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2024 Forum for Expatriate Management | Americas EMMAs

AltoVita and NEI Winners: Best Partnership Between Two Service Providers  

Dallas, TX May 23, 2024 – NEI Global Relocation, in partnership with AltoVita, is proud to announce that they have been awarded the "Best Partnership Between Two Service Providers" award. This esteemed award recognizes our joint efforts in aligning our culturally driven mission and commitment to providing extensive global mobility support with a customer-centric, technology-enabled experience, demonstrating excellence in global mobility.

The "Best Partnership Between Two Service Providers" award, presented by Forum for Expatriate Management (FEM) honors outstanding achievements and innovation in our industry. NEI and AltoVita stood out among numerous contenders for their innovative approach and impactful results in corporate accommodations.

The technology teams from both companies co-designed multiple solutions encompassing API connectivity, AI in relocation, and price forecasting. The collaboration has strengthened reporting on accommodation spend and ESG metrics through the AltoInsights reporting dashboard and feedback sessions.

Guidance from NEI’s Global Service Partner Relations team, particularly from Lonn Kammeyer (Senior Manager | Service Partner Relationship), has been invaluable in enhancing AltoVita's cost-saving analytics and providing market insights, ensuring clients receive the best value in accommodation costs.

Randy Wilson, CEO / President of NEI, expressed her pride in this achievement, stating, “We are thrilled to receive the 'Best Partnership Between Two Service Providers' award in alliance with AltoVita. Thank you for the collaboration, partnership and, contributing significantly to the win. This award is a testament to the dedication and hard work of both our teams, and it highlights the strength of our partnership.”

Additionally, Karolina Saviova, Co-Founder / COO, AltoVita added, “Winning the 'Best Partnership Between Two Service Providers' award alongside NEI is an honor. Our combined expertise and shared vision are a testament to our passion, hard work, commitment, and strong partnership. Our partnership has allowed us to achieve remarkable outcomes, and this recognition underscores the value of our collaboration. We look forward to continuing our partnership and driving further innovation in global mobility.”

Read more about the event.

About NEI Global Relocation

NEI Global Relocation is a full-service, global relocation and assignment management company headquartered in the U.S. with regional offices and teams in Switzerland and Singapore.

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Baltimore's Francis Scott Key Bridge Collapse Update

On 26 March, the Francis Scott Key Bridge in Baltimore, Maryland collapsed after one of its pillars was struck by a container ship. Vessel traffic into and out of the Port of Baltimore was suspended until further notice, but the port is still open for truck transactions.

Bridge Collapse Continues to Disrupt Relocation Supply Chain

The closure of the Port of Baltimore, which ranks ninth in overall US trade volume, has significantly impacted the international trade traffic it processes. In 2023, the Port set a record for handling international cargo, with 52.3 million tons valued at nearly $81 billion.

The bridge collapse continues to cause disruptions to supply chains both in the immediate area and across stretches of the country:

  • Cargo, which would otherwise have passed through Baltimore, will continue to be discharged at alternative ports (such as New York, Newark, Norfolk, VA and Brunswick, GA) and will reach its destination by truck or rail.
  • Delays and/or restrictions should be expected on any shipments to/from the Port of Baltimore as well as at nearby ports.
  • Freight rates have increased.

Port officials have said that a temporary channel (about 35 feet deep and 280 feet in length) created by the US Army Corps of Engineers is progressing and that the Port of Baltimore may be fully operational to ocean vessel traffic by early June.

Supply chains have faced mounting pressures from various sources, including incidents in the Red Sea and low water levels in the Panama Canal. The closure of the channel leading from the Port to the seas underscores the fragility of today's supply chain, especially after pandemic-related disruptions in shipping from 2020 to 2022. Unfortunately, the loss of maritime traffic in Baltimore is estimated to cost the US economy about $9 million each day.

“As long as the port is not fully functioning, the impact will be felt all over,” said Maryland Governor Wes Moore.

Future Relocation Updates As Needed

NEI will continue to monitor the situation, provide updates, and keep clients advised of any specific shipments affected. We will also provide updates on future shipments and how the situation impacts the supply chain as we learn more.

If you have questions, please contact your NEI Representative  at 800.533.7353 any time.

This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors before engaging in any transaction.

Tax Treatment of Housing and other Expenses for Interns vs. Short-term Domestic Assignees

While preparing for intern season, we were asked recently to explain why housing and other expenses, like traveling to and from the job location, are taxable for interns and not necessarily taxable for employees on domestic short-term assignments when they are both only temporary work situations. With the busy summer intern season upon us, we thought it might be a good time to revisit the subject.

The tax treatment of housing and other benefits for interns versus short-term domestic assignees are actually very different due to the specific tax rules and regulations that apply to each group. Here's a general explanation of why there are differences in tax treatment:

Interns

Interns are typically considered employees, even if they are temporary or part-time. As employees, any compensation or benefits they receive from their employer, including housing and travel, are generally considered taxable income.

Short-Term Domestic Assignees

Employees on short-term domestic assignments may be deemed to be on a temporary duty assignment away from their tax home. The IRS allows employers to provide tax-free housing, travel, and certain other expenses as a business expense, provided certain conditions are met:

  • The employer must expect the assignment to last for less than one year.
  • The minute an employer determines the assignment is going to extend longer than a year, the reimbursed expenses from that point forward become a taxable benefit to the employee.
  • The employee must maintain a tax home at a regular place of business or employment.
  • The temporary assignment must be away from the tax home, generally requiring the employee to work in a different location for a temporary period.

The Crucial Difference: Tax Home

According to Mark Tirpak, Managing Director with Global Tax Network, the major difference between the two is their “tax home”. Interns will presumably not be incurring accommodation costs in a place that is away from their “home” – i.e. principal place of employment – as they will not have a principal place of employment (i.e. tax home) other than the location where they are undertaking the internship.  Their tax home is the location of the internship, so away from home rules applicable for assignees do not apply for interns.

There are conditions, however, where  the value of housing could be excluded from an intern’s gross income if the following three requirements are met:

  • The employee is required to accept such housing as a term and condition of employment; and
  • The housing is located on the business premises of the employer; and employer-provided
  • The housing is furnished for the convenience of the employer.

Unless all 3 of the above requirements are met, the employer-provided housing is taxable.  

Please reach out to your NEI representative if you need support with your intern or assignment programs, or with assistance sourcing a tax firm. The tax treatment of housing and other benefits can be complex and may depend on various factors, including the specific terms of the assignment, the tax laws of the country or jurisdiction in question, and any applicable tax treaties or agreements. Therefore, it's always advisable to consult with your tax firm to understand the tax implications of housing and other benefits for interns in your specific situation.

The above article is provided for informational purposes only. Please consult your tax, legal, or accounting advisors before making any decisions or transactions.

What is the Latest?

On 3 April 2024, Taiwan experienced a 7.4-magnitude earthquake, the strongest seismic event to hit the island in 25 years. The epicenter was on the east coast of Taiwan, near Hualien, a city of 100,000 inhabitants located one hundred miles from the capital of Taipei to the north.

The primary issue centers around the safety of individuals. Tragically, it claimed at least ten lives, left 15 individuals unaccounted for, 1,000 wounded and over 705 trapped, according to the most recent reports.

The earthquake’s effects were extensive in Hualien County with reports of collapsed buildings and thousands of residences without electricity. Landslides and rockfalls prompted the shutdown of a key highway. Taiwan’s Central Weather Administration continues to report aftershocks across the island today.

Relocation Impact

Regarding the event’s impact on relocation, as of now, service partner Interconex, Inc. reports being fully operational, but we are cautioned to expect some potential delays, particularly concerning global supply chains and Taiwan’s semiconductor industry.

This situation is evolving and we will continue to provide updates as needed. NEI and our service partners will keep clients advised of any specific shipments affected, as well as an update on future shipments and how the situation impacts the supply chain as we learn more.

If you have any question about this situations, please contact your NEI Client Relations Manager at 800.533.7353 at any time.

This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors before engaging in any transaction.

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The Talent Shortage is Not Temporary

“Manufacturers are expected to face economic uncertainty, the ongoing shortage of skilled labor, lingering and targeted supply chain disruptions, and new challenges spurred by the need for product innovation to meet company-set net-zero emissions goals.” ~ Deloitte

Manufacturing accounts for about 11 percent of U.S. GDP and employs approximately 8 percent of the U.S. workforce, but U.S. manufacturing jobs have declined from 19.6 million in 1979 to nearly 13 million by November 2022 – a significant 56 percent decrease when adjusted for population growth.

Yet, as of August 2023, 616,000 U.S. manufacturing job openings are still needing to be filled. The industry’s talent shortage, per Betterworks Engage, can be attributed to:

  • Outdated perceptions that manufacturing jobs aren’t safe, clean, or progressive
  • Misconceptions by younger generations that manufacturing lacks competitive wages
  • Perceived lack of investment in employee growth and development
  • Not enough STEM graduates with specific skill sets and abilities to meet demand
  • A quarter of the industry’s skilled worker base retiring, with more to come in the next decade

In fact, 77% of manufacturers say this shortage is not temporary and there will be ongoing difficulties attracting and retaining workers in the industry.

The manufacturing skills gap in the U.S. could result in 2.1 million unfilled jobs by 2030, according to a study by Deloitte and The Manufacturing Institute. The cost of those missing jobs could potentially total $1 trillion in 2030 alone. This is true for both talent skilled in the design and operation of old and new machinery, as well as the usual positions that are always needed across manufacturing companies to conduct business.

To attract new talent from various sectors, manufacturers must bridge the gap between the expectations of job seekers and the reality of manufacturing jobs, as highlighted by a Deloitte Global Human Capital Trends study. It's crucial for these companies to focus on widening their talent pool, fostering inclusive work environments, and committing to ongoing skill development to ensure future success.

Key Findings from NEI’s Global Relocation’s 2023 All Benefits Survey

To address these shortages, manufacturing industry Talent Management and HR teams will have to evolve and maximize relocation efficiency and effectiveness to secure talent and retain employees. This starts with examining the benefits used today and ensuring they are ready for tomorrow.

Notable findings from Manufacturing companies participating in NEI Global Relocation’s 2023 U.S. Domestic All Benefits Survey include the following:

Partial Lump Sum

  • Manufacturing companies tend to favor a Partial Lump Sum program to cover certain benefits such as temporary living, home finding, return trips, final move and miscellaneous expense allowance.
  • A partial lump sum was offered by 31 – 67% of Manufacturing companies (depending on employee level) as compared to 30 – 51% of participants in all industries combined.

Economic Impact on Policy

  • Unlike other industries, Manufacturing has not increased COLA, MIDA or Lease Cancellation due to economic changes, choosing instead to stay the course.
  • Many companies in NEI’s U.S. Domestic All Benefits Survey (all industries combined) have reviewed and revised policy components to adjust to the changing market.

Home Sale Trends and Responses

A strong sellers’ market over the past few years has caused many companies in multiple sectors to tighten up their home sale programs, scaling down benefits to save money without significantly impacting employees. As the market pendulum starts to swing back to the buyers’ favor, companies are beginning to consider ways to enrich their home sale programs again.

  • BVO is preferred over GBO by Manufacturing participants. BVO is offered by 7 – 47% of Manufacturing participants compared to 5 – 33% of participants in all combined industries.
  • GBO is offered by 0 – 35% of Manufacturing participants compared to 1 – 43% of participants in all combined industries.
  • Loss on Sale is offered by 0 – 20% of Manufacturing participants compared to 1 – 34% of participants in all combined industries.

Tax Treatment

  • Manufacturing participants were less likely to gross-up origination services(e.g. partial lump sum, home sale reimbursements, miscellaneous expense allowance), and yet more likely to gross-up destination services (e.g. temp living, rental finding assistance, home finding trip).
  • Of Manufacturing participants, 45% complete year-end true up calculations compared to 34% of participants in all combined industries.

In summary, manufacturing companies lean towards more conservative relocation policies, such as favoring Partial Lump Sum programs and maintaining steady course on COLA, MIDA, or Lease Cancellation policies despite economic shifts. This approach is distinct from broader industry trends, where companies are revising policies to adapt to market changes.

A company within the manufacturing sector that adopts a more robust and forward-thinking relocation policy not only differentiates itself but also has a golden opportunity to secure and retain the industry's best talent. As the landscape evolves, those willing to enhance their benefits in thoughtful ways could obtain a sizable competitive advantage.

Investing in Future Competitiveness Today: The Role of Relocation

“Manufacturing is no longer the old-fashioned assembly-line industry of yesteryear. Manufacturing today is taking center stage as an electrifying industry full of possibilities.” ~ Forbes

With expense reduction top of mind for many, it is imperative for Manufacturing companies to identify and consider cost savings opportunities, but also leverage innovative relocation services, technologies, and expertise when addressing talent needs.

NEI Global Relocation strives to be in complete alignment with each client’s priorities, business objectives, and talent management goals.

When choosing the best global relocation management partner, look for a trusted, stable firm with experienced professionals and extensive global networks. A partner that will deliver you the best return on investment, proactively advise you on current and future trends, and support your efforts to secure and relocate talented candidates.

For more information, please contact your NEI representative.

About NEI Global Relocation

NEI is a certified Women’s Business Enterprise headquartered in the U.S. with in-region offices and teams in Switzerland and Singapore. As a full service, global relocation and assignment management company that partners with clients across the globe to provide consultative guidance and solutions, NEI has over 200 clients including many Fortune 500 and Fortune 1000 corporations and we support client Tier 1 and Tier 2 supplier diversity goals each year. For more information and other articles, see www.neirelo.com.

The above article is provided for informational purposes only. Please consult your tax, legal, or accounting advisors before making any decisions or transactions.

At Least Six Individuals Unaccounted For

March 26, 2024—Early on Tuesday morning, tragedy struck as the Francis Scott Key Bridge in Baltimore, Maryland succumbed to collapse following a collision by the 10,000 container-capacity vessel “Dali” which had lost power while en-route from the U.S. to Colombo, Sri Lanka.

Regrettably, the aftermath of the incident has left at least six individuals unaccounted for. Our hearts and sympathies extend to all those affected by this unfortunate event.

The repercussions of this disaster are anticipated to cause delays and disruptions to the supply chain. The port of Baltimore is the 11th largest port in the nation and more than 52 million tons of foreign cargo, worth some $80 billion, were transported out of the port last year, according to Maryland Governor Wes Moore.

In consideration of these developments, NEI would like to communicate the latest insights provided by our household goods service partner, Champion International Moving, to help in understanding the current circumstances:

  • Vessel traffic into and out of the Port of Baltimore is suspended until further notice, but the port remains open for truck transactions.
  • Cargo that was intended for Baltimore will likely be discharged at nearby ports and reach their final destination by landside transportation.
  • The bridge (a part of Interstate 695) offered a key transport link between Washington, Baltimore, Philadelphia, and New York.
  • Delays should be expected on any household goods shipments to/from the Port of Baltimore as well as at nearby ports.

This situation is evolving rapidly, and we will continue to monitor the area and provide updates.  NEI and our service partners will keep clients advised of any specific shipments affected, as well as future shipments and the supply chain as we learn more.

If you have any questions about this situation, please contact your NEI Client Relations Manager at 800.533.7353 at any time.

This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors before engaging in any transaction.

National Association of Realtors Lawsuit Update

On March 15, 2024, a significant development unfolded within the real estate industry as the National Association of REALTORS® (NAR) disclosed a comprehensive nationwide settlement addressing commission lawsuits initiated by sellers across various states. It is imperative to note that the settlement is not final; its final approval by the court is pending, and the court is unsure when this may happen.

The proposal includes two pivotal rule changes as part of this new settlement. Firstly, NAR has committed to implementing a new regulation prohibiting compensation offers on the MLS.  With the rule change, brokers and agents must directly negotiate compensation terms with their respective clients. Secondly, agents must formalize written buyer agreements with potential buyers before facilitating property tours.

These proposed rule changes would take effect mid-July, marking a significant shift in industry practices.

Key Practice Changes:

  • Consumers retain the right to opt for cooperative compensation, provided it is pursued off-MLS through negotiations and consultations with real estate professionals.
  • A new rule barring compensation offers on the MLS will be enforced, effective mid-July 2024.

Implications:

  • Despite the prohibition of communicating compensation offers through the MLS, various avenues for compensating buyer brokers will persist.
  • Compensation for buyer brokers will remain diverse and subject to negotiation between brokers and consumers. Compensation may include fixed-fee commissions paid directly by consumers, seller concessions, or a portion of the listing broker’s compensation.
  • Negotiating compensation terms between agents and the consumers they represent will remain paramount.
  • The industry may see reduced listing commissions and buyers responsible for paying their own representative.
  • With these rapid changes to the real estate sales process, it is more important than ever to work with highly trained and qualified relocation agents for both selling and buyer.
  • This announcement heralds a significant real estate paradigm shift, necessitating all stakeholders’ adaptation and diligence.

NEI has observed more locations implementing buyer agency agreements in recent months.  We increased counseling to buyers regarding these contracts with the early rulings on the NAR lawsuits and will continue to offer support to help avoid financial surprises at closing.  

Longer term, we anticipate a need for companies to review their policies to determine any benefit changes as the impacts of these industry disruptions become clearer.  

NEI continues to monitor the situation and will offer updates to our clients as they become available. Please get in touch with your NEI representative if you have any questions or want to discuss this further.

Tackling the Talent Shortage

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“Energy markets are undergoing generational change as climate priorities influence government policy, capital allocation, and investor behavior. With the pace of energy transition, which is uneven across geographies,  businesses will face numerous challenges of identifying opportunities and risks and adapting to new policies and evolving market dynamics.” —S&P Global Commodity Insights

Energy's Economic and Employment Impact

Over the past year, the U.S. expended approximately $1.3 trillion on energy, equating to around $4,000 per person, and constituting 5.7% of GDP. The industry also employs an impressive number of Americans:

  • The oil and gas industry in the U.S. employs around 10 million people; equivalent to 6.5% of the U.S.’s total jobs.
  • Electric power generation accounts for about 5% of the overall American workforce, or nearly 7 million people and in 2023, two of every five U.S. energy sector jobs is in energy efficiency and employs 2.2 million people.
  • The number of jobs in the U.S. nuclear energy sector surpassed 5 million in June 2023, after increasing steeply since the beginning of the year.
  • 3.3 million Americans work in clean energy (renewable generation, energy efficiency, clean vehicles, battery and storage, grid modernization, biofuels), which grew 4% in 2022 and 10% since 2021.

Challenges in Talent Acquisition and Retention

Yet, the industry also faces significant challenges ahead; chief among them being the acquisition and retention of talent with the right skills. Younger employees are seeking personal fulfillment or different jobs in other industries while older employees are retiring in greater numbers every year.

“One of the biggest challenges facing the Energy industry is a lack of skilled staff,” —Brunel

Similarly, Bain Consulting reports energy companies need new skills like data analytics, software engineering, AI and machine learning, and environmental expertise.

“As the great retirement continues to cycle out a generation of seasoned experts, companies will rely on a refreshed talent base of more diverse workers—in both skills and identities—to transform the energy sector and our world,” reports Bain.

Consider these talent recruiting realities:

  • According to Deloitte, 70% of oil and gas executives surveyed said that their companies are facing a skills shortage, with engineering and technical roles being the most challenging to fill.
  • Of workers in the utilities industry, 50% are set to retire over the next decade leading to a loss of skilled field technicians, operators, engineers, managers, supervisors, and support staff.
  • The nuclear energy industry, according to a Global Energy Talent Index report, has the most sought-after energy workforce with 83% of nuclear workers being headhunted in the last year and 19% said they received 11 or more approaches by recruiters – the highest of any sector and often by companies outside the energy industry.
  • Between now and 2030, the clean/renewable energy industry will need an extra 1.1 million workers, such as engineers and electricians, to develop and construct solar and wind plants, another 1.7 million workers to maintain/operate them, and 1.3 million ‘white collar’ workers to fill other required roles per McKinsey & Co.

Investing in Future Competitiveness Today: The Role of Relocation

Energy industry Talent Management and HR teams need to constantly evolve and maximize both relocation benefits efficiency and effectiveness to secure talent and retain employees. Doing so starts with examining the benefits used today and aligning them with the needs of tomorrow.

Working with industry experts, like NEI, to modernize mobility offerings and craft comprehensive, integrated recruitment strategies can lead to an increase in candidate acceptance rates and overall satisfaction throughout their moves.

Key Findings from NEI’s Global Relocation’s 2023 All Benefits Study

Notable findings of Energy companies participating in NEI’s Global Relocation’s 2023 All Benefits Study found that Energy & Utility (E&U) companies tend to favor a partial lump sum program to cover certain benefits such as travel and temporary living. This benefit was offered by 40-70% of Energy & Utility companies (depending on employee level) as compared to 30-51% of all industries combined. The E&U participants also lean on a full lump sum program for their entry level employees, offered by 55% of companies as compared to 44% within the general population.

Home Sale Programs

  • E&U companies are more likely to offer home sale programs when compared other industries, possibly indicating significant competition for talent.
  • 70% of E&U companies utilize this for executives, versus 42% in the general population.
  • 40% of E&U companies for Director/VP level employees, compared to 25% in the general population.
  • According to the survey, seventy-four percent (74%) of E&U companies offer home sale incentive programs to executives as compared to 46% in the general population.

Loss on Sale Benefits

E&U companies offered loss on sale benefits at a rate of:

  • 74% for executives
  • 58% for Directors / VPs
  • Compared to 34% and 26%, respectively, in the general population

Market Trends and Responses

  • A strong sellers’ market over the past few years has caused many companies in multiple sectors to tighten up their home sale programs, scaling down benefits which saved money without significantly impacting employees.
  • E&U companies did not seem to follow suit, maintaining home sale programs that were in place prior to the shift—suggesting strategic benefit maintenance in a competitive job market, rather than slow adoption of new practices.

NEI anticipates companies re-adopting home sale components as the market begins to change, favoring the buyer, putting the E&U industry ahead of the curve.

Reluctance to Increase Certain Offerings

  • E&U companies were hesitant to increase their Cost-of-Living Allowance offerings, Mortgage Interest Differential benefits, and Lease Cancellation Benefits, opting to maintain similar programs as those offered pre-Covid.
  • Many companies have reviewed and revised policy components to adjust to the changing market. However, E&U companies have chosen to stay the course—waiting for the pendulum to swing back.

Shift in Policy Types

We are starting to see a shift in policy types with a noticeable portion of E&U companies adopting commuter, intern, core-flex, and U.S. domestic temporary assignment policies.

Even with these changes, the standard tiered policy structures remain in place for nearly 90% of E&U companies.

Relocation Assistance for Business Success

“Energy companies must … leverage existing knowledge while building a workforce that can address the energy demands of the nation in the future.” —Forbes

The energy industry has a long track record of solving challenges through collaboration. With expense reduction top of mind for many, it is imperative companies identify and address cost savings opportunities. This includes understanding the impact of innovative relocation services, technologies, and expertise in achieving these goals.

To that end, NEI Global Relocation stands as a strategic partner uniquely positioned to empower Energy & Utility companies in navigating the complexities of today's relocation landscape. By choosing NEI as your Relocation Management Company, you gain access to a wealth of industry-specific insights, tailored strategies, and a suite of innovative services designed to optimize relocation processes, enhance employee satisfaction, and contribute directly to your bottom line. Our proven track record, highlighted by our detailed understanding of E&U sector needs as demonstrated in our 2023 All Benefits Study, ensures that your relocation efforts are not just a response to current trends but a forward-looking investment in your company’s competitive edge.

To transform your talent mobility strategy into a powerful tool for securing the best talent and fostering long-term loyalty among your workforce, reach out to your NEI representative.

About NEI Global Relocation

NEI is a certified Women’s Business Enterprise headquartered in the U.S. with in-region offices and teams in Switzerland and Singapore. As a full service, global relocation and assignment management company who partners with clients across the globe to provide consultative guidance and solutions. NEI has over 200 clients including many Fortune 500 and Fortune 1000 corporations and we support client Tier 1 and Tier 2 supplier diversity goals each year. For more information and other articles, see www.neirelo.com.

The above article is provided for informational purposes only. Please consult your tax, legal, or accounting advisors before making any decisions or transactions.

Germany Hosts Euro 2024

As anticipation builds for Euro 2024, Europe’s premier football / soccer championship, a significant demand for accommodations is imminent. While fans eagerly book their stays, clients could face a unique challenge: navigating the higher prices and limited lodging options for relocating employees. In this article, we explore the impact of Euro 2024 on corporate accommodations and discuss strategies for clients to manage the crunch effectively.

Understanding the Demand for Host Cities

The Championship for the men’s UEFA league is held once every four years. Making Euro 2024 not just a sporting event but a cultural phenomenon that attracts millions of spectators from around the globe. Fans will assemble in ten host cities across Germany to witness a total of 49 matches and soak in the electrifying atmosphere. Consequently, the demand for accommodations will skyrocket, putting pressure on hotels, furnished apartments, and corporate housing providers.

The Corporate Dilemma

For clients with employees traveling to Euro 2024 host cities for assignment purposes, securing suitable accommodations is critical. However, the surge in demand could lead to a scarcity of available options, which could drive prices even higher and corporate clients are already facing inflated rates and limited availability, which could also challenge relocation budgets.

Strategies for Corporate Clients

  • Plan Early:   Corporate clients should start planning now to maximize their chances of securing preferred lodging options at reasonable rates. Early booking not only ensures availability but also allows for better negotiation leverage.
  • Consult with the Experts: Engaging the expertise of corporate relocation management companies like NEI can streamline the accommodation process for businesses. We specialize in navigating complex situations and can offer tailored solutions and flexibility to meet the unique needs of corporate clients amidst high-demand scenarios like Euro 2024.
  • Work with Vetted Suppliers: NEI builds and maintains long-term service partner relationships through our Global Service Partner Relations (GSPR) team. The success of our GSPR department has enabled us to work with “service partners,” not “suppliers”, who are committed to delivering “Service Exceeding Expectations”. Because of these relationships, NEI is able to negotiate competitive rates and our clients always get priority attention, including during peak seasons.

Please see the following information on key locations and dates:

EURO 2024 Schedule

Conclusion

By adopting strategic approaches such as early planning, exploring alternative options, negotiating contracts, leveraging relocation services, and prioritizing flexibility, businesses can effectively navigate the accommodation crunch and ensure a seamless experience for their traveling employees. Amid the excitement surrounding Euro 2024, clients can rise above the challenges and capitalize on the opportunities presented by this iconic sporting event.

2024 Talent Mobility Trends | Immigration and Relocation in a New Global Economy

As global economic and political landscapes continuously evolve, the relocation industry is facing unprecedented challenges and changes in priorities. Immigration and compliance issues emerge as a pivotal element, influencing and being influenced by the shifting global dynamics.

The current global economy, marked by inflationary pressures and interest rate uncertainties, has led many corporations to adopt a cautious approach. This stance is influenced not only by current and forecasted economic factors, but also by geopolitical tensions that make cross-border movements more complex. Companies focused on cost control may be hesitant to approve relocations in these conditions.

This article will cover these evolving dynamics, addressing technological advancements, and how changing work models are reshaping immigration and relocation practices globally.

The Transformative Power of Technology in Relocation

Amid these challenges, technology stands out as a beacon of progress, transforming the relocation experience for both service providers and clients.

“AI and automation technology can have a wonderful role in supporting some of the validation process in immigration, speeding up processes from what has vastly been a paper-driven process to a more digitized process,” says Michelle Moore, NEI Global Relocation’s Chief Global Mobility Officer.

From improving efficiencies behind the scenes to enabling real-time data tracking and predictive cost analysis, technological advancements are restructuring how relocation services are carried out. Integrating robotics/automation/digital platforms not only streamlines processes, but the advancements are freeing up relocation coordinators to focus more on the relational aspects of delivering excellent service, ensuring that the human element remains central to every relocation experience.

“Many countries are working to determine how to safely use technologies to support the processes while ensuring accuracy of information, preventing biases, maintaining transparency, supporting privacy and accountability,” says Moore.

Emerging Global Mobility Trends

The shift toward remote and hybrid work models is one of the most significant trends affecting the relocation industry, prompting a reevaluation of traditional relocation services.

“Employers have an increasing challenge and burden to understand where their employees are working and be responsible for compliance,” says NEI’s Moore. “Companies are trying to strike a balance in being together within a workplace and employees’ desire for more flexibility with remote options.”

This trend, coupled with the evolving expectations of the workforce regarding flexibility and well-being, is driving the industry towards more personalized and adaptable relocation solutions. “This impacts the relocation industry as it tries to develop solutions for companies seeking compliance support,” says NEI’s Moore.

As companies navigate the balance between in-office collaboration and remote work, the relocation industry is innovating to provide compliance support, tracking, and immigration services tailored to these new work models.

Another challenge for short- and long-term assignments is the need to be prepared for delays due to unforeseen global events that often occur with little to no warning, such as regional wars or hostilities, immigrant/refugee influxes, political upheaval, etc.  Additionally, underfunded government agencies often extend processing times. NEI continues to recommend companies plan assignments as early as possible.

“Pre-planning and working with your immigration contact can help [companies] better understand realistic timeframes…allowing for more flexibility. While we have seen some approvals come in quicker than expected, often additional time is required, which is disruptive to the business. It’s wise to have contingency plans for any additional time or to understand what options there might be for remote work that are not in violation of immigration, tax, or other compliance needs,” says NEI’s Moore.

Immigration at the Forefront of Relocation Challenges

Challenges such as processing delays, the impact of the pandemic on government operations, and the integration of hybrid work policies into immigration law illustrate the complex interplay between immigration and workforce mobility trends.

Economic pressures and labor market dynamics are prompting countries to adopt more flexible, skills-based immigration systems, aiming to bridge the gap between global talent needs and local labor markets. These changes, however, are not without their complexities, as mergers, acquisitions, and shifting legal landscapes pose additional compliance hurdles for companies and their relocating employees.

Governments are adjusting regulations for specific immigration routes, tightening restrictions on some while easing them on others. Consider these recent immigration changes that mirror the unique challenges encountered by each country and the diverse viewpoints held by each nation's population:

  • Japan launched a new six-month digital nomad visa
  • Australia completely overhauled its visa system, introducing a three tiered “Skills in Demand” visa
  • China streamlined and relaxed visa entry requirements
  • Canada extended its Temporary Foreign Worker program
  • Indonesia introduces new sub-types for several visas
  • As of January 2024, the UK will no longer allow dependents to travel with foreign students studying in the country

Future Direction of Global Mobility

Across the world, discussions on immigration reform will persist, highlighting the importance of flexible strategies and cooperative endeavors to navigate the intricacies of global mobility.

Companies and countries will continue to search for the best way to navigate visa and immigration complexities going forward, but proper time and effort to develop one’s relocation policies can help with immigration challenges and using the right relocation technology systems can help with immigration complexities.

“Having a strong policy and procedures documented will go a long way to ensure employees can play the role in what to do – or what not to do,” said NEI’s Moore, “but technology can make tracking easy, while supporting updates, statuses and other information needed… to maintain records within one place. This increases the ease of secure data transmission and for data to be hosted and transferred securely with any external Immigration support.“

As the industry moves forward, the ability to consistently adapt to change—while maintaining a focus on compliance and the human aspect of relocation—will be key to ensuring companies are well-poised to thrive in a global context.

Keeping You and Your Family Safe While Relocating Overseas

Moving globally brings excitement, growth, and challenges, but one must also be prepared to adapt to new surroundings and cultures while prioritizing personal health and safety. We explore important strategies and tips for employees relocating globally to navigate their new environment with confidence.

No One Plans on Safety Issues Occurring

“Safety is not a gadget, but a state of mind.” ~ Eleanor Everet, Safety Expert

It’s crucial for Human Resources professionals managing global assignments to prioritize the safety, well-being, and Duty of Care for employees/families relocating and traveling at company request to a new country. While international assignments or permanent relocations abroad offer exciting opportunities, they also require a proactive approach to ensuring personal safety.

“The mistake travelers make is believing the biggest security risk is some external force," said Adam Bardwell, a former U.S. Army Green Beret and a security operations supervisor at Global Rescue. "In reality, the biggest security risk travelers face is their poor planning, lack of knowledge about the location and ignoring indications of danger.”

Before embarking on a global move, thorough research is essential. Understanding the laws, customs, and safety concerns in the destination country lays a strong foundation for a safe relocation. Expats should familiarize themselves with local emergency contacts, crime rates, and basic phrases in the local language for effective communication in urgent situations.

  • Cultural Sensitivity: Respecting Differences

In a diverse world, understanding and respecting cultural differences is not just about etiquette; it's a fundamental aspect of personal safety.

Respecting local customs, traditions, and societal norms helps individuals avoid inadvertently placing themselves in vulnerable situations. Keen awareness of local customs or norms, such as personal space, gestures, and appropriate dress codes, etc., can foster a safer and more harmonious integration into new communities.

NEI Example – Cultural Training Success for China Joint Venture Partnership

A U.S. client promoted an employee to travel regularly to China for a new joint venture. She initially opposed any intercultural training because she had travelled to many countries prior, but the client felt the project was too critical to take any chances.

Result: The employee reported later that without the required cultural coaching sessions she could never have integrated as well or have established the local working relationships that helped the new China operations succeed. The client even approved additional coaching sessions for the rest of her assignment.

  • Destination Country Healthcare and Medical Prescriptions

Researching access to healthcare and prescription medication in the destination country, especially in remote areas, is essential to reduce health risks. Find out this information in advance of arrival, especially if there are pre-existing medical conditions that might require regular doctor visits.  If repeat prescriptions are needed, research if they can be filled abroad or whether one should stock up before departure and how much can be brought into the country.

NEI Example – Ensuring Children's Medical Needs in Jordan

NEI's Account Executive (AE) was assisting a family of four relocating on a long-term assignment to Jordan. The AE was asked to help find medical support in Jordan for the family's two children with ADHD, including acquiring medication locally.

Result: The AE adopted a dual solution approach: 1) asking our local Destination Service Partner (DSP) to assess local expertise in ADHD treatment for children; and 2) engaging the client to explore the support available from their global insurance provider. The client's global insurance provider offered access to local medical resources, ensuring the family could procure the necessary ADHD medication locally and receive ongoing treatment in Jordan. NEI’s DSP made introductions and arranged calls with local healthcare providers.

  • Practical Safety Measures for Daily Activities

As the saying goes: “Safety is No Accident.”  Implementing practical security measures for daily activities is essential. This can include being aware of surroundings, avoiding risky areas at night, and using safety apps with GPS functionalities for navigation. Additionally, relocating employees should ensure  all necessary documentation – including identification as well as emergency medical and contact information – is readily accessible.

NEI Example – Emergency After-Hours Support in Brazil

An employee who had just started an assignment in Brazil was driving home on a Friday night and, while at a red light, was held up by gun-wielding assailants demanding his wallet.  The employee was still able to drive off with his phone, but all cash and credit cards were gone. He could not reach his office, so he called his NEI Account Executive (AE) on her mobile number.  

Result: NEI’s AE immediately contacted the client’s Security Team and International SOS for assistance in the employee talking directly with his local bank as he was not fluent in Portuguese.  NEI worked with the client contact to supply him emergency cash until his credit cards could be replaced. He greatly appreciated NEI’s care and concern shown for his after-hours situation.

  • Building a Support Network in the New Community

Networking isn't just for professional advancement; it's also a crucial aspect of personal safety when relocating globally.

Establishing a support network in the new country is invaluable. Building relationships with neighbors, colleagues, or fellow expats provides a sense of community and an additional layer of safety. Joining clubs, volunteering, or participating in local events facilitates meeting new people and fostering connections for support and guidance.

NEI Example – South Korea-to-Israel Assimilation

A relocating employee, his spouse and children from South Korea accepted a long-term assignment to Israel. After arrival and being there for a few months, the family felt isolated and frustrated.

Result: Intercultural training that the employee had turned down originally was re-proposed and gratefully accepted. After completing the program, the family ventured out more and enrolled in local activities to meet people and network. The family began adjusting immediately – and even extended their Israel assignment an extra year!

  • Prioritizing Safe Accommodations and Transportation

Personal safety should never be compromised, especially when settling into a new country, and safety should be one of the top priorities to research before traveling. Knowing the plan for areas  like accommodations and transportation that will affect daily life can help make safety concerns in a new country less intimidating.

Securing excellent accommodations and reliable transportation is paramount. Choosing accommodations in safe neighborhoods and utilizing trustworthy transportation methods are crucial steps toward ensuring personal safety. Individuals should opt for reputable housing options and reliable transportation services to minimize risks. Being cautious with personal belongings, especially in public places or crowded areas, can prevent theft or loss.

NEI Example – Expectant Couple’s Health Concerns in Brazil

An employee and his wife, five months pregnant, accepted a permanent move from Buenos Aires to Sao Paulo. NEI’s Account Executive was empathetic to the couple’s requirement that any temporary living unit shown have special mosquito netting across all windows, regardless of air conditioning units in place. Initially, this request proved difficult as 1) appropriate property inventory was scarce; 2) apartments booked fast; and 3) sourcing specific netting was difficult.

Result: NEI’s Account Executive worked with our local temporary housing service partner, and once the couple selected their property, NEI and the partner immediately identified a local, trusted mosquito abatement company and had the services completed and reimbursed. The appreciative couple settled into Sao Paulo with less apprehension awaiting their newborn.

Taking a Proactive Approach

“An ounce of prevention is worth a pound of cure.” ~ Benjamin Franklin

Global relocation necessitates a proactive approach to personal safety, as situations vary and even countries with fantastic reputations for safety can be problematic.

However, preparation and simple steps can help substantially mitigate risks. Individuals can survive and thrive in a new environment confidently by:

  • performing research prior to departure,
  • prioritizing safe accommodations and transportation,
  • keeping emergency contacts’ info accessible,
  • respecting cultural/international differences,
  • implementing practical safety measures and have a ‘Plan B’, and
  • building a support network.

Always Here to Help

NEI will continue to help empower thousands of client professionals each year to embrace their global relocation experience with confidence, safety, and resilience.

If you would like to discuss global relocation and/or business travel safety or other mobility trends, please contact your NEI representative.

The above article is provided for informational purposes only. Please consult your tax, legal, immigration or accounting advisors before making any decisions or transactions.

How Foreign Exchange Rates Impact on Cost of Living Allowances

Hearing from employees who receive Cost-of-Living Allowances (COLA) on international assignments may largely depend on the untimely fluctuation of Foreign Exchange (FX) rates.

Helping Make International Assignments Succeed Financially

As global organizations increasingly compete for skilled talent, offering competitive remuneration packages becomes imperative to attract top candidates for international assignments.

However, helping assignments succeed financially remains a fundamental bottom line consideration – especially since costs in popular global host locations can be higher than in one's home country. Most international assignments would simply be financially unfeasible for employees without considerable company support.  

Providing Cost-of-Living Allowances (COLA) can be a key benefit to help assignees keep a similar standard of living and purchasing power in their host country in comparison to what they had in their home country. Researchers calculate the cost-of-living indices that analyze differences in major cities throughout the world by comparing the basic price of a basket of goods and services. These indices do not include housing costs, taxes, or education and are only used to calculate changes in disposable income.

As a note, each company chooses the specific index used for calculating COLA. Some companies offer employees a convenience index that allows them to purchase from high-cost international retailers, while other companies offer a lower index that accounts for an employee’s integration into the local culture and shopping practices.

Changes in Foreign Exchange (FX) rates significantly impact these living allowances. COLA indices are typically updated quarterly or semi-annually based on company preference, but may be reviewed more frequently in response to major FX fluctuations that result from volatility in the host or home locations.

Managing International Assignment FX Expectations

FX changes can surprise employees on international assignments when they notice a drop in their COLA, particularly as they face daily high costs in the assignment’s host location. However,  it's common for assignees to overlook two key factors:

  1. Prices for goods and services in their home country are likely increasing
  2. Their home country’s currency may also be appreciating  

Changing FX rates can adversely affect the perceived value of an assignment package. For instance, the US Dollar strengthened against the Euro in early 2021 but weakened by the end of 2022. This fluctuation, coupled with a decrease in the COLA index, can lead to reduced COLA payments for employees. An employee moving from Madison, Wisconsin to Paris, France, for example, might receive a smaller COLA than what was available the previous year. Consequently, this reduction could cause confusion and prompt the employee in Paris to request justification for the decreased COLA.

Companies are encouraged to review COLAs semi-annually at the very least and should consider conducting a more frequent review with their cost-of-living research partners should there be dramatic changes in FX rates.

While it's common for assignees to raise concerns when COLA payments decrease, the opposite scenario often unfolds in silence, as you would expect. Employees happily welcome any increase in their COLA.

Adapting to Fluctuating FX Rates

In conclusion, successful companies understand that FX rates are beyond control. They implement a clear policy for international assignees, outlining how dramatic FX rate fluctuations can impact allowances and detailing the company's schedule for making adjustments.

NEI is pleased to help answer any questions from companies or assignees about COLA or FX rates. Working alongside expert research firms, we ensure everyone understands the rationale and calculations behind revised COLA amounts.

If you would like to discuss this topic further, or other global mobility trends and company needs, please contact your NEI representative or Michelle Moore, CPA, MPA, CGMA, Chief Global Mobility Officer at NEI.

The above article is provided for informational purposes only. Please consult your tax, legal, immigration or accounting advisers before making any decisions or transactions.

Understanding Barriers and What To Do

A family’s reluctance to relocate can often stem from a variety of hesitations. Whether that be a spouse’s need to re-establish their career in the new location, loss of established social and professional networks, as well as concerns regarding children acclimating in school, activities, and friendships. As Jennipher Christensen of IPR Consulting aptly said, “Getting to... ‘what do they need and how can we help them?’ is critical in the pre-decision phase. This involves not just showcasing the new location but helping them visualize their life and addressing concerns of each family member.”

Easing the Transition

Caring for the well-being of employees and their families necessitates comprehensive policy frameworks that prioritize support and inclusivity throughout the relocation process. These services aim to minimize the challenges associated with relocation and ensure that employees can quickly adapt to their new environment:

  • Destination Services and Area Orientation: Assistance finding suitable housing, schools, transportation, banking, healthcare, and other essential services in the new location. Offered by 86% of companies for international permanent transfers, 60% for short-term assignments, and 83% for long-term assignments. Though area orientation is typically part of a home finding trip for US Domestic transfers, formalized area orientations in the US are becoming more common.
  • Cultural Training: Programs to familiarize employees with the local culture, customs, and etiquette to facilitate smoother integration into the community. Offered by 65% of companies for international permanent transfers, 70% for short-term assignments, and 82% for long-term assignments.
  • Language Support: Language training services to help employees become proficient in the local language. Offered by 62% of companies for international permanent transfers, 60% for short-term assignments, and 76% for long-term assignments.
  • Family Acclimation Assistance: Services designed to assist the spouses and families of relocating employees by addressing their specific needs and concerns. This support includes spousal career assistance, community integration, and ongoing support. Offered by 51% of companies for international permanent transfers, 10% for short-term assignments, and 61% for long-term assignments. Depending on employee level, the benefit is offered by up to 35% of companies for US Domestic transfers.

Policy Implications and Recommendations

The intricate dynamics of family involvement in corporate relocations require careful consideration of how to navigate this terrain with empathy and efficacy. Formulating actionable policy changes not only serves the immediate interests of employees and their families but also aligns with broader organizational objectives of talent retention, productivity, and corporate social responsibility.

Effective relocation policies must address various aspects of a transferee and their family’s transition. Here are some key recommendations:

  • Comprehensive Acclimation Services: Expand services to include cultural training and pre-assignment assessments. These are essential components of the relocation package.
  • NEI’s YOU Allowance: Consider introducing this flexible allowance, which can cater to the unique needs of each family.
  • Support for Single Transferees: Recognize that finding social support systems and activities through a Destination Service Provider (DSP) is as crucial for single transferees as it is for those with families.
  • Awareness of Available Services: Enhance awareness of the full range of available services, which can significantly improve the relocation experience.

Conclusion

By prioritizing comprehensive mobility programs that address the challenges faced by relocating families, employers can cultivate a culture of inclusivity and support within their workforce. As employers strive for excellence in their operations, integrating these policy recommendations can serve as a beacon of guidance, ensuring that the welfare and stability of relocating families remains at the forefront of corporate decision-making. Ultimately, relocation is about creating a supportive journey that begins well before the move and continues long after settling in, ensuring a successful transition and a rewarding experience in the new environment.

A Cultural Phenomenon Across Continents

Carnival or “Carnaval” is an annual celebration steeped in tradition, energy, and extravagance, acknowledged across the world in more than 50 countries—running from 8 February 2024 through 13 February 2024.

The word Carnival itself likely came from the Latin carne levare, meaning “remove meat,” in reference to the Christian period of Lent, a time of fasting, and marks a time of festivities, parades, masquerades, and feasting before the more solemn and reflective period of Lenten sacrifice.

For employees on international assignments, the energy and excitement surrounding Carnival can offer a memorable and enriching experience, immersing them in the cultural vibrancy, traditions, and community spirit of their host countries.

A Cultural Phenomenon

Most people will agree that Carnival is not simply another festival, but a cultural phenomenon. South America usually comes to mind as the most famous locations for celebrating the holiday with its energy and flamboyance:

  • Rio de Janeiro, Brazil is the ultimate Carnival destination and the world’s most famous celebration spot with over a million people from across the globe typically visiting to dance, sing, have fun in the streets, at the beach, and partake in the Rio Parade.
  • Salvador, Brazil’s Carnival has an African flavor with expressions of Afro-Brazilian folklore, music, and dance. Crowds dancing in the streets are fueled by the loud sounds of the region’s famous motorized floats carrying musicians and singers.
  • Bolivia’s elaborate, 10-day Oruro Carnival is so good it’s said to be one of the world’s best festivals. UNESCO has recognized it as a 'Masterpiece of the Oral and Intangible Heritage of Humanity'. The celebration lasts 20 hours and combines Indigenous and Catholic traditions with amazing parades.

Sounds exciting, but did you also know Carnival’s also celebrated in over 50 countries, each with their own unique spin on the event?

About Excess and Enjoying Life to the Fullest

For employees on assignment, Carnival can become a captivating blend of celebration and mystery, characterized by vibrant crowds, imaginative outfits, and elaborate masks. For example:

  • Basel, Switzerland is well known for its celebrations each year, rejoicing with a parade of over 20,000 noisy revelers marching through the streets and parties in the city for hours after
  • Istanbul, Turkey hosts the Baklahorani Carnival celebration featuring a masked parade through the streets and parties in the surrounding areas.
  • Santa Cruz de Tenerife, Spain boasts nine continuous days of loud, boisterous celebrations during Carnival with elaborately plumed costumes and masked merrymakers in the streets.
  • Dusseldorf, Germany’s Carnival takes place on the banks of the Rhine. It has a day of festivities dedicated entirely to family-friendly celebrations and is known for its “Rose Monday” street parade featuring colorfully decorated floats, more than 5,000 costumed performers, and capacity crowds that flood the city’s pubs and restaurants.
  • Goa, India’s Carnival has been a fixture for 500 years and includes parades, colorful costumes, music, dancing and intricate floats in the streets with many parties.
  • Venice, Italy has made it a tradition to gather with friends every Carnevale, but across the city’s piazzas, “Carnevale” draws many thousands from around the world. They don costumes and gather at pubs and restaurants, enjoying wine and cicchetti (appetizers).
  • Slovenia, where Carnival is called Kurentovanje (koo-rent-oh-VAWN-yeh), has a celebration season that culminates in the town of Ptuj where merrymaking, concerts, parades, masked balls, and kids' events last days.
  • Nice, France hosts three kinds of parades: the Bataille de Fleurs (Battle of Flowers), Corso Carnivalesque Illumine (Parade of lights) and the Corso Carnavalesque (Carnival Parade). Each float has a different theme.
  • Binche, Belgium hosts loud cultural performances and presents unexpected rituals like revelers throwing oranges for good luck while performers dress in elaborate, feathery hats.

Employees on assignment in the U.S. have access to celebrations as well, and it’s not limited to Mardi Gras in New Orleans. Cities with notable Carnival/Mardi Gras events can be found in:

  • Baton Rouge & Lafayette, Louisiana
  • Orange Beach & Mobile, Alabama
  • San Diego, California
  • Orlando, Tampa & Pensacola, Florida
  • Galveston, Texas
  • Biloxi, Mississippi
  • St. Louis, Missouri
  • Washington, D.C.

Expats Celebrating Local Culture

Carnival celebrations across the globe serve as a testament to the beauty of cultural differences coming together in a harmonious celebration.

Employees on international assignments often gain insights into the host country's culture through experiencing local Carnivals, which can add value to the overall experience while on assignment.

Often, employees on assignment will get together with locals and other expatriates to celebrate and, for employees returning from international assignments, the exposure to diverse traditions can become a cornerstone for fostering a stronger global mindset.

New holidays, traditions, and memories in assignment destination countries might be different, but with an open-mind—exploring the local holidays and traditions around the world can prove a fun, educational, and memorable experience.

Enjoy your 2024 festivities!

Chinese New Year and Relocation Service Impact

As the Year of the Rabbit comes to an end, communities around the world are looking forward to a year of prosperity and good luck as the Dragon takes its reign in the Chinese zodiac. This Lunar New Year (Chinese New Year) begins February 10th, 2024 and concludes January 28th, 2025 will be celebrated as the Year of the Wood Dragon.

The Chinese zodiac is a system that assigns an animal to each year in a repeating 12-year cycle. The Rat, Ox, Tiger, Rabbit, Dragon, Snake, Horse, Sheep, Monkey, Rooster, Dog, and Pig, each has its unique characteristics, symbolism, and cultural significance.  

Lunar New Year celebrations, including traditional lion dances, stunning parades, and family reunions with elaborate decorations and magnificent feasts, last up to 16 days. While NEI’s Singapore office will only be closed February 9th and February 12th, it’s possible you may experience other disruptions or delays in service as many of our service partner offices in mainland China and in other countries that celebrate the holiday—such as Indonesia, Malaysia, Singapore, South Korea, Taiwan, Vietnam, and Brunei—will be closed for the full extent of the public holiday from February 10th through February 16th.

Calendar of events include:

Feb 2nd – 9th

Little Year - Preparations for the new year begin on February 2nd, 2024, and last until New Years Eve.

Feb 10th – 20th

Spring Festival - Chinese New Year officially begins on February 10th, 2024, and ends on February 20th.

Feb 21st – 24th

Lantern Festival - Preparations begin the 21st, and the Lantern Festival is held on February 24th as a celebration of the end of the Chinese New Year and the start of the new year.

Maximizing Talent Through Inclusive Relocation Programs

Inclusion is more than just a catchphrase—it's a necessity today for attracting and securing a new generation of recruits. In this article, we explore the significance of inclusive relocation and the steps organizations can take to promote diversity in their global mobility programs.

Belonging, as an Outcome

“Diversity” and “Inclusion” have become common business buzzwords, but sometimes little thought is given to what they truly mean or what outcomes can be if they are prioritized.

One way to understand these concepts, as suggested by Ramona Blake in a 2023 AutoDesk article, is to consider:

  • Diversity as a mix of employees,
  • Inclusion as a proactive behavior, and
  • Belonging as an outcome.

People feel their contributions are meaningful and their ideas are important to the company’s success. This makes them feel that they are a valued and valuable part of the company’s future,” writes Blake.

In fact, more than ever, research shows that organizations with inclusive cultures are more likely to attract and retain top talent.  

In a paper from Deloitte, researchers found that out of 1,300 employees and job seekers:

  • 80% of respondents indicated inclusion is important to them when choosing an employer
  • 39% said they would leave their current organization for a more inclusive one
  • 71% said they prefer an organization that demonstrates inclusive behaviors, even if the company has inconsistent inclusive programs (as opposed to a company that has high-quality inclusion programming, but displays inconsistent inclusive behaviors)
  • 23% of respondents indicated they had already left an organization for a more inclusive one (including 30% of millennial respondents)

Inclusive Companies Perform Better

Recruiters for companies with a strong inclusion / belonging culture usually emphasize connecting with, interviewing, and hiring a diverse set of individuals through understanding and valuing different backgrounds and opinions. Not only can this help access a much broader talent pool, but it fosters a more innovative and high-performing workforce.

“Finding and hiring these employees is only the first step. For them to stay, develop their careers, and contribute meaningfully to the organization, they need to feel included,” reports consulting firm Bain & Company. Their 2023 research finds that employees who feel fully included are 14 times more likely to be promoters of their organization and up to 6 times more likely to stay with the organization.

As part of an inclusive / belonging company culture, team members are encouraged to challenge the status quo. This is critical for industries in transition. According to a September 2023 Harvard Business Review article, inclusive companies are:

  • 73 percent more likely to reap innovation revenue,
  • 70 percent more likely to capture new markets,
  • up to 50 percent more likely to make better decisions, and
  • up to 36 percent more likely to have above-average profitability.

In decades past, companies have designed “one-size-fits-all” benefits packages, but this may have inadvertently resulted in reduced access or opportunities for a wider talent pool and acceptance of company relocation offers.

To support inclusive recruiting efforts and business goals, there is a strong business case to be made for reviewing and adjusting relocation policies and benefits to address new family / employee needs and changing demographic trends.

Inclusive mobility programs recognize that the needs of a diverse group of employees differ significantly. Organizations might consider revisiting their program benefits and policy communications to ensure they reflect their companies’ inclusivity initiatives and maximize opportunities for success.

This could simply involve tweaking existing language to make it more inclusive or offering a wider, more creative range of support services tailored to today’s changing relocation needs.  For example, programs that can make a significant difference for individuals / families with different backgrounds and situations to accept a move could include.

  • providing resources for spouse / partner transition assistance,
  • addressing “sandwich generation” challenges,
  • supporting families with special needs children,
  • offering cultural and / or language training for those going to another country, etc.

Confidence and Competency is Key for Belonging

Promoting inclusion in relocation policies / programs also might involve deeper cultural understanding, so teams that regularly work across cultures and employees taking assignments to other countries would both benefit from pre-departure cultural training to ensure a seamless adaptation.

After all, employees / families asked to relocate to new cities, regions or countries may face significant lifestyle differences that may challenge their personal and professional roles daily.

For instance, even in some moves within the U.S., we are starting to see more cultural training being offered by clients for challenging relocations (e.g., small town Midwest to New York City or vice versa) where living conditions and challenges can be vastly different. Training topics can include lifestyle and cultural changes, transportation, safety, education, spouse/partner career issues, how to make new friends, how to get things done, and more.

Cultural competency training equips them with the knowledge and skills needed to navigate differences effectively. Some of the most common themes that prevent participation in employee international mobility programs include:

  • issues of cultural fit or language.
  • career concerns/dual-career concerns.
  • personal family challenges.

“Typically, the most common obstacles are visa and immigration requirements and timelines, language barriers, and cultural differences. Companies can mitigate these obstacles by planning ahead to align visa and immigration timelines with the timeline of the business need and by offering language and cultural adaptation services,” said Randy Wilson, President and CEO at NEI Global Relocation, in HRO Today Magazine.

“The fact that all employees feel valued and included in the success of the company as well as their own development is the biggest benefit to an inclusive relocation program,” said NEI’s Wilson.

Understanding and respecting different needs, cultures and challenges not only promotes inclusion / belonging, but helps:

  • build strong, collaborative teams of employees across borders and cultures; and
  • open global career opportunities for employees that never thought they would be capable of accepting an international assignment.

As highlighted in the NEI article “Helping More Women Accept International Assignments” in International Business Magazine, the faster employees and their accompanying families can adapt to new countries and cultures, the more productive employees are likely to be, increasing the chances of a successful assignment.

Such proactive assistance reduces relocating employee stress, assignment failures, and lost business opportunities for the company. Providing personalized support, services, and resources is key to accommodating varying needs. This includes local housing guidance, community information, or even mentorship programs to ensure a smoother transition for employees.

“Strength lies in differences, not in similarities.” ~ Stephen R. Covey

People want to work where they feel the organization is contributing to their growth and realization of their potential, and where they feel seen, valued, and respected and most business executives agree that the purpose of the organization should be to create value for workers as human beings.

Promoting diversity and inclusivity in relocation programs is not just a matter of corporate social responsibility, it's a strategic priority to be more competitive going forward. Whether it’s through redefining relocation programs, addressing cultural competency, or providing tailored support, organizations are taking meaningful steps that benefit companies and teams.

Tailored support initiatives contribute to a more inclusive, supportive work environment where all employees feel valued and empowered to make a positive impact.

If you would like to discuss this or any other global mobility trends or unique company challenges, please contact your NEI representative.

The above article is provided for informational purposes only. Please consult your tax, legal, immigration or accounting advisors before making any decisions or transactions.

NEI SOC 1 & 2 Audit Success - Zero Findings for the Third Year in a Row!

NEI Global Relocation is pleased to announce that our Service Organization Control (SOC 1 and SOC 2) audits achieved ZERO findings for the third year in a row and in six of the past seven years.

SOC 1 – Compliance with Financial Laws and Regulations to Combat Fraud

A SOC 1 audit is for service organizations and assesses the internal controls and procedures which are in place to protect client data and ensure controls around processes are operating as designed – more specifically related to financial reporting. A SOC 1 report validates the organization's commitment to delivering high quality, secure services to clients.

This report provides customers with an independent opinion so they can be confident that financial laws and regulations comply with corporate responsibilities to combat corporate and accounting fraud.

“With the achievement of a SOC 1 report with no findings, the NEI teams have demonstrated our ability to provide reliable and secure services to all of our clients and their relocating employees, while ensuring the accuracy and integrity of their financial data.” said Michelle Moore, NEI Chief Global Mobility officer. “I’m incredibly proud of our teams.   This is an amazing testament to the strong internal control system maintained by every one of our stellar employees in their on-going dedication to complying and adhering to the internal control structure and processes.”

The AICPA clarifies that this type of SOC report for service organizations provides a level of assurance to the organizations’ clients that financial reporting is practiced in accordance with the Statement on Standards for Attestation Engagements SSAE No. 18.

SOC 2 – Availability, Security, and Confidentiality

The SOC 2 report addresses a service organization’s controls that relate to services, operations, and compliance. NEI’s SOC 2 reports on the criteria of availability, security, and confidentiality – that which is often categorized under data security.

“Three years in a row of “zero findings” is an achievement only possible through the daily efforts of all NEI employees!” said Kevin Sefcovic, NEI Information Security and Privacy Director. “The fact that we can maintain this level of excellence shows our organization’s dedication to data security and privacy and our commitment to keeping our customers data secure. We are continuing to adapt our processes and services to meet the ever-changing security landscape and ensure this level of assurance in the years to come.”

The SOC 2 report is connected to the SSAE 18 standard and was created in part because of the rise of cloud computing and business outsourcing of functions to service organizations.

In addition to our excellent SOC 1 & 2 Type 2 ZERO findings results over the years, in the 2023 Trippel Relocation Managers’ Survey©, NEI earned the highest average score or Net Satisfaction percentage in: Willingness to Recommend; Continuation of Service; Culture and Partnership; and Transparency. NEI also tied for first in net satisfaction for Account Managers and Integrity, while also ranking in the top three for Responsiveness and Overall Satisfaction. In the Performance category, NEI was one of only two service firms to be described by each survey respondent as either “Best in Class” or “Excellent.”

Should you want more information about our SOC 1 and 2 Audit results, please reach out to Michelle Moore, NEI Chief Global Mobility Officer or Greg Keith, NEI Chief Information Officer. We are always here to help.

Global Mobility Strategies for Enhancing Employee Well-Being

Global mobility, the practice of relocating employees across borders for work assignments, has become essential in today's competitive and interconnected business landscape. As corporations expand operations globally, the demand for a diversified workforce capable of navigating different cultural contexts rises. However, global mobility carries its own unique set of challenges, a significant one being the necessity to ensure employees have a positive experience during their global transfers. This article highlights the significance of enhancing the employee experience in global mobility and proposes effective strategies for successful implementation.

Key Benefits in Mobility

Global mobility, the practice of relocating employees across borders for work assignments, has become essential in today's competitive and interconnected business landscape. As corporations expand operations globally, the demand for a diversified workforce capable of navigating different cultural contexts rises. However, global mobility carries its own unique set of challenges, a significant one being the necessity to ensure employees have a positive experience during their global transfers. This article highlights the significance of enhancing the employee experience in global mobility and proposes effective strategies for successful implementation.

The term 'employee experience' encapsulates all the interactions, emotions, and perceptions that an employee accumulates throughout their tenure in an organization. Within global mobility, it is especially significant for three key reasons:

  • Attraction and Retention: A positive global mobility experience plays a crucial role in attracting and retaining skilled employees.
  • Productivity and Performance: When employees have a rewarding experience abroad, they tend to be more engaged, motivated, and productive, leading to improved business outcomes.
  • Cost Efficiency: Positive experiences lower the risk of turnover, reducing recruitment and training costs. It also minimizes the chance of assignment failures, providing financial benefits to the organization.

Practical Strategies to Improve Employee Experience

To create an exceptional global mobility experience for employees, organizations can adopt the following practical strategies at different stages of the process:

1. Pre-Departure Preparation

Successful global mobility extends beyond geographic relocation. It necessitates seamless adaptation to new cultures, infrastructures, and bureaucratic procedures. Implementing the following strategies in the initial phase can smooth the transition process:

  • Clear Expectations: Clear communication about assignment details, compensation, benefits, and role expectations is crucial for informed decision-making, goal alignment, and minimizing misunderstandings during international assignments.
  • Logistical Support: Streamlining essential documentation and services like visas, bank accounts, schooling, and accommodation is vital, reducing stress for international employees and facilitating a smoother transition.
  • Cross-Cultural Training: To enhance personal adjustment and job performance in diverse settings, companies should provide country-specific cultural and language training for employees and their families, improving communication and relationships.
  • Work-Life Balance: Promoting a healthy work-life balance through flexible hours, extended leave options, and wellness programs enhances employee well-being, reduces burnout, and boosts productivity.
  • Localized Insights: Connecting employees with peers who have host country experience provides practical advice and realistic expectations, better preparing them for global assignments.

2. Settling in the New Location

Supporting employees during their first few weeks in a new country can ease their adjustment and ensure their comfort.

  • Accommodation and Subsistence Allowance: Providing temporary, culturally suitable accommodations and daily essentials allowances can help employees settle in the new location comfortably.
  • Local Networks: Introducing employees to local contacts, or 'buddy' networks, helps them access vital information about schools, healthcare, transportation, and other local facilities.
  • Local Integration: Encouraging language classes, interaction with community resources, and proper exposure to the local environment fosters a smoother assimilation experience.

3. Ongoing Assignment Support

Maintaining regular communication with employees during assignments can address their evolving professional and personal concerns.

  • Regular Check-Ins and Communication: Open communication using digital tools such as company intranet sites, global mobility apps, and video conferencing applications keeps employees connected and reassured throughout their assignments.
  • Employee Assistance Programs (EAPs): Providing support services that address personal and emotional challenges during assignments further enhances employees' global mobility experience.
  • Facilitation and Networking: Offering continual assistance in essential areas like visa/immigration, language training, and facilitating networking opportunities with international colleagues is crucial for an enhanced global assignment.
  • Recognition: Acknowledging the contribution of employees during their international assignments, with promotions, bonuses, and incentives where appropriate, encourages employee satisfaction and loyalty.

4. Repatriation Process

At the end of the assignment, facilitating a seamless repatriation process and reintegration into the home country can significantly impact the overall global mobility experience.

  • Re-Entry Plan and Career Support: Developing re-entry plans, providing personal and professional support, and scheduling suitable roles for employees returning from international assignments eases their transition back into the home environment.
  • Compensation: Compensating for relocation expenses resulting from the repatriation helps reduce the financial burden on employees. Cover relocation expenses related to the transition.
  • Post-Assignment Plans and Feedback: Formulating post-assignment career pathways and collecting feedback for the continuous enhancement of global mobility programs is crucial for future success.

Challenges and Best Practices

Organizations face multiple challenges when attempting to create a successful global mobility experience. Adopting best practices such as leveraging technology for administrative tasks, conducting cost-benefit analyses, providing cultural training, engaging legal counsel for regulatory compliance, and promoting equitable benefits and diversity can help mitigate these issues.

Challenge 1: Streamlining Administrative and Compliance Aspects

Organizations can use technology and automation to simplify tasks and minimize stress for employees.

  • Best Practice: Centralized Platform
  • Provide a centralized platform for employees where they can readily access, manage and track their relocation-related tasks, documents, and information.

Challenge 2: Balancing Cost and Employee Experience

A frequent challenge is striking the right balance between the cost of global mobility programs and providing an enriching employee experience.

  • Best Practice: Cost-Benefit Analysis
  • Conduct a detailed cost-benefit analysis to identify avenues that can enhance the employee experience without causing a significant increase in expenses.

Challenge 3: Managing Cultural Differences

Inducting employees into a new cultural climate brings challenges of its own, as employees must learn to navigate diverse social norms and engage with colleagues from various backgrounds.

  • Best Practice: Cultural Training and Support
  • Facilitate cultural training and support to help employees work through these challenges, fostering an inclusive and collaborative work environment.

Challenge 4: Ensuring Compliance with Local Laws and Regulations

Organizations should strive to ensure their global mobility programs are in compliance with all applicable local laws and regulations.

  • Best Practice: Engaging Local Experts
  • Engage with local experts and legal counsel to stay abreast of the latest legal requirements and ensure compliance.

Challenge 5: Implementing Inclusive Policies

Global Mobility teams encounter the challenge of adapting to cater to a diverse, multi-generational workforce with constantly shifting priorities. Defining an inclusive global mobility experience can help accomplish this.

  • Best Practice: Diversity and Inclusion
  • Cultivate a diverse and inclusive culture that appreciates and leverages the unique perspectives and experiences of employees from various backgrounds. Administer equitable and inclusive benefits to all globally mobile employees.

Conclusion

Employee experience is vital for successful global mobility and business operations on a global scale. Prioritizing employee wellbeing, development, satisfaction, and recognition ensures rewarding global experiences for both employees and organizations. By adopting inclusive policies, promoting effective communication, and putting appropriate planning into practice, businesses can successfully address the challenges that come with global mobility.

NEI Global Relocation is honored to feature this insightful article, expertly authored by Klippa Relocation. As part of our commitment to supporting employees and their families during their relocation journeys, we're delighted to showcase Klippa's exemplary services. Klippa excels as a leading provider of relocation, immigration, and corporate services, facilitating smooth transitions across the globe. Their dedication to seamless relocation experiences is evident in thand in every service they offer.

Global Payroll Compliance and Accuracy

Ensuring compliance with a country's payroll reporting and withholding regulations, along with accurately managing the evolving intricacies of international relocation compensation, is crucial. While this can be intimidating, especially for those new to corporate global mobility, it doesn't have to be.

As global payroll operations for assignees (employees who work outside their home country) have become increasingly complex, global companies are placing increased importance on having effective compensation/payroll operations.

Tax authorities around the world have sought to increase revenue through additional taxation and more stringent enforcement of wage and tax reporting requirements, according to Deloitte.

“The market is experiencing a spike in payroll audit activity and reputational risk…Organizations and their mobile workforce are becoming increasingly visible to revenue authorities who require strict compliance with payroll reporting requirements, thereby creating challenges for internal functions such as Mobility, Tax, Payroll and Finance,” Deloitte reported.

Of surveyed companies, 67 percent now have a formalized payroll strategy in place according to an EY Global Payroll Survey. EY also found organizations with formal payroll strategies have a more efficient payroll operation: “Simply stated, organizations with formal and documented payroll strategies built a more efficient payroll operation than those without a formal policy.”

Tailored Global Compensation Solutions

NEI streamlines payroll reporting with tax partners for clients, providing global compensation accumulation and reporting in-house. We further coordinate with each client’s payroll and tax partner to ensure all details are accurately captured. This benefits our clients through:

  • Less work for client teams, freeing up time for other core responsibilities
  • Potentially lower costs with the tax partner, as they can easily have all the details captured for filing without spending billable time gathering information or seeking data clarifications

Including the identified tax firm as part of our implementation / transition process for new clients creates a clear system and establishes expectations for required reporting formats, timing of scheduled reports, and year-end reports.

Tailoring procedures to client-specific payroll and accounting timelines directly benefits companies. We engage client global payroll departments to transmit data and discuss process / timing needs in order to coordinate filings with each client’s tax partner.

NEI can also work in conjunction with a company’s tax firm if they participate in the local calculations. If tax preparation services are outside of policy, we work within a client's designated parameters to determine appropriate timing, format, and information for payroll contacts.

We Work with Experts, So You Don’t Have To

NEI manages global compensation of international assignments holistically and in conjunction with compensation experts to obtain approved allowances and differentials for each individual employee.

Doing so allows us to provide compensation information to each client’s payroll and global tax firm to ensure both have the data needed for making payments and properly reporting total employee income. As with all services, NEI can work with either our partners or client-preferred partners to meet each client’s unique needs.

If a company expands into a new country and lacks a local payroll system, which may be mandated by local law, NEI can facilitate the coordination of payroll services in specific countries. This is managed through our accounting service partners, renowned for their extensive experience in handling international payroll and accounting systems. They provide a comprehensive suite of cross-border services, including setup, payroll management, accounting, tax compliance, and advisory services. These services are tailored to meet the individualized needs as specified by NEI.

Stress Free Support

NEI works closely with each client and their tax firm to report payments made to or on behalf of assignees throughout the year. We offer comprehensive support so that clients’ global compensation compliance requirements are met in a timely manner. Additionally, we will review programs and suggest improvements where necessary.

To learn more on how NEI can assist with compliance regarding Global Compensation, please contact your NEI representative or Michelle Moore, CPA, MPA, CGMA, Chief Global Mobility Officer.

The text above is provided for informational purposes only. Please consult your tax, legal, immigration or accounting advisors before making any decisions or transactions.

Current Realities in U.S. Homebuying Trends

The home buying reality today is stark and record low inventory caused by high mortgage rates have “trapped” owners in their current mortgages. Experts don't predict home prices to revert to pre-pandemic levels anytime soon, so even those who were able to buy a home may find the idea unacceptable with their other financial goals.

Rising Costs, Limited Options

Warren Buffett once said, "Price is what you pay. Value is what you get." This highlights the essence of making a wise investment, especially in terms of buying and owning a home.

Today, however, Buffett’s advice above may be hard to swallow for would-be home buyers:  the average house price is around $400,000, much higher than it was twenty years ago when it was roughly $170,000. Also, the interest rates for home loans are now higher than they've been in 20+ years.

Prior to the pandemic, a home buyer with a $2,000 monthly housing budget could have purchased a home valued at over $400,000. Now, that same budget can only stretch to a home valued at $295,000 or less with rates in the 7 percent range.

This Time’s Different

Usually, when mortgage rates go up, home sales slow down, and sellers lower prices to attract buyers, but, as the saying goes, “This time’s different.”

Despite the pent-up demand, with home sales decreasing and bidding wars becoming less common, prices are still going up due to a home inventory shortage. Many homeowners who locked in low rates in recent years are reluctant to sell and corporate investors accounted for 26% of all single-family purchases in 2023, up from pre-pandemic levels of less than 20%, per Business Insider.

These statistics for different regions in the U.S., provided by the National Association of Realtors (NAR), corroborate what so many people are experiencing in the market right now:

  • Northeast: Median price $439,200 (up 7.5% from last year)
  • Midwest: Median price $285,100 (up 4.2% from October 2022)
  • South: Median price $357,700 (up 3.5% from last year)
  • West: Median price $602,200 (up 2.3% from October 2022)

In 2024, according to Money Magazine, some semblance of a buyer's market in real estate could be on the way, ending a period of low inventory and record high prices.

Despite the Federal Open Market Committee indicating that no rate hikes are anticipated for 2024, and rates could begin coming down, don't get too excited.

Housing market predictions from real estate companies Redfin and Zillow show both companies forecast that buyers will see some improvements in terms of inventory and prices in 2024, both also say mortgage rates will remain stubbornly high. This will hamper the speed at which real estate will return to normalcy. Redfin predicted that rates will only drop to about 6% at best; Zillow said rates will have some definite "staying power."

A Keystone of Wealth

Understandably, many people feel discouraged or have given up on the dream of buying a home since moving to a new home with higher interest rates could mean paying hundreds of thousands more in interest over a 30-year loan.  According to a Zillow report, current homeowners are likely to stay where they are until mortgage rates drop back to 4% or 5% before considering moving to a new place.

However, Suze Orman, a well-known financial advisor, emphasizes that "Owning a home is a keystone of wealth — both financial affluence and emotional security.” This might explain why, even with such high interest rates today, first-time buyers were responsible for 28% of sales in October 2023, up from 27% in September, and identical to October 2022. Overall, about one-third of buyers were first-time home buyers in 2023, according to the National Association of Realtors.

This may be due to mortgage rates dropping from recent highs, sparking interest in buying; not to mention the first quarter of most calendar years typically sees higher interest from buyers, making 2024 a strong period for selling if interest rates fall.

NAR's Chief Economist Lawrence Yun believes that after this winter, more homes will be available for sale, leading to more purchases. "Fortunately, mortgage rates have fallen…stirring up buying interest," Yun stated. "Though limited now, expect housing inventory to improve after this winter and heading into the spring. More inventory will result in more home sales."

Factoring in Renting and ARMs

Mortgage loan applicants in October signed up for a median monthly payment of $2,199, marking a 9% increase – or an additional $143 each month – compared to the previous year, according to the Mortgage Bankers Association. In contrast, renters are experiencing a decrease in monthly rents. The national median monthly rent in October was $1,978, down 1.6% from the previous month and a 0.29% drop year-over-year, as reported by Rent.com.

Adjustable-Rate Mortgages (ARMs) have resurfaced as a popular topic in the media, particularly due to their significant role in the Great Financial Crisis. In 2005, ARMs constituted about 45% of all mortgages. Despite offering potential short-term cost benefits, ARMs carry increased risks and have also seen a rise in costs this year. The popularity of ARMs has grown as mortgage rates have recently increased. By April 2023, ARMs represented 18.6% of the dollar volume of conventional single-family mortgage originations, a substantial increase from its January 2021 low, according to CoreLogic.

The usage of Adjustable-Rate Mortgages (ARMs) differs based on location and loan amount. According to CoreLogic, ARMs are more frequently chosen by homebuyers who take out larger loans. This is particularly true for "jumbo loans," as compared to borrowers with smaller loans. CoreLogic cites: “Among mortgage originations exceeding $1 million in April 2023, ARMs comprised 45% of the dollar volume, a 6 percentage-point increase from April 2022.”

Strategies to Overcome

The landscape of homeownership in America is undergoing a transformation, presenting obstacles for many aspiring homeowners. The decision about whether to rent or buy in today’s real estate market is largely dependent on what one can afford. Nevertheless, with careful planning and adaptability, achieving homeownership remains within reach.

In the face of today’s challenges, prospective homebuyers might consider several strategies to overcome the hurdles posed by the present housing market:

  • First, thorough research and financial planning are crucial: use qualified brokers and mortgage providers to help guide your financial decisions.
  • Second, assess your budget, explore different loan options, and consult with financial advisors to make informed decisions.
  • Third, flexibility is key: consider a range of alternative locations or slightly smaller homes within your budget range.
  • Fourth, stay informed about market trends and be patient: doing so could pay off in the long run. While the market may seem daunting today, the situation can change, and opportunities may arise.

Buyers should not hesitate to seek guidance from real estate or relocation professionals who can provide valuable insights and guidance tailored to your specific circumstances. By combining these strategies, prospective homeowners can better position themselves to navigate the current challenges within their individual financial situations and achieve their homeownership goals when the time is right.

If you would like to discuss this topic further, please reach out to your NEI representative at any time.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Shipping Disruptions Impact Relocation

International shipping faces several disruptions heading into 2024, making it hard to forecast how things will play out.

Situation:

While freight rates are lower when compared to the recent past, concerns over rising costs and delays in import shipments are again increasing due to these developing situations:

Middle East – Red Sea

Attacks on cargo ships in the Bab-el-Mandeb Strait of the Red Sea – where about 12 percent of global shipping sails through – have prompted hundreds of cargo ships carrying over 2 million containers to reroute from the Red Sea.  Rerouting will result in longer transit times and elevated costs.

Changing a cargo ship’s route from Asia to Europe around the southern tip of Africa, rather than using the Suez Canal in the Red Sea, represents a major detour. For example, a cargo ship’s voyage from Singapore to Rotterdam would be extended by 3,300 miles, a 40 percent increase, adding approximately 10-to-14 extra days in transit and sizeable costs.

© OpenStreetMap contributors

With the international community mobilizing to stop this disruption to global trade, it is possible that these ship diversions could end soon, but only time will tell.

Central America – Panama Canal

Simultaneously, the 50-mile-long Panama Canal – which 5-to-6 percent of global shipping flows through – has had a 33 percent capacity reduction due to a drought, posing challenges in the shipping bottleneck area. Ships moving through the canal have faced wait times of up to three weeks. Delays are expected to continue until April / May 2024, when the rainy season is expected to raise the low water levels and end the region’s drought.

North America – US Mexico Border and West Coast Ports

Congestion of freight traffic at the Mexico-U.S. border is escalating and likely to continue its upward trend. This increase stems from the U.S. actively suspending freight train services across the border to counter unauthorized migrant crossings. The resulting shift from rail to truck transport for containers could significantly impact freight capacity, costs, and transit durations.

Both shippers and the broader supply chain should remain attentive to the potential recurrence of increased activity and congestion at major U.S. west coast ports next year due to  an anticipated surge in cargo from Asia to U.S. East Coast. This surge could strain trucking services and create logistical delays similar to those experienced during the pandemic.

What You Can Do

Companies should look for rate increases and a potential rise in incremental costs due to delayed shipments (e.g., temporary housing), as well as increased stress from relocating employees who will have to wait longer than expected for their goods.

If NEI is not managing your international shipments, we recommend:

  • Budgeting for additional freight rates in your cost estimates
  • Working with partners to develop processes that include verification that freight increases are genuine
  • Questioning rates that are much lower when compared to the overall market; which is often an attempt to lock in business with large increases coming without warning

NEI Guidance

Be prepared for these shipping trends to continue. Consider reasonable policy changes going forward, like the following:

  • Allowing exceptions specifically due to continued and new shipping disruptions in 2024
  • Setting new expectations with relocating employees
  • Considering alternative policy options for shipping international household goods

NEI remains committed to managing client costs for every move. Our Client Relations Managers will collaborate with each client to identify the most cost-effective options for international household goods shipping. They will also discuss providing a small allowance to employees for the extended transit period without their goods.

In Summary

NEI and our service partners will keep you posted on this developing situation, but if you would like to discuss policy changes or options to reduce global container shipment costs, please reach out to your NEI representative or Mollie Ivancic, NEI’s VP, International Services.

This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors before engaging in any transaction.

NEI’s Brian Digan Receives the NTRP 2023 Saul Gresky Relocation Professional of the Year Award

NEI Global Relocation is delighted to announce that our own Brian Digan, Vice President of Client Development, is the 2023 recipient of the North Texas Relocation Professional (NTRP) Saul Gresky Award.

This honor is bestowed upon an exceptional corporate or relocation service professional who embodies the essence of outstanding customer satisfaction, going above and beyond to serve corporate employees in their relocation journeys.

Located in Dallas, Brian boasts 40 years in the industry, fostering relationships with diverse corporations across multiple cities. Through his unwavering commitment to the industry, Brian has contributed significantly to enhancing the positive image of the relocation profession, fostering collaboration and support across numerous groups.

A proud Villanova University alumnus, Brian earned his MBA from the University of Connecticut School of Business and, as NTRP Treasurer, Brian has helped the group provide a forum for education and networking in all areas of relocation by both corporations and service sectors of the industry.

In an industry where service, ethics, and professionalism are key, NEI Global Relocation celebrates Brian for his industry efforts, achievements, and winning this year’s Saul Gresky Award.

Congratulations, Brian, for your dedicated and positive impact on improving corporate relocation experiences for employees and companies. Your efforts are truly appreciated.

Navigating New Mileage Rates, Tax Bracket Changes, and More for Relocation

With the new year comes new caps, tax tables and allowances from the U.S. Internal Revenue Service (IRS). Listed below are the areas related to relocation for tax year 2024.

Standard Mileage Rate

The IRS announced an increase of the optional standard mileage rates for 2024. The standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 67 cents per mile driven for business use, an increase of 1.5 cents from 2023.
  • 21 cents per mile driven for medical or moving purposes for qualified active-duty members of the Armed Forces, a decrease of 1 cent from 2023.
  • 14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2023.

Most companies follow the IRS guidelines to calculate the mileage reimbursements for final move expenses when driving to the new location. This rate increase will affect mobility programs:

  • If you are an NEI client who has elected to follow IRS guidelines for your expense administration, nothing is needed at this time. NEI will incorporate the mileage change into your expense reimbursement policy, as agreed.
  • If you are an NEI client who has not elected to follow the government established mileage rates in the past, NEI will continue to follow your prescribed rates unless you advise us that your company is changing the rate. Please contact your NEI Client Relations Manager directly, if you would like to confirm or update your current rate.

IRS Federal Income Tax Brackets and Rates

The IRS has also announced new 2024 tax year tax brackets, for taxes one will file in April 2025.

  • The IRS has adjusted the brackets for 2024 based on inflation, which is considered annually.
  • One’s tax bracket depends on one’s taxable income and filing status: single, married filing jointly or qualifying widow(er), married filing separately and head of household.

This image is a table showing the U.S. federal tax brackets for the year 2024 as specified by the Internal Revenue Service in the document 'Revenue Procedure 2023-34.' There are three columns, each representing a different filing status: 'For Single Filers,' 'For Married Individuals Filing Joint Returns,' and 'For Heads of Households.' Seven tax rates are listed on the left, ranging from 10% to 37%. Each tax rate corresponds to different income ranges for each filing status. For example, single filers are taxed at 10% for income from $0 to $11,600, while married individuals filing jointly are taxed at the same rate for income from $0 to $23,200. The highest tax rate of 37% applies to single filers earning $609,350 or more, married individuals filing jointly earning $731,200 or more, and heads of households earning $609,350 or more.

Standard Deductions

Standard deduction amounts have also increased:

The image displays a table listing the standard deduction amounts for various filing statuses for the 2024 tax year, sourced from the Internal Revenue Service and provided by the Tax Foundation. There are two columns in the table. The first column is 'Filing Status,' with three categories listed: 'Single Filer,' 'Married Filing Jointly,' and 'Head of Household.' The second column is 'Deduction Amount,' with corresponding figures for each filing status: $14,600 for single filers, $29,200 for married filing jointly, and $21,900 for heads of households. The source URL provided at the bottom is from the Tax Foundation's website.

Social Security Wage Limit

The Federal Insurance Contributions Act (FICA) requires companies to withhold three separate taxes from the wages paid to employees.  The largest tax of these three is the Social Security, also known as the Old Age, Survivors and Disability Insurance Program (OASDI).

For 2024, the FICA tax rate for both employers and employees is 7.65% (6.2% for OASDI and 1.45% for Medicare) to be paid on the first $168,600 of wages in 2024. This is up from $160,200 in 2023.

$10,453 is the maximum amount of Social Security tax that will be deducted from an employee’s paycheck in 2024. This is an increase from $9,932 in 2023.

Supplemental Tax Withholding Rates  

As standard for previous years, the supplemental Federal rate is 22% for those who make under $1 million remains unchanged, as does the 37% supplemental rate for those who exceed $1 million.

In Summary

As your relocation partner, NEI is here to explain year-end tax questions for your relocating employees. If you have any question about these changes, please contact Jaymi Stacy, NEI’s Sr. Director of Expense Disbursements, or your NEI Client Relations Manager at 800.533.7353.

This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors before engaging in any transaction.

How Global Economic Trends Are Driving Relocation

As the global economy shifts at an unprecedented pace, the role of global mobility managers is becoming increasingly complex and vital. Understanding the intricate web of free trade, technological advancements, and evolving workforce trends is crucial, given their profound impact on the nature and structure of today's work environment. This article explores the interplay between these variables and provides insights into their collective impact on job distribution and talent management.

Global Trade Dynamics and the Movement of Jobs

The last decade has witnessed significant shifts in global trade dynamics. While free trade fosters growth in total income at the country level, it also influences the distribution of jobs within and between nations.

A notable example is the United States, where manufacturing accounts for roughly 11 percent of total output and employs 8.4 percent of the workforce.1 Over the course of 40 years, the U.S. has seen a major migration of manufacturing jobs to countries with lower manufacturing wages. Manufacturing jobs have declined from 19.6 million in 1979 to nearly 13 million by November 2022, representing a 56 percent+ decrease when adjusted for population growth.2

As the manufacturing sector in the United States shrinks, this not only affects those directly employed in manufacturing but also results in a ripple effect, causing a substantial loss of jobs in secondary and tertiary industries. One study calculated that for every 100 jobs lost in durable manufacturing, 744.1 indirect jobs were lost through connections to sectors that provided materials for manufacturing and where manufacturing workers spent their income.3

Debate continues over the potential to restore these manufacturing jobs through policy changes, but the rising influence of technology and automation could irreversibly reshape the employment landscape in manufacturing.

Technology's Role in the Changing Workforce

Automation in industries, especially noticeable in sectors like automobile manufacturing, have drastically reduced the need for human labor. A modern automobile factory now operates with significantly fewer employees than it did four decades ago. Additionally, as exemplified by a shift towards battery electric vehicles (BEVs) with simpler, less part-intensive plans, broader technological advancements in product designs have the potential to further impact manufacturing jobs overall.4

This shift, while diminishing the number of manufacturing jobs, has increased the demand for higher-skilled labor. Consequently, the compensation per job in the manufacturing sector has risen, reflecting the need for more specialized skills. A 2021 Deloitte study reports the U.S. is expected to have 2.1 million unfilled manufacturing jobs by 2030, citing that, with technological advancements driving efficiency and productivity, “companies are willing to pay top dollar for skilled workers who can help them stay competitive in the global market.”5

With organizations facing increased challenges incentivizing both existing employees and new skilled workers to accept roles that involve relocation, offering competitive and cost-effective relocation benefits can prove to be a useful tool.

Economic Trends and Predictions

The current state of the global economy presents a mixed picture. While some regions experience modest growth, there's an overarching trend of slowing economic activity. This slowdown is partly attributed to significant increases in interest rates, the Federal Reserve’s response to a burst of inflation not seen in decades. The tightening of financial conditions by central banks aims to temper this inflation but comes at the cost of slowing down economic growth.

Predictions for the near future include the possibility of mild recessions in some areas. In a recent interview with NEI Global Relocation, Doug Duncan, Senior Vice President and Chief Economist at Fannie Mae, stated,

“In the first half of next year, still it's close to a toss-up, but we still think there's likely to be a mild recession starting sometime in the first half of next year… Right now, growth is pretty good, but we think it's likely to slow into next year.”

The reasons range from rising costs of goods and services due to increased credit costs to dampened employment and income growth. “Even though the rate of inflation is falling, it's still positive and prices have not come back down to where they were,” Duncan continued. “Of course, the Fed is concerned about the pace at which wages rise, which can be a contributor to inflation. So, there's going to be this period of frustration as time needs to pass with inflation at or below 2% and real incomes rising faster than that for households to catch up.”

Such economic concerns have profound implications for global mobility, affecting everything from talent acquisition strategies to compensation norms.

In the face of economic uncertainties, companies are sharpening their focus on roles crucial for enhancing operational efficiencies, such as HR business partners, process improvement specialists, and supply chain strategists. By focusing on strategic planning and efficient process management, these professionals help businesses navigate complex challenges, ensuring smarter and more effective use of resources. Simultaneously, with inflation impacting living costs, companies may reassess their compensation strategies. This could involve not only offering competitive salaries to attract key professionals, but also tailoring benefit packages to address the specific concerns of a workforce grappling with economic instability, such as increased healthcare coverage or flexible work arrangements.

As businesses recalibrate their talent acquisition strategies in response to economic challenges, understanding demographic shifts is the next essential consideration, given their significant impact on labor market dynamics and workforce availability.

Demographics and Labor Force Implications

Shifting demographic trends, particularly in developed countries like the U.S., are significantly impacting the labor force and emphasizing the need for immigration and corporate relocation strategies. Between 2009 and 2021, the U.S. saw a significant decrease in fertility rates, dropping by nearly 15 percent from 66.2 to 56.3 births per 1,000 women aged 15-44, as reported by the Center for Disease Control.6  With the birth rate now below the replacement level, this trend points to a potential future decrease in the domestic workforce.

“The discussion of immigration is a flash point, but at some point there's going to have to be a realistic assessment of what it is that we would like to achieve,” conveyed Duncan. “We will not replicate our workforce absent immigration.”

That flash point may have been reached. Though Congress has traditionally capped the limits on annual H-1B visa numbers at 65,000, the program could significantly change in October 2024. The Department of Homeland Security U.S. Citizenship and Immigration Services (USCIS) published a 94-page Proposed Rule in October to modernize the H-1B program requirements beginning in October 2024.7

Talent acquisition professionals and relocation managers will have to balance workforce needs with shifting immigration policies, ensuring that their staffing and relocation strategies align with the evolving demographic environment and labor market demands.

Adapting Talent Strategies in a Rapidly Evolving Global Economy

The interrelation between free trade, technology, demographics, and economic health creates a complex backdrop for Global Mobility and Talent Management leaders.  

In the manufacturing industry alone, jobs are likely to change significantly in the next five to ten years due to rapid technological advances, and the skills companies seek in their future workforce may evolve. Global Mobility and Talent Management teams, both in manufacturing and across all industries, will need to continually adapt, balancing the costs of relocation benefits with their effectiveness in recruiting and retaining employees who are requested to move.

Staying abreast of trends is essential for developing effective strategies for global talent mobility, workforce planning, and corporate relocation. In an era marked by rapid changes and uncertainties, global mobility and talent managers will remain critical to guiding organizations through future economic landscapes.

Sources:

  1. Maquiladoras, Mexico’s engine of trade, driven to navigate evolving demand, by Jesus Cañas
  2. Forty years of falling manufacturing employment, by Katelynn Harris
  3. Updated employment multipliers for the U.S. economy, by Josh Bivens
  4. The stakes for workers in how policymakers manage the coming shift to all-electric vehicles, by Jim Barrett and Josh Bivens
  5. 2.1 Million Manufacturing Jobs Could Go Unfilled by 2030, NAM News Room
  6. Crude birth rates, fertility rates, and birth rates, by age, race, and Hispanic origin of mother: United States, selected years 1950–2019 and National Vital Statistics Reports, January 31, 2023
  7. Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Program Improvements Affecting Other Nonimmigrant Workers