Other downsides include a no-pets policy at many hotels and the possibility that costs can be significantly higher.

However the relocation landscape continues to focus on ease and convenience, says Kevin Kelly, vice president of sales for Hyatt Place and Hyatt House, Americas. “With relocation, many of our customers prefer to be close to their new work location and that is a key factor in housing,” he says.

On the other hand, the “cool factor” is also playing a role in relocation decisions, Kelly says. “For example, we know younger travelers often times opt for urban locations where they can immerse themselves in a new community. While Hyatt House hotels have traditionally been focused on suburban and airport locations, we are responding to this trend by bringing more locations,” Kelly says.

Moreover, he says, with extended stay hotels, guests can anticipate a consistent level of quality and service. “Amenities, such as food and beverage options readily available on property and business center services can make a significant difference for individuals relocating.” And while alternative housing options present more unknowns, guests at extended stay hotels may be more at ease knowing that hotels have security processes in place.

Goswami says it has been WWStay’s experience that employees are happy with a long-term hotel for a certain period of time (a few weeks to a month), but past that point prefer to have more formal long-term housing, such as apartments or condominiums.

“Long-term hotels are typically in busier locations, close to restaurants and other shopping,” he says. “The cons for long-term hotels are overall that they offer less space than an apartment, are located in high traffic areas, and provide limited to no green space access.” On the other hand, he says long-term housing typically provides larger spaces in less-trafficked areas with amenities desired by most.

Therefore, he concludes, the suggestion in general is, the longer the stay, the more desirable the long-term housing option.

However, companies looking for more options, greater flexibility and increased value are expanding their search by looking at extended-stay properties, as well as furnished and serviced apartments which can provide a better experience for the guest who seeks a more home-like environment.

“Around the globe, Oakwood offers furnished and serviced apartments in multiple locations, providing relocated employees choice in terms of the location that works best for them, such as being close to their work, preferred neighborhood or schools,” Moore says. “Travelers tell us they feel like a local, enjoying their own apartment and starting to become a member of the community. As expected, costs can be more manageable, too.”

Rogers believes there are many more benefits to a corporate apartment stay. “For anyone coming in from another country, especially government-sponsored internships or someone doing a knowledge transfer, the focus is more to create a residential experience and a home away from home environment,” she says.

The Stay Is the Experience
 Changing market demographics and new housing options are shifting the playing field for employee mobility, and the bar is getting ever higher for a positive relocation experience.

“Companies that have not invested in technology, process improvement and a true discipline to understanding theirs and their customers’ data will find themselves struggling to keep up,” Curtis says. “RESIDE’s investment in our 3SIXTY platform, which melds state-of-the-art alternative lodging sourcing, workflow and BI technology, has been built to allow our customers flexible, vetted solutions to help them navigate the volatile landscape ahead of them.”

Moore notes a successful relocation experience must achieve three objectives: It has to deliver value and focus on productivity to allow relocated employees and their families to settle quickly; it should support the evolving lifestyle needs of relocating employees, providing them with a positive first impression of their employer and reduce the stresses often associated with relocation; and it must meet safety and business continuity standards.

“This is an ongoing dialogue we have with our clients, and we frequently look for opportunities to share client input and experiences with Oakwood executives, in order to improve our ability to meet clients’ ever-changing needs,” Moore says.

Goswami says that when companies are investigating the possibilities for relocation housing, the complete cost/option matrix is very large and complex. Therefore, it is imperative to understand the client’s needs at the beginning.

“This allows the viable options in terms of location, amenities and cost to be presented succinctly,” he says. “The goal is to best meet the requirements of the employer and the employee within the allowable budget. Only in parsing all the options can this be done effectively.”