manufacturing/ construction - cartus · 2017. 11. 15. · industry profile domestic u.s. relocation...

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Industry Profile

DOMESTIC U.S. RELOCATION POLICY & PRACTICES

21

07

MANUFACTURING/CONSTRUCTION

Manufacturing, Machinery, Aerospace, Instruments, Construction, Engineering

CARTUS | 2017 GLOBAL MOBILITY POLICY & PRACTICES SURVEY | INDUSTRY PROFILES: MANUFACTURING/CONSTRUCTION 2

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

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.

Thirty percent of the 141 respondents to Cartus’ 2017 Domestic U.S. Relocation Policy & Practices survey are companies in the Manufacturing/Construction industry. Volume concentration for Manufacturing/Construction companies mirrors that of companies overall, with the highest concentration of moves between 26-100 moves per year, and the gender of transferring employees was predominantly male (73%).

OVERVIEWThe U.S. manufacturing segment played a central role in the 2016 presidential campaign as concerns were raised regarding the number of manufacturing and factory jobs leaving the U.S. However, the same market forces that had pushed American jobs overseas may be bringing some of those jobs back. Recently, labor costs in places such as China have been rising, and when paired with high international shipping costs, many companies are finding offshore production presents less of a discount than it once did. In addition, bringing manufacturing jobs back to the U.S. is often beneficial to a company’s public image. In the era of instant gratification, in which consumers expect a quick, almost instantaneous, turnaround on products, it is more practical for companies to manufacture products in the U.S. to make its products ready for consumers faster and avoid shipping expenses, coupled with a growing preference for American-made products.

ChallengesGeographic and philosophic influences are reflected in the Manufacturing/Construction industry responses to the survey questions on challenge areas and policy design. While high cost areas was rated as a challenge by this sector approximately on par with companies overall, concern with real estate was twice as high (51% for Manufacturing/Construction versus 26% for overall). This does illustrate that real estate, while it has somewhat recovered on a broad level, is still a very local issue. Typically, Manufacturing/Construction activities are in rural or suburban areas where there are still many sluggish markets, causing some difficulties for employees.

This sector listed need for more flexibility as their fourth most significant challenge, twenty-four percentage points higher than other industry sectors. The fact that this sector typically has fewer tiers in their policies than other sectors could be an indication that they will begin looking to adding a tier, or turning to core-flex as an additional avenue to provide flexibility with cost control.

Real estate concern was nearly

twice as high for Manufacturing/

Construction companies compared to all other industries.

3 CARTUS | 2017 GLOBAL MOBILITY POLICY & PRACTICES SURVEY | INDUSTRY PROFILES: MANUFACTURING/CONSTRUCTION


Policy DesignMirroring this, the Manufacturing/Construction sector sees recruiting as more of a challenge than other sectors (32% versus 23%), and is also more concerned with flexibility in policy design. This sector is experiencing challenges with recruiting and retaining strong talent, and encouraging them to take transfer opportunities. Similarly, recruiting is considered more critical than measuring return on investment in this market segment.

Interestingly, when asked about what is driving the need for flexibility in policy design, employee needs (at 28%) were far behind both cost issues and reducing policy exceptions (both at 67%). This is likely an indication that, while the sector needs to be able to offer more flexibility, it understands that doing so by exception is only pushing costs up—a common but undesirable outcome. The need for flexibility to respond to exceptions is almost double that of overall respondents (67% versus 35%).

Manufacturing/Construction participants have also changed their policies more frequently than overall respondents—another indication of the sector’s focus on incorporating formal flexibility into their policy approaches.

The percentage of Manufacturing/Construction sector companies with four our more tiers in their program is slightly less than overall companies (56% versus 60%). When looking at how policy tiers are defined, 58% of Manufacturing/Construction sector companies defined tiers by employee level, far behind overall industries at 95%.

Primary Home Sale ProgramsPrimary home sale programs utilized by the Manufacturing/Construction industry further highlights the market demands on this segment. The utilization of the guaranteed buyout program was more common in this segment than among respondents overall; again, an indicator of the real estate market and the need for being able to entice the right talent, at the right time, to the right location. When offered, the Buyer Value Option with sunset was more prevalent in this sector, perhaps an indication of the awareness of compliance needs.

Loss on SaleSeventy-three percent of Manufacturing/Construction industry companies offer some form of loss on sale protection, compared to 52% of the combined other market segments. This again is seen as an indicator of the real estate market constraints still felt in this market segment. More Manufacturing/Construction sector companies cover 100% of loss on sale (42%), versus all other industries (35%). A slightly higher percentage of Manufacturing/Construction companies also offer mortgage subsidy assistance (28% versus 17% overall).

The fact that this sector does not provide cost of living allowance (COLA) at the same rate as other sectors may be a reflection of the fact that their real estate issues are not only about employees dealing with high cost locations, but rather simply difficulties with selling their homes in markets that are still challenged.

The Manufacturing/Construction sector

is experiencing challenges with

recruiting and retaining strong talent, as

well as encouraging them to take transfer

opportunities.

73% of Manufacturing/

Construction companies offer some

form of loss on sale protection.



Talent ShortagesWhile this sector reports talent shortages more than other sectors, they also report higher percentages than any other sector in specific strategies to overcome talent shortages—for example, targeted recruiting (76% versus 58%), sign on bonuses (62% versus 39%), and more campus recruiting and intern programs. Significantly, they are much lower in terms of enriching relocation packages on a case-by-case basis (10% versus 27%), strongly underlining their awareness of the negative impacts of exceptions in terms of cost increases.

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

CHALLENGES

Relocation ChallengesManufacturing/

Construction All other industries

High cost areas 59% 64%

Real estate market 51% 26%

Relocation cost 41% 18%

Need for more flexibility in relocation policy 38% 14%

Recruiting and talent development 32% 23%

Mobility program tracking 27% 23%

Measuring return on investment (ROI) 16% 9%

POLICY

Domestic U.S. Policy Structure Design

Manufacturing/Construction

All other industries

Tiered 79% 70%

Menu-driven 9% 11%

Core-flex 7% 10%

Single 5% 9%

Drivers of Flexible Policy Approaches

Manufacturing/ Construction


Cost control 67% 62%

Reducing policy exceptions 67% 35%

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

44% 36%

Attracting qualified candidates 33% 49%

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

28% 44%



CORE-FLEX POLICY

Primary Core versus Flex Elements



Core Flex Core Flex

Miscellaneous allowance 91% 9% 64% 36%

Household goods shipment 85% 15% 68% 32%

Tax assistance 82% 18% 77% 23%

Lease breakage 75% 25% 35% 65%

Final trip 75% 25% 53% 47%

Buyer Value Option 73% 27% 33% 67%

New home purchase closing costs 73% 27% 38% 63%

Storage of household goods 69% 31% 46% 54%

House hunting 67% 33% 50% 50%

Car shipment 67% 33% 46% 54%

Temporary living 62% 38% 58% 42%

Rental assistance 58% 42% 40% 60%

Return trips 46% 54% 31% 69%

Loss on sale 30% 70% 4% 96%

Guaranteed buyout 22% 78% 24% 76%

Duplicate housing 22% 78% 23% 77%

Home sale incentive 13% 88% 23% 77%

Rationale for Determining Core & Flex Elements



Employee level 80% 56%

Move type (e.g., homeowner, renter) 70% 51%

Budget 50% 56%

Move purpose 40% 33%

HOME SALE PROGRAMS

Primary U.S. Home Sale Program

Manufacturing / Construction


BVO without sunset 35% 40%

Guaranteed offer/buyout 33% 26%

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

20% 9%

Direct reimbursement 5% 8%

None 4% 17%

By exception 3% 0%



Changes in Past Two Years to Home Sale Policy/Program



No 53% 81%

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

30% 18%

Yes—policy design—added/changed tiers 25% 17%

Yes—added or changed lump sum policy 13% 8%

Other 5% 8%

Yes—changed home sale program type from buyout to BVO

3% 4%

Guaranteed Buyout



Offer guaranteed buyout 60% 39%

Eligibility Determined for Guaranteed Buyout program



By level 62% 68%

By hire status 35% 26%

All homeowners 4% 16%

By exception 0% 5%

LOSS ON SALE

Offer Loss on Sale Support



Yes, varies by employee level 37% 43%

No 27% 48%

Yes, offer on exception basis only 22% 30%

Current employees only 22% 5%

Yes, for all employees 19% 18%

Case-by-case 0% 5%

RENTER-LEASE CANCELLATION

Offer Lease Cancellation Support



Yes 87% 80%

Yes, by exception 10% 8%

No 3% 12%



HIGH COST AREAS

Allowance for Higher Living/Housing Costs



No, we don’t provide COLA 46% 58%

Yes, we provide COLA via a formal policy 33% 24%

Yes, we offer on a case-by-case basis 15% 8%

Reflected in compensation 5% 2%

Incresed in lump sum or miscellaneous expense allowance (MEA)

0% 2%

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

0% 8%

Mortgage Subsidy Provided



No 72% 78%

Yes 28% 17%

Yes, by exception only 0% 5%

Who is Eligible for Mortgage Subsidy



All current employees 50% 50%

By policy tier 50% 44%

New hires, at the same level as for current employees

10% 28%

All employees eligible, by exception only 10% 11%

Rental Subsidy Offered



No 74% 86%

Yes, depends on employee level 13% 5%

Yes, for all renters 8% 4%

Yes, by exception 5% 5%

SHORT- TERM ASSIGNMENTS

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



Yes 64% 61%

No 36% 39%

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

Manufacturing /

Construction


Stay the same 56% 51%

Increase 40% 41%

Decrease 4% 8%



ROTATIONAL ASSIGNMENTS

Use of U.S. Rotational Assignments



No 53% 70%

Yes 47% 30%

Change Expected in Rotational Assignments Over Next Two Years



Stay the same 56% 56%

Increase 44% 36%

Decrease 0% 8%

Formal Policy for U.S. Domestic Rotational Assignments



Yes 39% 63%

No 33% 29%

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

28% 8%

INTERNS

Relocation Program for Interns



No 69% 62%

College interns 31% 33%

MBA/Graduate interns 13% 26%

TALENT

Experience Talent Shortages in Canada in Past Two Years



Yes, somewhat 51% 40%

No 35% 54%

Yes, significant 14% 6%



Strategies for Overcoming Talent Shortages



Targeted recruiting 76% 58%

Sign-on bonuses 62% 39%

Intensified campus recruiting 52% 36%

More focus on intern programs 48% 27%

Offering short-term/temporary assignments 14% 15%

More local training 14% 9%

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

10% 27%

Offshoring/outsourcing 10% 12%

Recruiting from other countries 0% 21%

Enriching relocation packages across the board 0% 3%

Company Using Different Approaches to Manage Millennials



No 68% 79%

Yes 32% 21%

Strategies Implemented to Retain Millennial Talent



More rotational/developmental assignments 92% 53%

Providing mentors 83% 47%

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

75% 71%

Short-term temporary assignments 67% 53%

Developmental training 50% 47%

Offering more special projects 50% 12%

More investment in technology 25% 29%

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Survey Report

DOMESTIC U.S. RELOCATION POLICY & PRACTICES

21

07

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

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manufacturing/ construction - cartus · 2017. 11. 15. · industry profile domestic u.s. relocation...

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