financial · the real estate portion of the financial sector is also increasingly influenced by...

Industry Profile

DOMESTIC U.S. RELOCATION POLICY & PRACTICES

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07

FINANCIALBanking, Finance, Insurance, Real Estate

®

CARTUS | 2017 DOMESTIC U.S. POLICY & PRACTICES SURVEY | INDUSTRY PROFILES: FINANCIAL 2

I N D U S T R Y P R O F I L E S : F I N A N C I A L

Industry Profiles examine the ways that individual industries approach key program practices and assignment policy features, based on data gathered in the

2017 Domestic U.S. Relocation Policy & Practices Survey.

Fourteen percent of the 141 respondents to Cartus’ 2017 Domestic U.S. Relocation Policy & Practices survey are companies in the Financial industry. Volume concentrations for Financial companies mirror that of companies overall, with the highest concentration of moves between 101-250 moves per year. The gender of transferring employees was 74% male.

OVERVIEWCompanies within the financial, banking, insurance, and real estate segment have wrestled with a fairly unenergetic economy, historically low interest rates, and a stiff regulatory environment. The current presidency and Republican-controlled Congress is generating a level of uncertainty around the future of some of the controls set forth in the Dodd-Frank act. While the legislation may not be repealed, there could be significant revisions to many of its provisions.

Financial institutions face the need to adapt to a changing landscape, or risk extinction. There is a need to become more agile with a greater digital presence. Under increased competitive pressure, companies within this market segment are identifying ways to leverage technology to improve customer service, increase efficiency, simplify operations, and make better use of available data. This transformation may require some new ways of thinking about culture and talent in their organization.

The real estate portion of the Financial sector is also increasingly influenced by advancements in technology and significant demographic shifts. These shifts include growth in urbanization, differing lifestyles of Millennials, and the continued influence of Baby Boomers.

While relocation costs were considered the biggest challenge in the Financial industry, they were followed closely by measuring ROI, the need for flexibility in relocation policy, and recruiting and talent development.

PolicyTwenty-five percent of Financial sector respondents utilize a menu-driven approach to policy design, and budget is the driving force behind the selection of provisions. When asked about the drivers for using flexible policy approaches, the top three were reported to be cost control, attracting qualified candidates, and the changing needs of the employee, all named by 50% of Financial sector companies.

Financial sector companies are looking for ways to leverage technology to:

• Improve customer service

• Increase efficiency

• Simplify operations, and

• Make better use of available data.

The top drivers for using flexible policy

approaches for Financial sector companies are cost

control, attracting qualified candidates, and the

changing needs of the employee.

3 INDUSTRY PROFILES: FINANCIAL | 2017 DOMESTIC U.S. POLICY & PRACTICES SURVEY | CARTUS


The percentage of Financial sector companies with four or more tiers in their programs is slightly higher than overall companies (59% versus 52%). When looking at how policy tiers are defined, 81% of Financial sector companies defined tiers by employee level, a little bit ahead of overall industries at 76%. Financial sector companies defined policy tiers by move purpose nearly three times as often as all other industries.

Guaranteed Offer and Buyer Value Option are offered equally by 53% of the companies, which may indicate the need for Financial sector companies to attract qualified candidates. Also, far more companies in this sector offer 100% loss on sale than all other industries (60% versus 35%).

High Cost AreasVery limited assistance is offered by Financial sector companies for high cost areas. A mere 5% of companies offer any assistance, and that is in either mortgage subsidies (11%), reflected in compensation (5%), or increased lump sum or miscellaneous expense allowances (5%).

Short-Term and Rotational AssignmentsSeventy-four percent of Financial sector respondents utilize short-term assignments, and 37% offer rotational assignments, with the vast majority of companies having a distinct rotational assignment policy.

Talent ShortagesThe majority of companies (74%) in the Financial sector plan to, or are addressing, talent shortages by the use of targeted recruiting, followed by increased focus on intern programs, intensified campus recruiting, and offshoring/outsourcing, all named by 44% of respondents. The theme of attracting qualified candidates is woven throughout the Financial sector.

Policy Comparison GridThis grid reflects the key elements of relocation challenge and policy, comparing Financial companies with other industries and highlighting significant differences between the two.

CHALLENGES

Relocation Challenges Financial All other industries

Relocation cost 45% 59%

Measuring return on investment (ROI) 40% 28%

Need for more flexibility in relocation policy 40% 26%

Recruiting and talent development 40% 21%

High cost areas 30% 39%

Real estate market 30% 28%

Mobility program tracking 10% 13%



POLICY

Domestic U.S. Policy Structure Design Financial All other industries

Tiered 50% 75%

Menu-driven 25% 8%

Core-flex 19% 7%

Single 6% 10%

Drivers of Flexible Policy Approaches Financial All other industries

Cost control 50% 75%

Attracting qualified candidates 50% 49%

Changing employee needs (family, spouse, elder care, etc.)

50% 41%

Reducing policy exceptions 31% 51%

Changing employee expectations (Gen X, Gen Y, Millennials, etc.)

31% 45%

CORE-FLEX POLICY

Primary Core versus Flex Elements

Financial All other industries

Core Flex Core Flex

Tax assistance 57% 43% 83% 17%

Miscellaneous allowance 57% 43% 73% 27%

Final trip 50% 50% 61% 39%

Household goods shipment 44% 56% 71% 29%

Temporary living 33% 67% 64% 36%

House hunting 29% 71% 59% 41%

Storage of household goods 22% 78% 79% 21%

Return trips 17% 83% 38% 62%

Rental assistance 14% 86% 50% 50%

Car shipment 12% 88% 59% 41%

Duplicate housing 12% 88% 26% 74%

Guaranteed buyout 0% 100% 30% 70%

Buyer Value Option 0% 100% 53% 47%

New home purchase closing costs 0% 100% 57% 43%

Lease breakage 0% 100% 55% 45%

Home sale incentive 0% 100% 25% 75%

Loss on sale 0% 100% 13% 87%

Rationale for Determining Core & Flex Elements

Financial

All other industries

Budget 55% 49%

Move purpose 36% 32%

Employee level 36% 63%

Move type (e.g., homeowner, renter) 18% 61%



HOME SALE

Primary U.S. Home Sale Program Financial All other industries

BVO without sunset 53% 37%

Guaranteed offer/buyout 33% 28%

Direct reimbursement 7% 7%

None 4% 11%

BVO with sunset (guaranteed offer after a set period of time)

0% 15%

By exception 0% 1%

Changes in Past Two Years to Home Sale Policy/Program

Financial


No 63% 62%

Yes—policy design—added/changed existing program options or core-flex policy provisions

21% 17%

Yes—policy design—added/changed tiers 11% 21%

Yes—added or changed lump sum policy 11% 7%

Yes—changed home sale program type from buyout to BVO

5% 7%

Other 5% 9%

BUYER VALUE OPTION


Offer BVO 53% 67%

Sunset Clause for BVO Program Financial All other industries

No 100% 74%

Yes 0% 26%

GUARANTEED BUYOUT


Offer guaranteed buyout 53% 50%

Eligibility Determined for Guaranteed Buyout Program

Financial


By level 80% 63%

By exception 20% 7%

By hire status 0% 24%

All homeowners 0% 13%



LOSS ON SALE

Offer Loss on Sale Support Financial All other industries

No 66% 35%

Yes, varies by employee level 17% 26%

Yes, offer on exception basis only 17% 14%

Current employees only 0% 8%

Yes, for all employees 0% 11%

Case-by-case 0% 6%

RENTER-LEASE CANCELLATION

Offer Lease Cancellation Support Financial All other industries

Yes 68% 85%

Yes, by exception 21% 9%

No 11% 6%

HIGH COST AREAS

Allowance for Higher Living/Housing Costs Financial All other industries

No, we don’t provide COLA 89% 44%

Reflected in compensation 5% 3%

Increases in lump sum or miscellaneous expense allowance (MEA)

5% 1%

Yes, we provide COLA via a formal policy 0% 30%

Yes, we offer on a case-by-case basis 0% 9%

Yes, we provide COLA via a formal policy excluding new hires

0% 7%

Mortgage Subsidy Provided Financial All other industries

No 89% 74%

Yes 11% 22%

Yes, by exception only 0% 4%

Rental Subsidy Offered Financial All other industries

No 85% 82%

Yes, depends on employee level 5% 8%

Yes, for all renters 5% 5%

Yes, by exception 5% 5%



SHORT-TERM ASSIGNMENTS

Organization Uses U.S. Domestic Temporary/Short-Term Assignments

Financial


Yes 74% 60%

No 26% 40%

Change Expected in the Use of U.S. Domestic Temporary/Short-Term Assignments Over the Next Two Years

Financial


Stay the same 50% 53%

Increase 50% 39%

Decrease 0% 5%

ROTATIONAL

Use of U.S. Rotational Assignments Financial All other industries

No 63% 64%

Yes 37% 36%

Change Expected in U.S. Rotational Assignments Over the Next Two Years

Financial


Stay the same 71% 52%

Increase 29% 42%

Decrease 0% 6%

Formal Policy for U.S. Domestic Rotational Assignments

Financial


Yes 71% 49%

No 29% 31%

No, rotational assignments are done on a case-by-case basis

0% 20%

INTERNS

Relocation Program for Interns Financial All other industries

No 63% 65%

MBA/Graduate interns 37% 19%

College interns 26% 33%



TALENT

Strategies for Overcoming Talent Shortages Financial All other industries

Targeted recruiting 67% 67%

More focus on intern programs 44% 33%

Intensified campus recruiting 44% 42%

Offshoring/outsourcing 44% 4%

Enriching relocation packages on a case-by-case basis/approving exceptions

33% 18%

Sign-on bonuses 33% 51%

Recruiting from other countries 33% 9%

Offering short-term/temporary assignments 33% 11%

More local training 11% 11%

Enriching relocation packages across the board 0% 2%

Companies Using Different Approaches to Manage Millennials

Financial


No 78% 75%

Yes 22% 25%

Strategies Implemented to Retain Millennial Talent

Financial


More rotational/developmental assignments 100% 64%

Short-term temporary assignments 75% 56%

Flexibility (e.g., working remotely, flexible work hours, etc.)

50% 76%

Providing mentors 25% 68%

Developmental training 25% 52%

More investment in technology 25% 28%

Offering more special projects 0% 32%

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Cartus’ Industry Profiles series contains the following eight industry sectors. For these reports

and other Cartus research studies, including information on policy comparisons by industry,

please contact your Cartus representative or visit our Resource Hub on cartus.com.

Industry Description

FINANCIALBanking, Finance, Insurance, Real Estate

PHARMAPharmaceuticals, Healthcare

CONSUMER GOODSConsumer Goods, Food & Beverage

RAW MATERIALSEnergy, Utilities, Mining, Forest Products

MANUFACTURING/ CONSTRUCTIONManufacturing, Machinery, Aerospace, Instruments, Construction, Engineering

SERVICE/MEDIABusiness Services, Hospitality, Entertainment, Telecommunications, Media

OIL & GASPetroleum Products, Gasoline

TECHTechnology, Electronics, Computers, Software

Survey Report

DOMESTIC U.S. RELOCATION POLICY & PRACTICES

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