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Strategies for Global Talent Mobility: Navigating Foreign Exchange Rate Impacts

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Strategies for Global Talent Mobility: Navigating Foreign Exchange Rate Impacts

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.

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The Critical Role of Family Involvement in Relocation

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The Critical Role of Family Involvement in Relocation

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.

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2024 Lunar New Year: The Year of the Dragon

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2024 Lunar New Year: The Year of the Dragon

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.

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Carnival 2024

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Carnival 2024

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!

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Maximizing Talent Through Inclusive Relocation Programs

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Maximizing Talent Through Inclusive Relocation Programs

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.

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

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

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.

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Current Realities in U.S. Homebuying Trends

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Current Realities in U.S. Homebuying Trends

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.

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Payroll Perfection: A Tailored Approach for Global Mobility Compliance

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Payroll Perfection: A Tailored Approach for Global Mobility Compliance

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.

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Enhancing the Employee Relocation Experience

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Enhancing the Employee Relocation Experience

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.

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Industry Alert: Global Shipping Update

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Industry Alert: Global Shipping Update

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.

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NEI VP Earns Distinguished Award

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NEI VP Earns Distinguished Award

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.

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Industry Alert: 2024 US Tax Changes Affecting Relocation

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Industry Alert: 2024 US Tax Changes Affecting Relocation

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.

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2023 US Domestic All Benefits Survey Overview

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2023 US Domestic All Benefits Survey Overview

Navigating Changes in Corporate Relocation and Benefits

NEI recently completed our 2023 U.S. Domestic All Benefits Survey. The survey covered all components of a typical U.S. domestic program, including policy overview, origination/departure services, destination services, the home sale process, and tax assistance. The top participant industries were Manufacturing, Medical/Pharma, Technology, Energy & Utilities, and Oil & Gas. There were 224 participants and forty-five policy components included in the survey, the key takeaways focused on flexibility in mobility programs, economic impact of policy changes, an increase in the number of renters, and the addition of Diversity, Equity & Inclusion (DEI) options for relocating families.

Program Flexibility & Policy Structure

The survey indicates that more and more companies are responding to the ever-changing needs of employees and internal business units by including more flexibility in their policy structures. The 4-tiered policy structure is the most common way to meet these needs, which is a slight increase from 3 tiers in 2022.The usage of core-flex programs has also increased, as have lump sum-only programs, which have increased from 2% to 3% by offering incentives to lower-tiered employees.

Influx of Renters

Traditionally, it was common for companies to assume their higher-tier employees would receive home sale benefits as part of their relocation package. However, survey results show that companies have noticed an increase in higher-tier renters and have responded by adjusting their lease cancellation benefits, with executive-level rental finding assistance increasing from 53% to 56%. Lease cancellation reimbursement ordinarily equals up to two months’ rent, but our research shows that nearly 11% of companies offer up to three months’ rent, likely at the higher policy levels.

Because an increase in the offering of rental finding assistance has been noted and is consistent with the increase of lease cancellation benefits, NEI recommends that companies offer all employees rental finding assistance, regardless of housing status in the old location.

Economic Impact on Policy

Another factor influencing client decisions is the economic impact of policy parameters such as Loss on Sale, Cost of Living Adjustments (COLA), and Mortgage Interest Deferral Assistance (MIDA). Though the housing market is slowing slightly, Case-Shiller reports that prices are still increasing. While it is still possible for employees to experience loss, NEI recommends companies prepare an addendum to policy for unique or “one-off” loss on sale situations.

One question NEI kept in mind while preparing the survey was “Are more companies offering COLA and MIDA with the cost of living increasing and the mortgage interest rates climbing so much?”

According to the survey, the answer is not really. With the cost of living increasing everywhere, the use of COLAs has risen from 7% to 11%, which is a relatively small increase compared to the rise in living expenses, but the expectation is that usage could increase more in the coming years. Additionally, for MIDA, only 2% of companies offer it for their Executives and 1% for their Directors and VPs.

When considering implementation of a MIDA program, NEI encourages companies to consider the interest rate differential increase rather than the interest rate itself. While MIDAs of old used to impose an 8% minimum rate for eligibility, the differential was typically only 2-3%. Though rates are now still below that prior 8% threshold, we’ve seen an increase of nearly 5% for some homeowners who purchased around 2%. A more appropriate method would incorporate the MIDA based on a minimum differential vs. the rate.

Diversity, Equity & Inclusion

The Benefits Survey shows that companies are incorporating DEI into many aspects of their corporate structure, including their relocation programs. Because the most common reason for an unsuccessful or declined relocation is spouse/family issues, there has been a significant shift from career assistance to family acclimation services.

New to the survey this year, DEI benefits are now outlined by 9% of survey respondents, a trend that NEI expects will continue to grow. The most common type of DEI benefit is employee/family integration assistance (44%), followed by DEI-specific allowance (28%) and flex benefit options to meet any need (22%). Also noted by some was their desire to minimize the gap between homeowner and renter benefits, bringing more equity to their programs in that way. As a result, new home closing costs are being more frequently offered to former renters.

Looking to Stay Ahead of the Curve

In addition to the topics outlined above, one subject expected to receive even more attention in 2024 is the 2017 Tax Cuts and Jobs Act, which will either be extended or expire in 2025. If the Act expires and the excludability of some tax expenses is reinstated (e.g. household goods and final move benefits), companies may experience a decrease in tax gross-up expenses, lessening the burden of otherwise rising costs.

If you would like a copy of the 2023 U.S. Domestic All Benefits Survey in its entirety, please contact your NEI representative or click here.

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NEI Global Relocation Excels in Trippel Survey

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NEI Global Relocation Excels in Trippel Survey

Global Mobility Leader Achieves Top Rankings in Willingness to Recommend and Continuation of Services

NEI Global Relocation proudly announces its outstanding performance in the 22nd Annual Relocation Managers Survey© conducted by Trippel Survey and Research, LLC. Demonstrating unparalleled commitment to excellence, NEI has secured the top position in the highly coveted categories of Willingness to Recommend and Continuation of Service, reaffirming its status as a premier Relocation Management Company.

#1 Willingness to Recommend

“It means a great deal to us that our clients feel comfortable and even excited to recommend us to their peers in the industry.” Randy Wilson, President and CEO of NEI Global Relocation, remarked. “We try very hard to pursue collaboration with quality clients that align with our culture of excellence, so to have those same people willingly advocate for our services speaks volumes.”

Commenting further, Wilson expressed, “This recognition reinforces our belief in the power of genuine relationships and the impact of delivering exceptional relocation experiences. We see it as a validation of our commitment to not only meet but exceed expectations, and it motivates us to continuously elevate our standards. We are grateful for the confidence our clients place in us and are dedicated to maintaining the level of service that inspires such positive recommendations.”

#1 Continuation of Service

In speaking on receiving the top ranking for Continuation of Service, Wilson commented, “It’s incredibly satisfying to see the deep trust our clients place in our services and the dedication of our team to uphold the highest standards of excellence. It not only validates our commitment to excellence but also reinforces our resolve to innovate and adapt in an ever-evolving industry. This especially isn’t just an honor; it's our motivation to continue forging productive relationships and delivering unparalleled service for those in our care."

The dual triumphs in Willingness to Recommend and Continuation of Service solidify NEI Global Relocation's position as a trusted partner in global mobility. In securing top marks across various key metrics in the 22nd Annual Relocation Managers Survey©, NEI Global Relocation demonstrates steadfast dedication to service excellence and client satisfaction. This consistent high performance, recognized broadly in the industry, reinforces NEI's commitment to provide reliable and first-rate relocation services.

 

About NEI Global Relocation

NEI Global Relocation is a leading Relocation Management Company, providing comprehensive global mobility solutions. With a commitment to excellence and a focus on building lasting client relationships, NEI ensures seamless employee relocations worldwide. For more information contact your NEI representative or click here.

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NEI Spotlight on EER

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NEI Spotlight on EER

10 Things That Will Surprise You When Relocating to Dubai

Dubai continues to rise in popularity when it comes to international relocation and global mobility. Whether it is its reputation for safety, its unique business opportunities or its year-round sunshine, there are so many attractive elements about the city that keep drawing in new people every day.

If you want to know more about this in demand destination, click here.

NEI is proud to feature how our service partners support your employees and their families as they relocate and transition to all points of the globe. EER Middle East is the region’s leading supplier of relocation, immigration and corporate services in Saudi Arabia, Bahrain, Qatar, Oman, Kuwait and the UAE.

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Protecting Renters: Avoiding Junk Fees and Spotting Scams

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Protecting Renters: Avoiding Junk Fees and Spotting Scams

Protecting Renters: Avoiding Junk Fees and Spotting Scams

Apartment shopping can be stressful enough, but in today’s marketplace scammers and crafty custodians can lead to a financial maze with potentially disastrous results. This is why professional rental assistance can be so valuable.

New Rental Reality – Uncovering Hidden Fees

Median national rent prices continue to sit well above pre-pandemic levels, having risen by more than 18.5 percent in three years, and now account for 30 percent of the average American household income.

Hidden 'junk' fees and rental fraud make it difficult to accurately estimate the true cost of an apartment – especially when using different search engines online. These additional fees typically range from $5 to $50, which may seem insignificant, yet can add up with multiple line items to more than tenants budgeted for, as reported by The Wall Street Journal.

What makes the charges hard to contest is their attachment to specific services such as rent processing, trash removal, mail sorting, parking, pets, "January Fees" (an added charge in some states on the first month of the year with no apparent benefit to tenants) and even “convenience” fees to collect tenant’s rent online…which is a convenience for landlords.

Enhancing Rental Transparency

Beyond the obvious financial implications, the lack of transparency associated with these fees can mislead renters into choosing an apartment they believe is affordable, only to discover unexpected costs. Even before the pandemic, over 20 million renter households expressed concerns about housing costs jeopardizing their financial stability, according to a March report by the National Consumer Law Center.

In response, the White House took steps to enhance transparency and several online platforms have agreed to work towards disclosing all fees. Examples of efforts include:

  • Zillow.com plans to display a "cost of renting summary" on its active apartment listings, summarizing all additional fees.
  • Apartments.com will introduce a calculator to help renters determine the total cost of renting an apartment.
  • AffordableHousing.com will ensure owners disclose all refundable and nonrefundable fees upfront in their listings.

These tools aim to make apartment hunting more transparent, allowing individuals to compare options and reduce uncertainties.

Application Fee Awareness

Prospective renters often contact multiple owners or property managers and visit several places during their housing search. Each rental application entails a fee, ranging from $50 to hundreds of dollars. This is supposedly to cover office work and background/credit checks. In a tight rental market, applicants frequently apply to multiple properties, and inaccuracies in tenant screening reports can lead to repeated rejections – despite multiple application fees paid.

The White House's recent crackdown on "junk fees" also aims to shed light on these additional application costs, aligning efforts to also address extra fees assessed by airlines and live-event platforms.

The hope is that by making all fees public, fewer apartment complexes/landlords can surprise tenants and tenants will be better equipped to make fair comparisons between rental options while searching for a place to live.

Recognizing & Avoiding Scams

Sadly, rental fraud is also on the rise. According to a recent survey conducted by Dwellsy, around 85 percent of responding renters experienced financial losses as a result from rental fraud above $400 and 19 percent experienced losses of more than $5,000. Over 60 percent of respondents reported encountering suspicious activities on digital rental platforms, such as fake landlords trying to steal a rental payment or deposit.

To secure a fair and transparent rental agreement, awareness is crucial. Scam signs include:

  • Photos look too good to be true
  • Listing has grammatical/formatting errors
  • Pressure to sign the lease or send money prior to touring
  • No credit check required

Using a qualified rental finding partner who understands the local market helps tenants steer clear of unwelcome surprises. Scams can further be avoided by:

  • Always requesting a tour
  • Avoiding sending money by wire
  • Asking to speak with the property owner/manager
  • Disregarding listings that look/feel suspicious

Through programs like Extended Rental Assistance, NEI works directly with qualified rental finding partners – giving each agency both verbal and written guidelines outlining the anticipated needs of relocating employees, setting expectations, specifying timelines, and reporting protocols for the rental search. Following the agent's initial engagement with the transferring family, additional follow-ups between NEI and the partner occur during and after the rental finding trips. As always, communication is maintained with the employee through the lease finalization process.

In Summary

Renting an apartment can be complex, but being equipped with the right knowledge is critical to making it a stress-free process.

New tools from platforms like Zillow, Apartments.com, and AffordableHousing.com will undoubtedly aid employees, however, having multiple options, back-up plans, and working with a trusted rental-finding agency can make all the difference in ensuring successful employee transitions.

Ensuring the peace of mind and productivity of our clients’ employees remains our top priority. NEI’s Client Relations Managers work with each of their clients to discuss the most cost-effective approaches available. If you would like to discuss this or other relocation trends or cost-saving solution ideas, please reach out to your NEI representative.

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.

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Competition & Chaos: Navigating Relocation and the Paris 2024 Summer Games

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Competition & Chaos: Navigating Relocation and the Paris 2024 Summer Games

Competition & Chaos: Navigating Relocation and the Paris 2024 Summer Games

Corporate Global Mobility, Human Resources, and Business Managers should prepare for potential challenges that employees and businesses will face both before and during the 2024 Olympic and Paralympic Games held in and around Paris, France.

The Roar of the Crowd

• The Olympic Games run 26 July – 11 August 2024.

• The Paralympic Games run 28 August – 8 September 2024.

• The Olympic and Paralympic Games will take place in nearly three dozen sites in and around Paris.

Weeks before the games start, over 15,000+ athletes, 30,000+ volunteers, and 6,000+ members of media will descend on the Paris area. During the games, an estimated 13 million spectators will attend.

Paris is already one of Europe’s busiest tourist destinations. In fact, the city was so overcrowded in the summer of 2023 that the French Tourism Minister requested visitors stay away from popular tourist attractions in the city and check out other areas of the country.

In addition to the surge in pre-games preparation and ongoing games activity, intense security will also be a factor. Business Travelers and Employees on assignment in Paris will face significant challenges leading up to and during the games. These could include finding temporary or permanent accommodations, longer commute times while navigating crowded public transportation, and delays in simply conducting business.

Go for the Gold in Relocation Guidance

Proactive planning, open communication, setting expectations, and flexibility in work arrangements can help mitigate these challenges and ensure a smooth transition during this hectic, exciting time.

NEI’s service partner, Dwellworks, and their local experts in France recently provided sound “What to Expect” guidance about how to secure accommodations and navigate travel/traffic issues around the Paris Summer Games:

What to Expect:

Booking Well in Advance

Several providers have acted early in removing their inventory from Global Distribution Systems (GDS) during the Olympic and Paralympic Games as a way to control their inventory and maximize booking opportunities during this time.

Inflexibility

Clients should be aware of the risk of block bookings as sales are often final, with providers historically being unwilling to negotiate terms for unused inventory, cancellations, deposits, etc.

Stay Requirements

It is expected that minimum/maximum stay requirements will likely be enforced during this time period.  It is highly recommended to secure your Games accommodation sooner rather than later.

Stringent Cancellation Terms

Cancellation terms will likely be far more stringent and are expected to include increased cancellation periods, as well as non-refundable terms, both before and during the Olympics/Paralympics Games period to avoid speculative reservations and to maximize opportunity for providers.

Higher Deposit Requirements

Down-payment/deposit requirements are expected for all parties; it is highly likely that group/block bookings will be required to pay a deposit at a premium rate.  Booking rates are expected to increase by 120%, lower rates will return before and after the Games.

Increased Traffic

Residents and visitors can expect every hour to be similar to rush hour during the Paris 2024 Games.  The anticipation of several million tourists travelling to Paris during the Games most likely will cause traffic congestion and overcrowded public transportation as well as limit the availability of ride-sharing apps.  It is recommended to travel via bike or walk when possible.

Global Relocation & The Olympics

Mark Spitz, an American swimmer and 9-time Olympic medalist, famously said: “If you fail to prepare, you’ve prepared to fail.”

To avoid delays, we encourage clients to prepare and plan accordingly with both their business units and relocating employees.

Please reach out to NEI in advance of employees relocating to or from any part of France in the spring or summer of 2024. Proactively, NEI and our partners can look at each unique situation and conduct advance research to determine potential challenges and find alternative options.

NEI will continue to provide clients with updated information about how the Paris Summer Games might impact global mobility in and out of France and how to manage employee expectations accordingly.

If you would like to discuss this situation further, please reach out to your NEI representative or NEI’s VP of International Services, Mollie Ivancic.

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

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Industry Alert: NAR Lawsuit

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Industry Alert: NAR Lawsuit

National Association of Realtors Found Liable

On October 31, 2023, a jury reached a decision that could potentially change how real estate transactions are conducted in the U.S., creating opportunities for significant changes to commissions paid to real estate agents. In the case, Burnett v. NAR et al, the Kansas City, MO, jury found the National Association of Realtors (NAR), and some of the largest national real-estate broker franchisors conspired to artificially inflate home-sale commissions.

The basis of the conspiracy is the condition that a home seller must agree to pay a commission to the buyer’s agent before the home can be listed on NAR’s nationwide Multiple Listings Service database – a database controlled by local NAR associations. And, since most home sales are through the MLS marketplace, the plaintiffs claim home sellers are forced to pay a cost that should be paid by the buyer.

Under the new model, sellers may no longer be responsible for covering the seller’s and buyer’s agents’ commissions, allowing negotiation of different compensation models, and having buyers assume the responsibility of directly compensating their agents.

The NAR believes this could be a substantial challenge for first-time and low-income buyers who might lack the upfront funds to pay an agent, potentially depriving them of valuable expertise.

According to Worldwide ERC, the resolution of this and other related lawsuits could potentially change today’s real estate business by bringing competition, cutting costs, and providing customers with more options.

With uncertainty on how the ruling plays out, and NAR planning to appeal the decision with confidence, NEI will continue to monitor the situation and will offer updates as they become available. If you have any questions, please contact your NEI Client Relations Manager or NEI Client Development Contact at 800.533.7353.

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Managing International Employee Relocations to the U.S.

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Managing International Employee Relocations to the U.S.

This article was originally published by WBENC in January 2023.

The Basics of International to U.S. Relocations

Managing an international employee’s relocation to the U.S. for a company-sponsored assignment or permanent move may seem straightforward, but overlooking details can result in delays, frustration, and added costs to an already expensive proposition.  

What is important to succeed?

Ample planning – ideally 12 months – for relocations into the U.S. is encouraged today. This involves everything from coordinating visa/immigration needs to housing, household goods shipments, family challenges and more. Running cost estimates before employees are presented their relocation offer is wise, as is using professional pre-offer candidate assessments to confirm candidates have “the right stuff” to succeed. These range from self-administered tests to in-depth assessments and prediction models.

Second, it’s a best practice to cost-effectively manage international relocations to the U.S. using an experienced global Relocation Management Company (RMC) to coordinate services with vetted global suppliers and ensure cross-border compliance.  

Finally, consistent, competitive inbound-U.S. employee relocation benefits policies are critical to support business drivers, cultures, and budgets. Employees should receive proactive guidance from the RMC’s dedicated Counselors to maximize benefits. Counselors are employee advocates and expertly manage the entire process.

Key Areas of Support

Families of relocating employees are often excited at the prospect of moving to the U.S., but that excitement can turn to apprehension in the following areas:

Visa/Immigration

Completing all required visa/immigration applications is key to scheduling U.S. arrivals. The RMC can manage this process with immigration experts. It is critically important to start the application process much earlier than in years’ past and to set realistic timelines. Immigration processes are now more complex and non-compliance penalties for employees reporting for work in the U.S. before work permits are secured may include fines and/or being banned from entering the U.S. for between three and ten years. Twelve months is the recommended time span to begin the process.

Employee/Family Integration

Integration can be daunting. Expats often report each of the 50 U.S. states feel like their own separate country with unique cultures, climates, regulations, dialects, and more. To ensure international employees to the U.S. are productive from the start, pre-departure intercultural and/or language training helps them live and work confidently – especially in areas without large expat populations.

Household Goods

RMC partners can arrange full moving services – from packing, crating, steel container loading, and shipping to unloading and unpacking in the U.S.  Moving companies and freight forwarders in each country coordinate with the RMC to manage customs/port delays in the U.S. or the departure country and track shipments. This involvement saves employees stress and companies money.

Housing and Settling-In

Employees entering the U.S. require professional home finding services. RMCs work directly with local Destination Service Partners (DSP) to view U.S. properties, assess leases for appropriate terms, verify rent fits within the housing allowance, and so forth. DSPs also help with settling-in by arranging utilities/internet connections, establishing U.S. bank accounts, and orienting to local shopping, schools, and hospitals.  

School and Spouse/Partner Support

School safety and academics are a top family concern when considering a U.S. relocation, so company-sponsored access to professionals who can identify destination solutions is encouraged. Accompanying spouses/partners who left careers and family behind, or perhaps find everyday tasks in the U.S. overwhelming, can impact the success of a U.S. relocation. Offering upfront, professional support can effectively overcome these obstacles.

Coming to America

Overlooking details or cutting corners when relocating international employees to the U.S. can risk non-compliance penalties and failed assignments, but also negatively impact valued talent who view the moves as significant career or growth opportunities.

Proactive, start-to-finish assistance and attention to detail directly supports international employees’ successes and companies’ business goals.

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Industry Alert: Israel-Hamas War

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Industry Alert: Israel-Hamas War

Client and Employee Support

With the recent outbreak of the Israel-Hamas war, we want to make sure your employees are safe and that you have the support from NEI that you need during this turbulent time.

Immediate State

  • NEI is working with our clients to confirm the well-being of employees located in Israel. NEI’s International team began welfare checks on Saturday (10/7) as the news of the attacks were making their way around the globe.
  • For expats who were scheduled to repatriate to Israel in the coming days, NEI is coordinating with clients to extend benefits as needed due to travel closures into Israel.

Additional Client Support

  • The International Team at NEI is assisting clients with their employees that live in Israel but were not in Israel at the time of the attacks (on business travel, vacation, etc.), and are currently unable to return to Israel due to travel closures. NEI has been, and will continue to, assist with sourcing temporary accommodations until travel back to Israel is permitted.
  • NEI has proactively prepared “active employee” lists for clients with global volume into / out of Israel. Employees from Israel, but not living there, may be personally affected due to the violence that has occurred with family and friends remaining in Israel. These employees are being identified to clients for awareness.
  • Clients can utilize NEI to liaise as appropriate with client’s global security teams to share needed information on employees in Israel.
  • Account Executives will continue to relay all information learned from employees in Israel back to the client.

 

Remaining Proactive 

NEI continues to monitor the situation and will offer updates to our clients as they become available.  Should you have any questions, or like to discuss your needs beyond your relocation population, please reach out to Mollie Ivancic, VP, International services or your NEI representative.

 

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2023 Service Partner Awards

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2023 Service Partner Awards

NEI Honors Corporate Relocation Partners

Each year NEI Global Relocation is thrilled to recognize those service partners who go above and beyond and embody the principles that define our business. Given the challenges of the past year and the significant increase in relocation volume, it is even more appropriate to recognize those who are delivering on our mission to provide Service Exceeding Expectations to our clients and their relocating employees.

Listed below are all of our winners with links to the award category press releases.

Partner of the Year

Press Release

Service Exceeding Expectations

Press Release

Own It! Awards

Press Release

Corporate Responsibility

Press Release

Innovation Awards

Press Release

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NEI Continues Dominance in 2022 Trippel Survey

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NEI Continues Dominance in 2022 Trippel Survey

For the last three years, NEI Global Relocation has dominated the Trippel Relocation Managers’ Surveys with more #1 ratings than any other company surveyed. This year, NEI again finished at the top of the pack—achieving the highest scores among all individually ranked participants in six categories and the second highest scores in three more categories!

NEI #1 category scores among all individually ranked participants:

  • Overall Satisfaction
  • Best in Class
  • Integrity
  • Willing to Recommend
  • Likelihood of Continuing Service
  • Data Security

NEI second place scores among all individually ranked participants:

  • Quality
  • Team Personnel
  • Responsiveness

In addition to the average scores detailed above, NEI also dominated the Net Satisfaction index showing great consistency year over year.

“These are amazing results for a year filled with record breaking client activity coupled with global supply, staffing and economic challenges.” said Randy Wilson, NEI President | CEO. “We recognize that all companies have faced these same challenges and appreciate our clients’ commitment to working closely with us for the benefit of their relocating families.  I’m also proud of our team members and grateful to our clients for recognizing their efforts with so many top scores again in the ©2022 Trippel Relocation Managers’ Survey.”

Of the 31 Relocation Management Companies (RMC) assessed, 14 companies received enough returns to be independently represented in the results.

If you would like to see the complete results of the survey, please reach out to your NEI representative, or click HERE

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Car Rental Costs Impacting Relocation Budgets

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Car Rental Costs Impacting Relocation Budgets

Car Rental Costs Impacting Relocation Budgets

Current car rental costs remain far above pre-pandemic prices with no relief in sight for the foreseeable future due to consumer demand and vehicle availability. This is directly impacting relocation services and global mobility travel budgets.

Stubbornly High Costs

Airfare and lodging prices are still near all-time highs with flights five percent more expensive than in May 2019. Hotels are up 15 percent over the same period, according to a May 2023 report from the Bureau of Labor Statistics (BLS). Yet, when estimating talent mobility travel budgets for home finding and temporary living benefits, renting car costs may be the most surprisingly high factor.

The typical cost of renting a car in the U.S. increased 48 percent since May 2019, according to data from the BLS, so a rental that was $100 per day four years ago would now cost almost $150 per day.

It’s been two years since the initial price rise in the spring of 2021 and what some have called “the rental car apocalypse”, so why does this situation persist today?  

Supply, Demand and Profits

Some say the reason prices have soared is simple:

  • Supply
  • Demand
  • Record profits

Higher car prices severely impacted supply:  rental car companies couldn't stock their fleets as fast as in the past due to supply chain issues and microchip shortages. Though fleet inventories finally grew again in 2022, they still have a long recovery to fulfill pent-up demand after companies sold off massive portions of their vehicle inventories to offset bleak demand during the pandemic. Consider that the Avis Budget Group alone sold 250,000 vehicles in 2021.

After the pandemic, demand skyrocketed as more people travelled in general, tourism activity and in-person business trips have approached pre-pandemic.

Finally, there was the issue of profits: some rental car companies had their best profit and revenue years and seek to make up for the lost years of the pandemic. Consumers continue to show a willingness to pay more to get around, so they are not inclined to reduce costs soon with continued high consumer demand.  

Relocation Impact and Options

While the auto rental market may seem a small piece of a complex permanent move or international assignment, consider the times relocating employees / families may need to rent a car:

  • For orientation /home finding trips to the destination to explore the new community
  • When vehicles are needed at the departure location while relocating families’ cars are also being shipped to the destination
  • When individuals inbound from another country may not be able to purchase an auto upon arrival in the destination

To contain costs, NEI Global Relocation Account Executives proactively guide relocating families in coordinating all schedules to minimize additional costs associated with such waiting periods.

Further, to make the best of the personal or professional travel situation, one might consider the following suggestions by NerdWallet to find available vehicles at the lowest prices:

Consider ways to avoid driving altogether. Public transportation, especially in large cities, can significantly reduce the cost of a trip.

  • Check out alternatives to traditional rental car companies. Turo, Getaround and Audi on demand all offer different pricing and rental models, which could save money.
  • Make smart shopping choices. Not all rental car companies have the same prices, nor do all locations. For example, renting a car at the airport is 26 percent more expensive than a downtown location, according to a NerdWallet analysis of 360 rental car reservations to better understand the cheapest ways to rent.  

Among the rental car companies in the analysis, Enterprise was often the cheapest, while National was often the most expensive. It also found that last minute rentals are typically cheaper than those booked months in advance, and one may almost always save by booking at an off-site rental car location versus at the airport.

NerdWallet also recommends using a search engine that compares several rental car companies to obtain the best rate. However, make sure  the final price  includes all taxes, fees, and insurance costs needed.

Last, but not least, don’t over-pay for coverage that might already be provided through your credit card benefits.

 

Freedom to Get Around

It is believed rental car prices might come down later this year or early next. However, we’ve heard this before and statistics regularly show people are traveling for pleasure and business today more than ever and making up for lost travel opportunities due to the pandemic.

Renting a car can be a rewarding experience – allowing for independence and freedom – but stress and relocation costs can be minimized with proactive awareness. NEI consistently works with our clients to discuss the most cost-effective options available.

 

If you would like to discuss this or other relocation / travel policy trends or cost-saving solutions, please reach out to your NEI representative.

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Top Global Mobility Risk Mitigation Challenges for Corporate Relocation

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Top Global Mobility Risk Mitigation Challenges for Corporate Relocation

Top Global Mobility Risk Mitigation Challenges for Corporate Relocation

International assignments are integral components of many companies’ global growth strategies, but with such global growth comes risks that can keep corporate mobility managers up at night.

A Dynamic Global Mobility Landscape

The landscape of global mobility risk is complex and filled with potential potholes on the road to an employee’s successful international assignment. Political instability, security concerns, and/or health and safety issues are some of the top challenges employees and their sponsoring employers may face.

Addressing issues surrounding corporate global relocation risks requires a proactive, honest, and detail-oriented approach. It is critical corporate managers overseeing employee international assignments are knowledgeable and empowered from within and form close, collaborative partnerships with experts. This will help them navigate hazards with confidence and ensure the well-being of their employees and the duty of care obligations of their employers sending them.

Consider the top risks and ways to mitigate them:

Security

Terrorism, crime, geopolitical tensions –each pose unforeseeable dangers. Progressive companies will implement comprehensive security assessments and threat analysis to identify vulnerabilities and develop targeted risk mitigation strategies. Employee training on situational awareness, personal safety protocols, and emergency response procedures should be conducted. For clients, leveraging cutting-edge technologies such as online dashboard “heat maps” to show company employee / business travel assignment locations and cybersecurity protocols enhances online security to monitor and respond to potential threats in real-time.

Political Instability

To address political instability, global mobility managers must see the importance of staying ahead of political risks. They build networks of local partnerships and leverage geopolitical experts to gain valuable insights into the countries and regions where employees are assigned. By developing crisis contingency plans and protocols, they can respond quickly to political shifts, ensuring the safety of employees and the continuity of operations.

Health and Safety

Pandemics, natural disasters, employee medical conditions, on-assignment emergencies and more demand meticulous preparation. Proactive risk management involves developing crisis response plans, integrating remote monitoring systems, and ensuring access to telemedicine. By conducting pre-assignment medical assessments, organizations can identify any pre-existing health conditions and provide continued, appropriate on-going assignment support and resources. There are also options available for medical insurance coverage to consider such as:

  • Employer-sponsored health insurance: comprehensive plans for employees provided with employment; covering medical expenses. Includes check-ups, emergencies, hospitalization, and dental/vision.
  • International private health insurance: individual plans for global medical expenses; covering inpatient and outpatient services, emergencies, and medical repatriation.
  • Travel insurance: May provide limited coverage for emergencies, accidents, and medical repatriation, but there is usually a limit for travel insurance policies and how long one can be living in a foreign location; companies should understand all policy limitations.

Crisis response and emergency evacuation plans are often overlooked in the overall planning of a move, but doing so is essential. Doing so during a crisis is not the time.

Regularly monitoring and checking in on employees’ well-being on assignment – regardless of their location – is also best practice and NEI regularly checks in with employees during their assignments for clients.

Collaborative Relocation Services Partnerships

By forging strong, mutually supportive partnerships with NEI Global Relocation, risk consultants, expert global security firms, global emergency evacuation companies, as well as local authorities, companies will gain access to invaluable expertise and worldwide resources.

Sharing best practices through industry collaborations and information-sharing networks further strengthens risk management efforts. Engaging in 24/7 open lines of communication with employees creates a culture of safety and empowers employees to be active contributors in risk mitigation.

Collaborative partnerships also foster a sense of mutual support and shared objectives among global mobility stakeholders. By combining resources, knowledge, and expertise, companies can effectively address complexities surrounding global mobility risks and strengthen both their operations resilience and the well-being of their employees during a global assignment on the company’s behalf.

Global Relocation Duty of Care Responsibility

As organizations expand around the world and send employees to locations for permanent work or temporary projects, each employer has an obligation to safeguard their mobile workforce.  The Duty of Care concept includes a legal, ethical and moral obligation to reduce risk and provide the elements for a safe environment for employees during their global relocations or assignments.

By prioritizing Duty of Care, companies can demonstrate their commitment to not only individual employee / family welfare, but a commitment to conducting thorough risk assessments, implementing proactive security measures and developing robust health and safety protocols.  Integrating Duty of Care principles and strategies into risk mitigation strategies, companies can foster a culture of employee safety and well-being.

Transform Risk into Opportunity

NEI believes risk management is essential for protecting both employee and company interests and for navigating the complexities of global mobility.

Organizations can transform risks into opportunities for growth, innovation, and sustainable success. By embracing risk management and mitigation practices, HR professionals can steer through the various, fluid challenges of international moves and assignments with confidence and help ensure the success of their organizations’ goals and projects.

If you would like to discuss policy change, risk mitigations or duty of care or any other topic impacting your global relocation programs, please reach out to your NEI representative.

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Keep Calm and Relo On!

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Keep Calm and Relo On!

Supporting Stressed Out Relocating Employees Today with Ease

Employees on the front lines of customer service across the United States feel that bad behavior from the public is more common today than before COVID and that insults, rants, and rudeness are on the rise. Why is this happening more and how can it be best dealt with?

Post-pandemic Incivility

Any customer service professional knows they are likely to encounter a rude, impatient, or irrational customer among the countless pleasant and professional ones served. In the latest National Customer Rage Survey, 17 percent of Americans admitted to being uncivil in interactions with businesses.

Nevertheless, the frequency of irritable people seems clearly on the rise compared to the past. This could be attributed to more people reporting lower levels of sleep, exercise, and self-care and higher levels of stress, daily costs and being time-starved. In fact, Americans who want more time in their lives are happier than those who want more money, according to the journal Social Psychological and Personality Science

The phrase “Everyone has a Microphone” captures the inclusiveness of online communications in today’s hyper-digital age, but it also enables people to use more harsh language behind a keyboard than if the same interaction was face-to-face, for instance.  Psychologists feel technology, despite its many benefits, can sometimes lead to human disconnection when a human touch is needed most.

After all, according to a Harvard Business Review article “Frontline Work When Everyone is Angry,” the average person takes in considerable amounts of negativity online each day – both consciously and unconsciously – and the content one consumes not only affect ourselves, but others too.

A strong relocation management partner will appreciate that moving can be a stressful life event for employee/family customers. Patience and empathy, as well as turning any negative encounters into opportunities for growth and positive outcomes, are the difference. Consider the following service tactics.

A Deeper Empathetic, Service Mindset

Simon Sinek once said, "Communication is not about speaking what we think. Communication is about ensuring others hear what we mean."

Understanding and acknowledging emotions behind a customer’s anger or impatience is key to addressing their concerns in a positive manner. It may be difficult and feel contrarian to do so in the moment, but seeing a situation through a customer’s eyes, acknowledging their frustrations, and making them feel heard can change the tone of a conversation and create calm.

This begins by hiring the right people and preparing front line professionals for success. Prepping front line team members to handle challenging customer interactions requires intentional efforts and, through workshops and role-playing exercises is necessary to learn to respond calmly and confidently-- even in the rare occurrence of hurtful verbal abuse.

Active listening, positive language, and clear expectations are the pillars of impactful communication

and communicating effectively can turn tense situations into opportunities for resolution.

"My Account Executive makes you feel very welcome and that she always has time for you. Even when my husband was getting feisty with her over something that was NOT in her control, she maintained her professionalism and even harder, her cheery attitude. Not many people can do that...”

~ NEI Client Relocating Employee Customer

Tailoring Solutions to Relocating Employees

American technology executive and writer Sheryl Sanberg said, “Leadership is about making others better as a result of your presence and making sure that impact lasts in your absence.”

Understanding different customer archetypes is akin to decoding a puzzle and each requires a unique approach. Whether it's addressing the impatient, building trust with the angry, or exceeding expectations of perfectionists, tailoring approaches leads to greater customer satisfaction.

Maintaining a professional, empathetic equilibrium fosters resilience to oversee difficult customer situations successfully and enabling companies to deliver service with a tailored approach for each individual. For instance, if a customer is curt or abrasive, it’s important to recognize they want the customer service representative to get straight to the point. Likewise, other relocating employee customers need to build trust with their representative and may need extra time to open up or discuss certain topics.

In every relocation management professional's service skills kit, identifying potential protection concerns and assessing when a client or management should intervene is paramount for protecting the customer service representative and team.

Finally, implementing instant and regular satisfaction and feedback mechanisms allow customer service companies, like NEI, to gauge the effectiveness of strategies and make data-driven decisions to enhance customer service efforts.  

“My Account Executive was the brightest spot…available, understanding, kind, always quick to reply and help find solutions…She was always there to provide support, peace of mind and a ray of sunshine.”

~ NEI Client Relocating Employee Customer

Rudeness: Like the Common Cold

Research reported in the Harvard Business Review shows rudeness may be like the common cold: “It’s contagious, it spreads quickly, anyone can be a carrier — at work, at home, online, or in our communities — and getting infected doesn’t take much.”

Yet, with a positive mindset – and by embracing patience, empathy, and effective communications – global relocation management professionals can transform challenging customer interactions into positive, lasting impressions and success stories.

Proactively counseling relocating employees is more than just connecting at key touch points. It’s also about appreciating and managing the emotional ups and downs of relocating. It’s about doing so with calm, grace, and professionalism.

 

For more information on our customer service approach and awards or any other needs or to discuss in more detail, please reach out to your NEI representative.

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NEI Spotlight on @Properties

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NEI Spotlight on @Properties

Expert Home Pricing for Corporate Relocation

In the fast-paced arena of global mobility, swift and efficient property sales are critical for seamless relocations. Partnering with a relocation management company, like NEI Global Relocation, which vets top-tier real estate agents for their relocation related experience can help expedite moves.

John D'Ambrogio of @Properties is one such relocation agent and explains why proper pricing for relocating families is so important.

The Parade Only Passes by Once

In real estate, timing is everything. The parade of potential buyers passes by just once. When a property is freshly listed at the right price, it captures the attention of a vast pool of potential buyers. However, delays or mispricing can lead to minimal exposure, longer time on the market, and missed opportunities for relocation managers.

The Power of Proper Pricing

Today's buyers value precision. Overpricing a property can deter them. The National Association of Realtors states that pricing a property correctly appeals to 60 percent of buyers, but just a 10 percent overpricing reduces this figure to 30 percent. This reinforces the need to offer competitive and fair corporate relocation services.

Timing Matters in Real Estate and Relocation

Timing is pivotal in both real estate and relocation. Seasonal variations significantly impact outcomes. Just as summer is the peak season for home sales, winter tends to be slower. Choosing a reputable relocation management company with a service partner network of quality agents can help you adapt pricing and strategies accordingly to ensure efficient transitions.

Conclusion

Successful pricing for relocation hinges on selecting the right partners and understanding the critical role of timing. If you're seeking a partner with a track record of professionalism and delivering exceptional results in corporate relocation services, don't hesitate to reach out to NEI Global Relocation.

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International Assignment Mentor Program Benefits

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International Assignment Mentor Program Benefits

International Assignment Mentor Program Benefits

Designing an effective mentor program in the home country for employees returning from an international assignment can greatly benefit employee retention.

Aiding The Competition

Sometimes, the “larger cost” of an employee’s international assignment may only be felt when they resign from the company after repatriation due to feelings of being unappreciated or underutilized.

Consider “Gustavo”, who completed an exciting two-year assignment in Latin America. Upon repatriation to his home country, he was relegated back to the same position he held before leaving. His managers didn’t know how to use his new skills and envious colleagues teased that his assignment looked more like a paid vacation.

He felt like his new professional growth and knowledge from the assignment counted for nothing, so he accepted a position with a competitor that valued it. Now, his old company competes against Gustavo daily - having paid for him to gain the valuable international experience.

“The employee sees the assignment as a passport to promotion,” writes Benjamin Bader, co-author on a repatriation study, “but the employer wants someone to get the job done and is not making any promises.”

Sadly, Gutavo’s situation above is not an exception: according to a report by Deloitte, 71 percent of employees who leave a company within two years of an international assignment think their leadership skills were not being fully appreciated.

Mentorships Make an Impact

What can be done to reduce such unfortunate and costly post-assignment situations?  Best practice assignment repatriation strategies to retain talent can include:

  • Planning and discussing expectations of post-assignment career possibilities.
  • Helping counter reverse culture shock, boredom, and re-adjustment difficulties.
  • Maintaining strong, regular communication to remain connected to the corporate office/team while on assignment.
  • Requiring home leave visits to the home country office to stay connected and consider post-assignment roles, rather than unrestricted home leave benefits to any location.
  • Conducting assignee career planning at least eight-to-ten months before their repatriation.

A missing, often overlooked option towards maximizing one’s Return on Investment is a low cost / high value international assignment mentor program that can improve the likelihood of repatriating employees hitting the ground running after repatriation and staying with a company long term.

Consider these remarkable corporate mentor program statistics:

  • Ninety percent of workers who have a mentor report being happy in their job and 71 percent of people with a mentor say their company provides them with good opportunities to advance in their career, per a CNBC/Survey Monkey report.
  • Employees who are involved in mentoring programs have a 50 percent higher retention rate than those not involved, per MentorcliQ.
  • Millennials intending to stay with their organization for more than 5 years are twice as likely to have a mentor than not (68% vs 32%), according to a Deloitte survey.
  • Since the pandemic, there has been a 30 percent increase in mentoring initiatives at organizations, according to talent solutions provider LHH.
  • 89 percent of those who have been mentored will also go on to mentor others, according to the firm McCarthy Mentoring.

After all, having someone who has been through an assignment and repatriation – and knows the inner workings of the organization can prove invaluable.

A Structure for Success

It is critical to get employees on assignment thinking about “post-assignment life” well in advance of repatriation.  

It has repeatedly been shown how important it is for employers to recognize and validate returning assignees' new “international identity” by giving them opportunities to use their skills learned on assignment for their employer.

Home country mentors can add a personal touch -- based on their own, previous repatriation experience and going through a similar transition. Consider the following steps to develop a program by starting small and building up the programs over time:  

1:  Define objectives.

Make program goals realistic so they are obtainable. If there’s too much formality, the mentor programs risks being seen as the company pushing a “feel-good directive” and it might turn people off from participating if it’s seen as more work with no direct benefit.

2:  Keep it simple.

A successful home country mentor program could start with a small pilot program that includes a handful of employees going on assignment and mentors who have been through the process. Programs that take a proper amount time to gather the appropriate volunteers and budget, while piloting a small-scale effort, will succeed more often before engaging in company-wide home country mentor program.

3:  Identify and pair mentor cadres.

Finding willing mentors may prove a challenge. Opinions diverge on the best approach to forming each mentor-employee connection. Some firms use an application and interview process while others let employees on assignment choose from a pool of approved mentor names. A good mentor is like a good coach who asks the mentee probing questions based on their repatriation experience to help them transition back and discuss potential expectations, challenges, and opportunities.

4:  Choose desired training approaches.

Formal, informal or hybrid training? No matter the approach selected, a mentee should be asked up front what they want to get out of such a mentorship program.

5:  Setting clear and realistic expectations.

Setting clear expectations upfront in writing and counseling each assigned mentor-employee pair about your company’s vision for the program is key, as is the program’s expected timeline, personal boundaries, and the need for confidentiality between parties.  HR should make clear to all involved that the mentor’s role is not to help secure the repatriating employee a new position or advocate for them before they return. Ultimately, that is commonly the employee’s responsibility at most companies today.

6: C-suite buy in for the program.

Finally, having buy in for an assignee mentor program initiative from one’s C-suite on down the chain of command is imperative. As noted in Success Magazine: “If you start a mentorship program that does not involve the C-suite, it will fail. Senior management should be heavily involved in setting guidelines, actions and goals for the program.”

Executives can also host quarterly, small group virtual sessions with company employees on assignment “so protégés can benefit from their wisdom and insight – without the tinge of favoritism that could otherwise arise” if they were to act as direct mentors themselves.

Challenges and Opportunities

One may think people would embrace the opportunity to become a mentor to others, but there are challenges to consider for attracting mentor candidates. These can include time, interest, and motivation:

  • Time:  In an already time-starved business environment, who has the time to oversee this program is one consideration, but even the most motivated mentors may defer from participating if they’re already too busy and it’s not part of their core objectives.  
  • Interest:  The best mentors are those who have volunteered (not “voluntold”), who get satisfaction from helping colleagues, and who have themselves also had international assignment experience. According to Jan Rose of Capital H Group, in Chief Learning Officer magazine: “People lose interest…People lose track of what the program is supposed to do…Mentoring program failure might occur because the program’s goals are either fuzzy or they’re all over the place.”
  • Motivation:  If a corporate culture is ultra-competitive internally or there may be concerns about future downsizings, mentors may not want to coach their fresh-off-an-assignment colleagues.

For employees who have concerns over the above attributes, but the right past experience to help an assignee, there are additional perks mentors experience beyond helping a colleague.

It is found that employees who mentor typically raise their visibility within the organization and expand their personal network of contacts and mentors are 6 times more likely to be promoted, according to stats compiled by the Human Resources department of Sun Microsystems, writes Anne Fisher of Fortune Magazine.

Mentorships today also don’t need to be down the hall, in the same building or even the same country. Mentoring can be done via phone, Zoom, FaceTime, Teams, or email.

Finally, “Tapping into a mentor’s knowledge doesn’t have to be a person who is older. We live in an era that, in a few years, over 50 percent of Americans will have a boss who is younger than them,” says author Chip Conley.

Better Than Finding Qualified Replacements

Ideally, the importance of “life after repatriation” would be discussed with the employee at the same time they accepted the assignment and, six months prior to returning. The company would distribute the employee’s information to divisions and company hiring managers with open positions that would complement the employee’s experience.

Combined with this approach, mentor programs are highly effective to make employees feel supported before, during and after assignments. Though they seem easy on paper, internal planning and oversight for ongoing success and sustainability is key. It is a low-cost effort that can differ greatly by organization, but mentorship programs can make a lasting, positive impact on employee satisfaction, retention, and company ROI.

For more information, please contact your NEI representative.

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Real Estate Market Uncertainty

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Real Estate Market Uncertainty

The first half of 2023 is behind us...

...But there’s much economic and real estate market uncertainty going into the second half for renters and homeowners. How will this affect global mobility and relocation services?  

Real Estate Market Tug of War

Lawrence Yun, Chief Economist, National Association of Realtors (NAR) recently captured the changing real estate market conditions succinctly: “The market is clearly turning.”

Yet demand is not diminishing with the scarcity of single-family homes and there’s only a three-month supply of existing inventory. Add on to that, one-in-seven homeowners refuse to sell due to current mortgage rates. This puts continued pressure on rising home prices.

“Home price trends are caught in a tug of war between stretched buyer budgets and limited inventory forcing competition despite reduced affordability,” said Danielle Hale, Chief Economist for Realtor.com.  

What can be done to help relocating employees with this issue in 2023 and 2024?

Good News / Bad News: First Time Homebuyers

While lower home values could hurt sellers, any listing price drops may entice buyers to submit offers – especially Millennials who rent. This is especially true for the record number of American renters who are spending at least one-third of their income on rents, according to Harvard’s Joint Center for Housing Studies.

However, paying a lower home purchase price and then having to finance it with a high interest rate can seem like “good news/bad news” to first time home buyers. In Q2 2023, the share of all prospective buyers who are in the market for the first time dropped to 61 percent, down from 71 percent in the first quarter per the National Association of Home Builders.

New construction has become an alternative solution for some frustrated buyers. Sales in the $200,000-$300,000 range for new builds surged in May 2023 to 12,000 new home builds sold, compared to May 2022 when only 5,000 sold. With that in mind, 51 percent of all housing market construction in Q1 2022 was for high-cost / luxury rental units and this shift towards higher-cost rental units has been observed through Q1 of 2023, per Moody’s.

Companies can help renting relocating employees who wish to become homeowners. NEI sees more companies now offering reimbursement of destination home closing costs and direct-billed mortgage partner assistance to relocating renters.

Another method companies can use to help recruit critical talent to needed locations is to offer homebuyers funds towards new home down payments or other incentives in the form of forgivable loans that don’t have to be paid back unless the employee leaves the company within a certain period, perhaps two or three years.

High-Rate Environment Drives Corporate Relocation Assistance

There are limited incentives for homeowners to give up their low mortgage interest rate when securing a new 30-year fixed mortgage since the average rate now sits in the seven percent range - over double the average rate during the pandemic.

Fed Chairman Jerome Powell was watching the unfolding situation carefully: “Housing is very interest-sensitive…it’s one of the first places that’s either helped by low rates or held back by higher rates.”

With possibly one or two more Federal Reserve rate hikes expected this year, consider the following options to help employees/candidates consider a company-sponsored move in such a high-rate environment:

  • 3-2-1 Interest-Based Mortgage Subsidy

An appealing option for companies to consider is a subsidy program that supports mortgage payments over a set period to help the employee ease into the higher mortgage payment.

Many companies use a three-year period with the subsidized rate decreasing each year until the company would no longer subsidize interest. For budgeting, some prefer to define a maximum subsidy dollar amount spent per year for the benefit.

  • Mortgage Interest Differential Allowance (MIDA)

MIDA was developed as a solution to assist employees purchasing a home at a significantly higher interest rate. Eligibility is based on if a specific interest rate threshold is passed (e.g., 7.5 or 8 percent with at least 2 percent differential on the employee’s existing mortgage). The company would temporarily pay the difference in interest between the employee’s former mortgage rate and their new one, for a set amount of time. The MIDA is sent to the lender and reflected on the employee’s payment.

Some mobility policies require employees to invest their full equity from the sale of the old home into the new home’s purchase to be eligible and maximums are sometimes placed on the total differential.

  • Prepaid Interest

Companies can pay for loan discount points to assist relocating employees facing higher rates on a home purchase. Discount points are paid up front in exchange for a lower interest rate over the life of the loan.

Some mobility policies have a sliding scale for points coverage tied to the current market rate. If using a sliding scale, it may make sense to lower thresholds. Companies may offer to pay for one point when rates reach seven percent, two points at eight percent, and so forth. Thresholds help keep pace with changing rates and make moving more agreeable. Because this benefit impacts the life of the loan, this may not be the best option for an employee who could be relocated again within a few years.

Few Economists Expect Housing Crash

Predictions about a housing market crash create headlines, but few economists expect a nationwide decline like 2007-2009. Consider some big differences today:

  • There are simply not enough homes to meet current demand and the country ultimately needs 4.3 million more homes, according to a Zillow analysis.
  • Most homeowners with a mortgage today have great credit, significant home equity and a low rate. Housing prices in October 2022 were 38.1 percent higher than they were at the start of the pandemic in March 2020, per Fortune.
  • About 90 percent of U.S. mortgaged homeowners have an interest rate below 6 percent, a Redfin report showed. 62 percent have a rate below 4 percent and nearly one-quarter have mortgage rates below 3 percent.
  • Home value increases or decreases are more impacted by location today as compared to nationwide 15 years ago. Western U.S. home values have been hit particularly hard.
  • Finally, we have strong consumer demand today and unsold inventory sits at a 3.1-month supply. “There are simply not enough homes for sale,” said Lawrence Yun of NAR. Realtor.com reported home sellers were less active in June 2023 with 25.7 percent fewer homes newly listed for sale compared to 2022.

For comparison, there was an 11-month supply of inventory in June 2008, interest rates were 6.32 percent, and 33.8 percent of homeowners were in a negative equity position. Since then prime mortgage requirements have become significantly tighter.

Unpredictable Markets, Proactive Relocation Services

The U.S. may likely end 2023 with higher short-term interest rates, but Moody’s Analytics Chief Economist Mark Zandi anticipates housing affordability will improve over the next few years, as reported in Fortune magazine.

Zandi feels rates will drift towards 5.5 percent in 2025 and national home prices may fall around eight percent, but "In our thinking this [price] weakness plays out over the next three years, there's no cliff event here, it's more of a slow grind lower," Zandi told Fortune.

NEI proactively counsels relocating employees about the emotional ups and downs when buying/selling a home and during the necessary negotiations, and we help clients brainstorm solutions. NEI monitors market and economic conditions to proactively discuss various options with clients, so client recruitment and retention goals are achieved.

For more information on the above or other needs or to discuss in more detail, please reach out to your NEI representative.

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.

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Banking Regulations Changes

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Banking Regulations Changes

Changes Coming to Banking Regulations in the UK

An important change was announced regarding the list of countries where supporting assignees in opening bank accounts is allowed while still in the home country and prior to arrival in the UK.

Previously, global bank HSBC had been able to open accounts for residents of 27 EU countries while they were still in their home country. Due to changes in cross-border regulations and recent developments regarding Brexit, the number of eligible EU countries has been reduced to 12 with immediate effect.

Please see the revised list of 12 EU countries below, provided by NEI’s London-based service partner Icon Relocation, where HSBC can support assignees with a UK account before arrival in the UK. There is no change with supported international countries outside the EU.

Note: this chart relates to the country of residence, not the nationality.

According to Icon Relocation, assignees living in the approved countries can provide proof of their overseas address. HSBC and Barclays Bank will continue to support other assignees once they have arrived in the UK without the need for proof of a permanent UK address.

Reminder of Documents Required

  • Proof of identity document, e.g., passport.
  • Address verification document for one’s residential address in the UK or overseas. HSBC can accept a letter from one’s employer that must be from a member of the HR team, issued on UK company letterhead, and include employment dates. The letter must also include a UK address if known or an overseas address if the UK address is unknown or not yet confirmed.
  • Salary verification may be required.
  • Verbal disclosure of Tax Identification Number.

NEI and our global service partners will continue to provide clients with updated information on this topic and others as they arise and to manage relocating employee expectations accordingly.

If you would like to discuss this visa and immigration situation further, 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. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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Housing or Schooling: Which Comes First?

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Housing or Schooling: Which Comes First?

NEI Service Partner Spotlight - Bennett International

This month’s NEI Service Partner Spotlight features Bennett International’s President, Timothy Dwyer, discussing the challenges associated with coordinating school and home selections for all relocating assignees and their families.

What to Focus On?

It’s the mobility world’s equivalent of the “chicken or the egg” conundrum: when preparing to move to a new location, should the family focus first on schooling or on housing? In an ideal world, the child would be placed in a school with an appropriate curriculum that is a good match for their learning style and needs, while the family’s housing would be in a vibrant, safe neighborhood not too far from both the school and the parents’ work locations. That ideal world can be tough to achieve.

Making the right choices for both housing and schooling are crucial to the success of an international assignment, but getting there often requires expertise in both areas and simultaneous, closely coordinated searches. And when the intention is for the children to attend public (free) schools (as opposed to fee-based Private or International Schools), the challenge becomes even more complex.

No Guarantees

Perhaps the most common misperception is that residing in a particular neighborhood— within the “catchment area” of a desired school—will result in the child attending that particular school. A "catchment" is a defined area of a community within which a school will normally accept students. Depending on the country and specific location, living inside the designated catchment area may improve the child’s chances of attending a particular school, but it is rarely a guarantee. There are several factors that might come into play:

  • Limited Space. The school might not have enough room. Neighborhoods with “good” schools tend to attract residents, resulting in schools being filled to capacity. Last year, in the greater London area, almost 20 percent of secondary school students did not receive a place at their preferred school because of limited space.
  • ​Special Needs. The child might have a special education need which is not adequately supported by the nearest school, and they may therefore be directed to a school better equipped to address their specific need. This could also happen if the child is not sufficiently conversant in the host-country language; many cities have public schools dedicated to supporting students with significant language needs.
  • ​Barrier to Entry. The nearest school might be a charter, magnet, specialized, or other type of selective school which has a barrier to entry. This might consist of academic prerequisites, a required examination, academic achievement and/or nomination from the child’s current school, some schools even employ a lottery system for entry.

Often the first steps of the admission process and related exams for these schools begin long before the start of the school year. Newly arrived families are at a distinct disadvantage when competing with those who have already been navigating the process for months or sometimes even years.

At the same time, finding suitable housing in the right location that is within the employee’s budget can also be difficult in many major cities. Often, desirable properties are on the market only briefly before they are snatched up. Yet a relocating family can be hesitant to commit to a property until schooling is settled. The challenge in that situation is that many public schools can require proof of long-term residence (such as a signed lease) before they will allow a child to enroll.

Close Collaboration is Key

When housing and schooling both pose challenges for relocating families—a situation we see in many high-volume destinations—the most effective answer is for the home-finding and education advisement experts to work closely together throughout the relocation process. They must be able to form a team, balancing the priorities and requirements in each area while keeping the family’s best interests front and center. Few things can be more frustrating for a family going through the stress of relocating than receiving contradictory guidance from different members of the team assembled to support them.

When Bennett is part of a relocation support team, we embrace good coordination with our settling-in and real estate partners. We have seen how thoughtful, friendly, and creative collaboration between all players on a relocation team is the key to a seamless and positive experience for the relocating family. Indeed, it’s the well-woven safety net of expert service providers that can transform the assignee and family experience from one of uncertainty and stress to one of clarity and excitement. Our goal is for the assignee to not only realize that an assignment can “work”, but to welcome it as a rich and thrilling next chapter—for them and for their children.

If you have questions about the support available to relocating families on international assignments, please contact Mollie Ivancic, VP International Services at NEI Global Relocation.

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NEI Spotlight on PrimeLending

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NEI Spotlight on PrimeLending

NEI Service Partner Spotlight - PrimeLending

One of the best things you can do for yourself when you're getting ready to buy a new home is to know how much home you can afford. Read more for a glimpse of the type of trusted advice PrimeLending offers tranferees. Click here for details.


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NEI Spotlight on Corporate Living

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NEI Spotlight on Corporate Living

NEI Spotlight on Corporate Living

Discover how extended-stays make temporary living easy and seamless for transferees from their full-service residential complexes offering apartment-style accommodations, real-time booking systems, fully-equipped kitchens, spacious layouts, and flexible rental agreements.

Download the infographic here.

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NEI Spotlight on Furnished Quarters

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NEI Spotlight on Furnished Quarters

NEI Service Partner Spotlight - Furnished Quarters

This month’s NEI Service Partner Spotlight is on Furnished Quarters and how they serve the dynamic needs of today’s temporary housing needs across multiple countries.

Read the whitepaper here.

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NEI Spotlight on Homebuyers Preferred

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NEI Spotlight on Homebuyers Preferred

NEI Service Partner Spotlight - Homebuyers Preferred

This month’s NEI Service Partner Spotlight is on HomeBuyer's Preferred and the ins and outs of radon in your home or rented space. Why is radon important to mitigate? What happens if you don't? Click HERE for the infographic.

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Global Rent Increases and the Impact on Company Relocations

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Global Rent Increases and the Impact on Company Relocations

Surging Global Rent Prices

Rent prices worldwide have been surging at an alarming rate, increasing by 23.5 percent since 2019; with a projected compound annual growth rate (CAGR) of seven and two tenths percent for rental properties until 2027.  This global phenomenon is driven by multiple factors, such as:

  • Growing preference for renting among millennials
  • Limited housing supply
  • Rising homeownership costs
  • Return of transferees or natives to their home countries

These soaring rent prices are compelling companies to reassess their relocation strategies. Let's delve into the rent increases across different regions and explore the implications for company relocations.

United States and Canada

Renting instead of buying has been more popular for individuals and transferees. According to Dwellworks, the United States has been building rental supply at a significant pace, with nearly 400,000 multi-family units being built since April. However, Single-family units are still behind on the amount of supply needed to cover the demand for transferees who might prefer a home.

Rental markets are still seeing a spike in demand for rental units however, with most of these being cities based in the Midwest due to their lower cost of living, the highest rise in rent YOY include:

  • Indianapolis, seven and four tenths’ percent YOY
  • Kansas City, seven percent YOY
  • Chicago, Columbus, Cincinnati, and St. Louis, six percent YOY

According to Realtor.com, the average monthly rent for a one-bedroom apartment in the U.S. from May 2023 is $1,628 USD and $1,903 USD for a two-bedroom apartment. Like the U.S., Canada is grappling with a shortage of housing supply and escalating demand. The average rent for a one-bedroom apartment in Canada stands at $1,811 CAD ($1,356 USD), while a two-bedroom apartment commands $2,239 CAD ($1,677 USD). It is unlikely that the rent will lower in Canada anytime soon, best-case scenario is that rents will remain the same.

Little to no new construction, particularly in cities like Toronto and Vancouver, coupled with high immigration rates have further exacerbated the rental price surge and international transferees are usually placed near the bottom of the priority list.

EMEA

Europe overall has seen a spike in rent increases due to inflation and shifting relocation patterns, keeping transferees in major urban cores.

In the United Kingdom, the Renter's Reform Bill is awaiting a second reading in Parliament. While the bill aims to grant transferees more rights, such as protection against arbitrary evictions and accommodations for children and pets, it has inadvertently triggered a wave of evictions by private property owners and a significant spike in rental prices. As of April 2023, rent in the Greater London Area reached £2,516 GBP ($3,170 USD) per month for a one-bedroom flat, and a two-bedroom flat going for £3,448 GBP ($4,344 USD). This represents an increase of nearly £200 compared to the previous year.

In Dubai, rental prices have soared due to intense competition to acquire a "golden visa," a slowdown in construction activities, and stricter financing policies. Between January and April 2023, rents surged by almost 26 percent, with the average monthly rent for an apartment reaching 8,556 AED ($2,330 USD).

APAC

Singapore has experienced a staggering surge in rent, with an average monthly cost of $5,075 USD, surpassing Hong Kong as the most expensive rental market. Although experts anticipate a potential cooling down later in the year, Singapore's measures to stabilize the market and a decline in demand resulting from tech sector layoffs have influenced rental prices. Moreover, native Singaporeans are increasingly choosing to rent as singles, adding to the growing demand.

Australia has witnessed an 11.2 percent increase in median house rent during the first quarter of 2023. Factors contributing to this surge include the reopening of borders, high immigration rates, proprietors capitalizing on the heightened demand, rising construction costs, and favorable tax policies for property owners.

Conclusion

As the world navigates a new way of life, these rent fluctuations may persist, posing challenges for relocating employees and temporary assignees. NEI recognizes the complexities involved in global mobility and strives to secure suitable housing for transferees and assignees well in advance. While being proactive and starting an early search is important, understand that housing costs will still be high. Allocating an appropriate budget remains the most crucial step.

NEI works globally with local destination service providers who are on location and in country to provide the most timely and relevant picture of local market conditions. They can provide the best options available at any given time. If you have concerns related to the global escalation of rental rates, please reach out to your NEI representative for more information.

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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Travel Authorization Systems Update

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Travel Authorization Systems Update

Travel Authorization Shifts

Enforcement of three new travel authorization systems have been postponed again in the U.S. and Europe:

  1. ETIAS (European Travel Information and Authorization System) – until 2024
  2. The UK’s ETA (Electronic Travel Authorization”) visa waiver – dates vary by county
  3. REAL ID – delayed until May 2025

ETIAS Postponement

Europe receives over 37 million visitors each year, so the introduction of ETIAS – similar to the U.S. ESTA program (Electronic System for Travel Authorization registration system) – is expected to have a significant impact on travelers from around the world, including the globally mobile workforce.

The roll-out for ETIAS has been planned for years, but the start date has been repeatedly pushed back from 2020, 2022 and 2023, to launch in 2024. There is speculation the new 2024 date could be pushed back further, perhaps after the Summer Olympics in Paris concludes on 10 August 2024.

Once implemented, all visitors who previously travelled visa-free to Europe’s Schengen Zone will be required to register in advance online. To register, individuals will need a passport valid for three months beyond the intended stay, an e-mail account, and a credit or debit card. Passengers will be required to complete an online application form that covers a range of biometric, travel and security related questions. Data will be checked against a variety of European and International databases including no fly lists, to identify potential terrorist and criminal threats who will then be refused entry via the ETIAS program.

When up and running, it is expected most ETIAS applications will take 20 minutes to complete, but time will vary based on additional fields one may need to fill out. Applications may be processed and delivered by e-mail within one hour if no further checks are required, but it could take upwards of 96 hours if additional information’s needed. An application fee will be €7, though travelers under the age of 18 or over the age of 70 will not need to pay a fee.

United Kingdom ETA Visa Waiver

Coinciding with the EU’s introduction of ETIAS next year, the United Kingdom (UK) announced that its “Electronic Travel Authorization” (ETA) visa waiver will be implemented this fall, with a fee of £10 per applicant and mandatory for all foreign visitors, including those from the U.S., requiring them to apply online before their trip.

The UK will gradually implement the ETA, starting with Qatar citizens in November and extending to travelers from Bahrain, Jordan, Kuwait, Oman, Saudi Arabia, and the UAE in February 2024. Other nations – including the U.S. – will need to apply for the ETA by the end of 2024.

REAL ID Postponement

To help improve airline security, Congress passed the REAL ID Act in 2005 and the U.S. Transportation Security Administration and other federal agencies announced they would require REAL ID compliant licenses for people 18 years old and older to fly anywhere within the U.S. starting in May 2023.

However, the Department of Homeland Security announced the deadline would be extended until 7 May 2025 since state motor vehicle departments need more time to process the backlog of applications created by COVID-19 and only about 50 percent of the U.S. population has REAL ID compliant documentation.

Secure REAL ID will “set standards for the issuance of sources of identification, such as driver’s licenses” and will have a star at the top of the license. When enforced in 2025, it will be required for every air traveler 18 or older at airport security checkpoints for domestic travel. Those under 18 must be travelling with an individual who has acceptable documentation.

To get a REAL ID license, a person typically will need to show proof of their full legal name, date of birth, Social Security number, two proofs of residence and lawful status. Lawful status means that the person will need to provide valid documentary evidence that they are lawfully in the United States per Section 202.(c)(2)(B).  

Still, despite REAL ID requirements, other documents may be substituted or used instead when enforcement starts in 2025. These may include U.S. passports, Department of Homeland Security-trusted traveler cards, U.S permanent residence cards, federally recognized tribal-issued photo IDs, and USCIS Employment Authorization Cards.

Costs will be tied to local fees associated with obtaining driver licenses or identification cards. Employers should encourage their employees to determine if their current identification includes the star. If not, it would be good to advise them to obtain the REAL ID designation to avoid unnecessary delays obtaining the necessary documentation for traveling by air by the 7 May 2025 start date.

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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New Country Initiatives to Attract Top International Talent

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New Country Initiatives to Attract Top International Talent

Nations Revamp Immigration for a Skilled Workforce

Global competition to attract top talent and skilled labor is heating up as countries look for every edge to attract the best foreign workers and students. To that end, countries are shifting immigration policies to favor the best candidates and help solve internal economic and demographic challenges.

Intense Country Competition

The 2023 Hiring & Workplace Trends Report produced jointly by companies Glassdoor and Indeed finds there will likely be a persistent tight supply of workers for years to come in key economic sectors and without sustained immigration, an increase in labor productivity or a focus on attracting workers, many industrialized countries will continue to struggle with a tight labor market.

Countries are implementing new programs to not only understand where new talent may come from, but also which countries’ talent pools they can best attract and then changing immigration requirements to support this.

Successful governments are implementing four key strategies to attract international talent, according to the Mauve Group, a provider of Global Business Solutions and Consultancy Services:

1. Introducing new work visas

2. Shifting immigration policies

3. Targeting incentives for specific occupation shortages

4. Offering financial incentives and better benefits

Consider this small sample of recent country-specific schemes to attract talent:

  • The UK feels its High Potential Individual (HPI) visa route will attract the "brightest and best" early in their careers allowing identified talent permission to stay in the UK for at least two years.
  • Hong Kong says its “Top Talent Pass Scheme” will raise its international competitiveness by offering them a two-year visa that allows them to work, establish a business or change employers in Hong Kong.
  • Finland’s “Talent Boost” program aims to attract high-skilled workers from Vietnam, as well as Brazil, Turkey, and India.
  • Canada’s New Brunswick province hosted recruitment sessions for candidates of specific countries, such as Nigeria, the United Arab Emirates, and Argentina.
  • Bahrain’s Golden Residency Visa helps international workers stay in Bahrain permanently.
  • The German government announced plans to make it easier for IT workers from India to obtain German work visas.
  • The United Arab Emirates extended its Golden visa program to attract skilled foreign talent -- professionals, scientists, and researchers - to live, study, or work in UAE for 10 years.

Clearly, a post-pandemic global battle for talent and immigration shift is underway, one that will be critical to the future success of many countries as demographics and economies evolve.

Country Case Study: Japan

Every country’s immigration scheme has their own specific and highly unique details for candidates to qualify for entry and attention to details cannot be emphasized enough.

Consider the example of Japan, which ranked 41st of 63 economies in 2022 for attracting and retaining talent. To improve its position in the high-stakes global talent game, it recently introduced two new visas, the J-Skip and the J-Find:

  • The “J-Skip” Visa, aimed at attracting special, highly skilled professionals to Japan.
  • Requirements: Individuals who hold at least a master’s degree or 10 years’ relevant work experience with an annual income of 20 million JPY ($143,530 USD) or more can apply for either a Highly Skilled Professional (i)(a) - advanced academic research activity or a Highly Skilled Professional (i)(b) - advanced specialized/technical activity. Individuals with 5+ years of practical experience in business management with annual income of 40 million JPY ($287,060 USD) or more can apply for a Highly Skilled Professional (i)(c) Advanced business management activity.
  • The “J-Find” Visa, designed for recent graduates of highly ranked universities to pursue job or entrepreneurship opportunities in Japan. They will be allowed to stay in Japan for up to two years for job hunting and preparation for starting a business. They can also accompany their dependents, such as spouses and children.
  • Requirements: Status of residence will be granted by Japan to graduates of a university ranked in the top 100 of at least two of the following three World University rankings* within the last five years and have an amount of deposit and savings of at least 200,000 JPY ($1,435 USD) for living expenses when applying.  * QS Top Universities, the Times Higher Education World University Rankings, and Shanghai Jiao Tong University’s Academic Ranking of World Universities.

Further supporting this effort and a talent pipeline, Japan’s Council for the Future of Education Creation also recently announced an initial proposal to further “internationalize” higher education with the goal of attracting over 400,000 foreign students from overseas institutions and encouraging them to work in Japan after they graduate.

Global Talent and Immigration Shift

It is clear countries will continue modifying visa and immigration laws to help boost their future economies and compete as popular destinations for global talent.

If you would like to discuss this or other immigration or global mobility trends or company needs, 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.

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Amendments to Non-Canadian Residential Property Purchase Ban

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Amendments to Non-Canadian Residential Property Purchase Ban

Canada's Relocation Property Rules Eased

On 1 January 2023, the Canadian Government imposed restrictions on non-Canadians from buying residences with the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which prohibited relocating employees from purchasing a home in Canada until certain restrictions were met . We’re happy to provide some recent updates that have amended the situation.

After much lobbying from the Canadian Employee Relocation Council (CERC) and Worldwide ERC, Ahmed Hussen, Canada’s Minister of Housing and Diversity and Inclusion, announced amendments to the law that will help alleviate stress for anyone who is considering moving to Canada.

Updated Amendments

  • Non-Canadian employees with a valid work permit who work in Canada for at least 183 days may now purchase a single home.
  • The requirements for a non-Canadian investor owning equity in a private Canadian business was increased from 3 percent to 10 percent. Once the equity threshold has been met, these investors will also be able to purchase a home.
  • Non-Canadians may now purchase property for development purposes, such as vacant lots, zoned for residential or mixed use.

“These amendments will allow newcomers to put down roots in Canada through home ownership and businesses to create jobs and build homes by adding to the housing supply in Canadian cities,” says Hussen.

Unfortunately, non-Canadian relocation management companies (RMCs) are still not able to acquire homes as part of a Guaranteed Buy Out or Buyer Value Option program.

NEI will continue to keep our clients updated with any further developments as they occur.

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Unprecedented U.S. Passport Delays

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Unprecedented U.S. Passport Delays

Passport Processing Woes Persist

The Pandemic may be officially over, but U.S. citizens in need of a passport are facing increased challenges with passport processing times.

Millions in Backlog

During COVID, there was a government backlog of 1.7 million U.S. passport applications. Today, the U.S. State Department reports “unprecedented” delays in processing documents due to software and staffing issues with some three million applications now backlogged.

Though the Department issued a record 22 million passports in 2022, the weekly volume of applications so far this year is 30 to 40 percent higher than last year with an influx of about 500,000 new passport applications received each week now.

Before COVID, it took about four-to-six weeks to process a passport after receipt. Today, after receiving the application, new estimates for processing and issuing passports are more than three-to-four months. Mailing times can add additional weeks to a month and some people report receiving their passports five months after applying in the traditional manner and even four months after paying for an expedited service.

Further, many countries have "six-month passport rules," where they will not accept entry by travelers whose passports will expire less than six months after the beginning of their trip.

Prepare Extra Early

In addition to the current backlog, 23 percent of U.S. adults say they plan on traveling internationally this summer – up from 20 percent in 2022. For U.S. citizens planning international travel this year, whether it is personal or business related, if you need a passport preparation should begin well in advance to avoid delay.

Just how far in advance? A minimum of four to six months when using expedited shipping is recommended. Consider the following:

  • Applicants should make certain details and supporting documents (like pictures and driver’s license) are 100 percent correct to avoid delays.
  • If travel is this October or later, applying the traditional way is likely safe, but your application should be submitted immediately with expedited shipping.  
  • If travel is this August or September, one can potentially still get a passport in time, but will need to pay a fee to expedite processing as well as expedited shipping, but there is no guarantee.

Checking on Passport Status

You can check the status of an in-process application by visiting the U.S. Passport Application Status page. If there is a proven life-or-death emergency or urgent international travel coming up within 14 days, one can try making an in-person appointment at one of 26 passport agencies throughout the U.S., but an appointment to visit an agency is mandatory and the only way to make an appointment is by calling 1-877-487-2778 between 8 a.m. and 10 p.m. ET, Monday through Friday. Spaces are limited and agencies do not accept walk-in services.

Expediting Agencies

Expediting agencies are companies that assist with rushed passport applications and charge an additional fee on top of the standard passport application fee and expedited passport service fee. The fastest turnaround time is one week for $799 or a two-week option for $599, but even these can be limited in availability since expeditors rely on a subset of appointments being available.

In limited cases, expediting agencies may have extremely limited availability of next day or three day turnaround slots, but these are very few and often attract a much higher management fee from the agency according to EIG, one of NEI’s Visa and Immigration (V&I) service partners. There are various passport expediting agencies that offer these services, with each being allocated a certain number of faster appointments. So, if the agency first approached does not have any available appointments, it is worth checking with an alternative provider directly.

Newland Chase, another V&I service partner, suggested that companies may consider having their frequent business travelers obtain a secondary U.S. passport which would be valid for four years and could be quite helpful if an application is tied up in process and international travel is required.

NEI will continue to provide clients with updated information on this topic and manage relocating employees’ expectations accordingly. If you would like to discuss this passport situation further, please reach out to your NEI representative.

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Top Five Reasons Employees Hesitate to Relocate

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Top Five Reasons Employees Hesitate to Relocate

Navigating Relocation Concerns

Relocating employees often face various challenges and concerns when considering a move. Understanding these common hesitations can help employers better support their employees during the relocation process. Based on data from 2022, we’ve identified the top five reasons why employees are hesitant to accept relocation assignments.

#5: Undisclosed Personal Reasons

During a relocation, families may have sensitive personal reasons that they hesitate to disclose. As part of our commitment to supporting relocating employees, NEI's Account Executives are trained to observe and listen for subtle cues. By being attentive, we can address specific needs, such as accommodating a newborn with extraordinary medical requirements.

To help employees meet the needs of undisclosed concerns, many companies offer their employees more choice in selecting benefits that best fit their needs by using technology like NEI's iSelect tool or providing a “You” Allowance to access additional funds for needs unique to their situation. These types of actions bring peace of mind to relocating families and ensure smooth transitions.

#4: Unfamiliarity with the Destination Location

Moving to a new area can be daunting, as families leave behind the comfort of their old home, family, and friends. Studies show that three out of four Americans express regrets after relocating, with acclimating to a new community being a significant stressor.

At NEI, we recognize the importance of personalization and strive to match relocating employees with real estate agents or service partners who understand their situation and can help minimize their concerns. Our city search tool allows your employees to explore their new location and connect with identified essential services, such as information about schools, shopping, parks, or community events.

#3: Financial Considerations

Financial concerns are a common worry for relocating families. Rising housing costs and fluctuating interest rates pose challenges when purchasing a new home. If they are moving to a higher cost-of-living location, the concerns increase. NEI works closely with relocating families to help them thoroughly understand the available relocation benefits the company is providing to ease financial burdens.

We consult with our clients extensively in developing competitive benefits that lead to greater transferee satisfaction while minimizing corporate expense. Our Client Relations Managers partner with our clients for whatever they need, such as running cost-of-living analyses (COLA), advising them on various ways to support homeowners during challenging real estate markets, or offering significant insights on any topics of concern to aid acceptance rates.

#2: Health and Safety

In an ever-changing world, health, safety, and security are paramount concerns for relocating families. One way that NEI helps to reassure them of the new location is to collaborate with local real estate agents or destination service partners for an area orientation. Advising them of the various neighborhood nuances and desired amenities is important prior to making any decisions. Obtaining this type of information helps relocating families feel confident they are making good decisions about relocating and where to settle. It prioritizes their sense of well-being so they can settle into their new environment with peace of mind.

#1: Spousal/Partner Acceptance

The support and acceptance of a spouse or partner significantly influences an employee's decision to accept a relocation assignment. NEI recognizes the importance of spousal acclimation and recommends that companies provide this type of support because one of the top reasons for a failed relocation or assignment is an unhappy spouse or partner.

For example, if the relocating family needs to maintain a dual income household, helping that person acquire a new position can be essential to a successful relocation and a productive employee. Additionally, NEI continues check-ins with relocating families for extended periods, up to six months or longer, if needed, to ensure a smooth transition and address any concerns.

Conclusion

At NEI, we understand that effectively relocating a family goes beyond finding them a new home. NEI founder, Chairman and former school psychologist, Kate Dodge emphasized, “The significance of supporting and grounding the family is critical during the relocation process. Our commitment to Service Exceeding Expectation means that we go above and beyond to ensure satisfaction from all parties involved.”

By placing proper focus on these top five concerns—undisclosed personal reasons, unfamiliarity with the destination location, financial considerations, health and safety, and spousal acceptance—companies can make each relocation a positive experience.

Should you like to discuss any of these topics further, please contact your NEI Representative.

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New Travel Authorization Systems Postponed Again in U.S. and Europe

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New Travel Authorization Systems Postponed Again in U.S. and Europe

New Travel Authorization Systems Postponed Again in U.S. and Europe

Enforcement of two new travel authorization systems have been postponed again in the U.S. and Europe:

  1. ETIAS (European Travel Information and Authorization System) – until 2024; and
  2. REAL ID – until May 2025

ETIAS Postponement

Europe receives over 37 million visitors each year, so the introduction of ETIAS – similar to the U.S. ESTA program (Electronic System for Travel Authorization registration system) – is expected to have a significant impact on travelers from around the world, including the global mobile workforce.

The roll-out for ETIAS has been planned for years, but the start date has been repeatedly pushed back from 2020, 2022 and 2023, to launch in 2024. There is speculation the new 2024 date could be pushed back further, perhaps after the Summer Olympics in Paris concludes on 10 August 2024.

Once implemented, all visitors who previously travelled visa-free to Europe’s Schengen Zone will be required to register in advance online. For European countries which will be using ETIAS starting 2024, please see click here. To register, individuals will need a passport valid for three months beyond the intended stay, an e-mail account, and a credit or debit card. Passengers will be required to complete an online application form that covers a range of biometric, travel and security related questions. Data will be checked against a variety of European and International databases including no fly lists, to identify potential terrorist and criminal threats who will then be refused entry via the ETIAS program.

When up and running, it is expected most ETIAS applications will take 20 minutes to complete, but time will vary based on additional fields one may need to fill out. Applications may be processed and delivered by e-mail within one hour if no further checks are required, but it could take upwards of 96 hours if additional information’s needed. An application fee will be €7, though travelers under the age of 18 or over the age of 70 will not need to pay a fee.

REAL ID Postponement

To help improve airline security, Congress passed the REAL ID Act in 2005 and the U.S. Transportation Security Administration and other federal agencies announced they would require REAL ID compliant licenses for people 18 years old and older to fly anywhere within the U.S. starting in May 2023.

However, the Department of Homeland Security announced the deadline would be extended until May 7, 2025 since state motor vehicle departments need more time to process the backlog of applications created by COVID-19 and only about 50 percent of the U.S. population has REAL ID compliant documentation.

Secure REAL ID will “set standards for the issuance of sources of identification, such as driver’s licenses” and will have a star at the top of the license. When enforced in 2025, it will be required for every air traveler 18 or older at airport security checkpoints for domestic travel. Those under 18 must be travelling with an individual who has acceptable documentation.

To get a REAL ID license, a person typically will need to show proof of their full legal name, date of birth, Social Security number, two proofs of residence and lawful status. Lawful status means that the person will need to provide valid documentary evidence that they are lawfully in the United States per Section 202.(c)(2)(B).  

Still, despite REAL ID requirements, other documents may be substituted or used instead when enforcement starts in 2025. These may include U.S. passports, Department of Homeland Security-trusted traveler cards, U.S permanent residence cards, federally recognized tribal-issued photo IDs, and USCIS Employment Authorization Cards.

Costs will be tied to local fees associated with obtaining driver licenses or identification cards. Employers should encourage their employees to determine if their current identification includes the star. If not, it would be good to advise them to obtain the REAL ID designation to avoid unnecessary delays obtaining the necessary documentation for traveling by air by the 7 May 2025 start date.

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Introducing iSelect from NEI Global Relocation

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Introducing iSelect from NEI Global Relocation

NEI Global Relocation (NEI) is thrilled to introduce the latest in core-flex technology. Today’s relocating families want to be empowered to select benefits that fit their specific needs. That desire is nothing new, nor is the fact that companies have been using core-flex programs internally for some time now.

What is new is iSelect, our revolutionary design that improves the employee experience with choice and an online tool featuring opportunities to explore their options and various combinations of benefits before deciding what is best for them.

With iSelect, their onboarding experience begins with confirming and updating their information.  From there they are taken to a brief explanation of their core benefits, then quickly advanced to the selection process for their flex benefits. A points calculator is visible to show them how their budget is impacted with each selection.  Once initial selections are complete, your employee can easily coordinate a meeting with their NEI Account Executive through a collaborative calendar.

iSelect makes every relocation a personalized experience and NEI is here to help your relocating families think through their moves, manage the delivery of benefits and answer questions, enabling your employees to stay productive.

The entire process is streamlined, flexible and personalized!

It’s the latest in core-flex technology and we can’t wait to show it to you. Current clients should contact Cindy Beitel, CRP, NEI SVP, Global Client Relations to learn more. If you are not an NEI client, but would like additional information, please reach out to Pam Jacknick, CRP, GMS, NEI SVP Global Client Development.

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NEI Spotlight on IOR Global Services

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NEI Spotlight on IOR Global Services

NEI Service Partner Spotlight - IOR Global Services

Cultural training is a critical component of preparing for an assignment in a foreign country. Customs and communication styles can vary significantly and raising awareness of those differences can help relocating employees navigate the nuances of a new location.

In the linked infographic, you can see a glimpse of the type of information that is shared when working with one of our service partners, IOR Global Services. Click here for details.

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API Integrations and Relocation - What You Should Know

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API Integrations and Relocation - What You Should Know

API Integrations and Relocation - What You Should Know

API integrations for relocation are the future of working faster and more efficiently. As global mobility professionals face growing responsibilities and increasingly complex processes, workflow efficiencies become more important to meet your talent objectives.

That’s where API integrations demonstrate true value. APIs, or Application Programming Interfaces, create communication protocols between business systems, automate workflows and streamline processes within and outside your organization.

Automation drives efficiencies for HR Mobility teams, all who touch your mobility processes, and improves the overall experience of your relocating employees. Automated workflows allow your team members to focus on what is important – securing critical talent and getting them where they are needed as quickly as possible.

It also helps your business scale for future growth by leveraging technology.

UNITE Integration Platform
NEI's UNITE Integration Platform simplifies the integration process to easily connect client and supply chain partners within a highly efficient mobile workforce management system to:
  • Seamlessly integrate systems and synchronize data between the client and NEI
  • Automate entire business processes, including authorizations, relocation activities, invoicing, compensation, and tax gross-up
  • Drive efficiencies and improve the overall experience of your relocating employees through the timely delivery of quality services

While technical staff are needed for API integrations, NEI’s UNITE Integration Platform minimizes the one-time investment to create efficiencies throughout your relocation lifecycle. This investment pays long-term dividends, freeing up time and energy for what matters most - getting the right people in place to unlock new business capabilities for your company.

In Summary

As a full-service global mobility company offering related global compensation and consulting services, NEI Global Relocation (NEI) uses UNITE to unify the entire relocation experience.

Innovation through API integration is a strong focus toward our collaborative approach to provide trustworthy, consultative mobility solutions that make the relocation process work better, so you can achieve your talent agility objectives.

For more information on how UNITE can improve your workflows, please contact  NEI Global Relocation.

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NEI Recognized by HRO Today

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NEI Recognized by HRO Today

NEI Global Relocation once again makes the HRO Today Baker’s Dozen for Relocation! NEI is one of only two companies to be recognized in the survey for at least 11 of the past 13 years, indicating strong consistency in satisfaction for the services provided to our clients and their relocating employees.

“We are very appreciative of our clients taking the time to participate in this survey,” said Randy Wilson, SCRP, President | CEO, NEI Global Relocation. “Time is precious, especially for today’s global mobility professionals. Our employees work very hard to ensure each relocating family has a positive experience and this type of recognition is important to see given the challenges we have all faced over the past two years.”

The Baker’s Dozen for Relocation is one of two annual industry surveys measuring client satisfaction among global mobility providers, the other one being the Trippel Relocation Managers’ Survey, which provides more overall detail. NEI is also a high performer in that survey, achieving more #1 rankings than any other relocation management company in each of the last three surveys.

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International Shipping Costs: Lower, but for How Long?

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International Shipping Costs: Lower, but for How Long?

A Welcome Price Drop

The ocean is a giant “highway” of vessels moving containers of goods across the globe. During the pandemic and until recently there were significant price increases for overseas shipping, but global shipping costs are back down to pre-pandemic levels.

  • Shipping a 40-foot container from China to a U.S. west coast port was down 93 percent from its high of $20,600 in September 2021.1  That’s roughly equal to February 2020. Shipping costs from China to U.S. east coast ports and to Europe have also decreased.
  • Other global shipping routes have seen costs fall also: freight charges on Europe-to-U.S. routes dropped from highs of $16,000 to around $3,000.

This is welcome news, but will the trend last for corporate relocation?

NEI Global Relocation has advised clients since the start of the pandemic that companies' global mobility programs should remain prepared and flexible for the unexpected in such uncertain times. Today is no different.

What 2023 Could Bring

Issues that could threaten lower international shipping costs and fewer delays may include:

  • Geo-Political Disruptions: The world has become more economically linked, and any military conflict can force the system to adapt in unpredictable ways including areas declared off-limits to shipping. Russia’s invasion of Ukraine could further disrupt global transport.
  • China’s COVID Surge: This threatens to upset 2023 global supply chains again and could increase supply chain volatility. Three major ports across China have already experienced new supply chain delivery problems because of COVID and at the Port of Shanghai, the world’s number one container port, cancellations have increased.2
  • Container Shipping Reliability: This will remain volatile in 2023 as a recent report found that global vessel schedule reliability had a 56.6 percent on time record in December – a huge improvement from 30 percent recorded earlier in 2022 – but the average on time was 74 percent in 2018 and 2019.3
  • Rising Oil Costs: The shipping industry keeps a close eye on oil prices as fuel costs can correspond to 50 or 60 percent of a ship’s total operating costs, depending on vessel size. When oil prices/demand are on the rise and as China reopens after ending its Zero COVID policy, the shipping industry may pass those higher costs on to customers.
  • Labor Shortage / Labor Strikes: Beyond finding moving crews / drivers, the global transportation infrastructure is under regular threat from labor strikes. 2022 saw many strikes at both air and seaports. The chances of new strikes disrupting supply chains in 2023 are high and there is pressure on employers to increase salaries with global inflation.
  • West Coast Ports Avoidance: Cargo owners are seeking new supply-chain options and diversifying their port entry locations. Shippers continue to reroute to gulf and east coast ports, away from California, due to higher cost of transporting freight over land, labor disputes with dockworkers, and rail workers' unions causing uncertainty.

Despite these risks, some feel freight volatility and international freight shipping costs may continue to decrease. Dubai-based global logistics company DP World expects global freight rates to drop by a further 15 to 20 percent in 2023.

Relocation Assistance Risk Considerations

Given the potential risk factors detailed above, what does this mean for client companies and global relocation assistance?  

Foremost, one should remember that:

  • Potential rate increases could re-bound in 2023 if the recent, positive circumstances change; and
  • Shipments could get delayed or re-routed to other ports, increasing time for one’s expected goods.

Companies need to continue to weigh the impact of potential, quickly changing rate increases and associated incremental costs of delayed shipments (e.g., temporary housing) on their budgets against the increased delays for relocating employees who could have to wait longer than expected for their goods should global supply chain disruptions arise.

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

  • Remaining flexible on fluctuating rates due to swiftly changing economic conditions and budgeting for changing international container rates in your cost estimates.
  • Working with the best partners to develop processes that include verification of all options, freight costs and that any increases or above average costs are genuine.

To be prepared for shipping costs to be fluid in the year ahead, set expectations with relocating employees and consider alternative policy considerations for shipping household goods internationally, if applicable.

NEI Guidance and Diligence

NEI continues to be diligent about client costs for every single move. Our Client Relations Managers will work with each client to discuss the most cost-effective international household goods shipping options available and considerations for providing a relocating employee a small allowance towards being without those goods due to a longer transit.

To proactively discuss various options with our clients that may assist them in reducing or avoiding costs, NEI constantly monitors market and economic conditions so talent goals can be met.

For more information on this situation going forward, please reach out to your NEI representative.

Sources: 1) Freightos; 2) SCNBC; 3) Sea-Intelligence’s “Global Liner Performance” Report.

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U.S. Renters' Housing Shortage

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U.S. Renters' Housing Shortage

U.S. Renters' Housing Shortage

Renters make up a significant share of annual moves each year in the U.S. as they continue to be attracted to better weather, lower costs of living, stronger job prospects and/or wanting to be closer to family. Here is how it affects relocating employees.

Areas Most Impacted

There is a clear migration trend for renters:1

  • More want to move out of the Northeast and West; and
  • The South and Midwest remain popular destinations.

But key factors impact both those simply wanting to move and those relocating at the request of an employer: availability, competition, and affordability.

What reasons are behind this and what assistance is available for renters?

Availability

In most markets, the biggest challenge for renters moving is a serious shortage in available housing and an underbuilding gap of 5.5 million to 6.8 million units.2

Jeffery Hayward, Executive VP and Chief Administrative Officer at Fannie Mae, points out most housing-cost-burdened households are not just in coastal or metros, but also in less expensive metros – like Fresno, Charlotte, and Las Vegas. Even smaller metro areas lack housing that’s affordable.

Consider the following “availability” factors:

  • Restrictive zoning increases the challenges nationally. Robert Dietz, Chief Economist at the National Association of Home Builders. "In certain neighborhoods you simply cannot build townhouses. You have to build single family units on lots that are bigger than the market wants." 3
  • Institutional investors continue to purchase and rent out properties, owning about 700,000 of the 20 million single-family rentals in the U.S. today.4
  • Renters also face the “Airbnb Effect” where landlords convert long-term rentals for local residents to short-term vacation housing, thus decreasing housing supply. A study found short-term rentals have caused a larger reduction in affordable housing than any other income level of rental housing.5

Competition and Affordability

An average of 14 apartment seekers competed for a single rental across the U.S., but it’s even more challenging around ultra-competitive areas. San Diego – the 13th most competitive apartment market in the nation – has an average of 22 apartment seekers competing for each of the few available apartments.6

Since COVID, renters also face higher monthly leases with an overall increase in rents of 6.2 percent in 2022, marking the second-highest annual rent growth in this century, according to Yardi Matrix’s multifamily report. That growth rate is behind only 2021’s nearly 15 percent rise.7

However, that growth rate is well behind the rent growths in popular markets. From November 2021 to November 2022:

  • Chicago was among the most robust in the Midwest region with average rents rising by 8.6 percent - $1,773 to $1,925. 8
  • Phoenix rents surged 26 percent.
  • Las Vegas rents jumped 23 percent.
  • Charlotte residents saw rents climb 13 percent.9
  • Florida metro areas of Naples, Sarasota, and Tampa jumped between 29 percent and 39 percent the past two years.10

Renter Expectations, Experts and Effective Efforts

For companies that need to relocate employees to challenging rental markets, setting expectations in advance and pairing your people with the right local experts will result in the most effective efforts to compete for the best rental opportunities.

Expectations
  • Relocating employees often must look farther out from a job site and accept longer commute times than years’ past – and may still have difficulties locating adequate housing.
  • Managing renters’ expectations earlier is important: they need to know finding an apartment has become increasingly difficult and the type of housing they are accustomed to may now be beyond their budget.
Experts
  • In the past, renters may have been offered only a lump sum and expected to make appropriate relocation decisions on their own. Such an approach rarely ends up working out well in the current environment given the competitive market and low housing availability.
  • It is critical to work with local, on-the-ground experts who really know the rental market in each location. NEI is independent, so we can work with the most reputable and qualified rental agents, Destination Service Partners, and real estate brokers to preview potential apartments and rental homes before showing them.
Effective Efforts

Following a needs analysis, NEI’s Account Executives arrange for customized area orientation tours (if authorized) and provide access to our city search tool to acquaint themselves with the area before the home finding trip. Various service plans are available based on one’s program needs:

  • NEI’s Home/Rental Finding Assistance minimizes time required for relocating employees to find suitable housing – whether as buyers or renters. We refer the families to reputable, qualified real estate brokers or rental agents to help in searching for their new home based upon specifics given through the initial needs analysis. NEI’s Rental Guide provides pertinent information to consider when leasing a property.
  • Under NEI’s Extended Rental Assistance Program, we provide each agency with verbal and written instructions to anticipate the needs of employees, as well as clear expectations, required timelines and reporting requirements for the rental search. Our Account Executive follows up with the rental finding agent and calls the transferring employee after the initial contact, during, and just after the rental finding trips to ensure satisfaction. They remain in contact with the employee until a lease is finalized.

The Extended program may also include an area orientation tour to acquaint the employee with the new area and a guided tour of available rentals to quickly identify the most likely areas to meet the employee’s housing needs. Various service levels can be selected based on your program needs. This program is highly recommended for those moving to large, high cost of living areas.

Relief in Sight?

There could be good news for renters across the country in the months ahead:

  • Rents for both single-family homes and apartments are rising at a slower pace as of December 2022, but relief rates vary by market.11
  • Experts forecast an increase in the number of new homes, condos, and apartments coming to market. Apartment deliveries are projected to spike with more than 917,000 units under construction across the U.S. – the second largest volume increase the country has ever seen.12
  • Home prices may decline in 2023 giving renters a potential window to purchase a home. Economists’ predictions for U.S home-sale prices run the spectrum for 2023: some feel it could remain stable and even re-bound again later this year, others expect a drop of 10 percent or more if there’s a sharp recession.

"This spike in prices in the short term should be followed by moving toward a new equilibrium, which does mean a bit of a cooldown in housing costs," senior economist at Zillow, Jeff Tucker.13

For more information on how NEI can help your company and your relocating renters in today’s volatile market, please reach out to your NEI representative.

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.

1 Rent.com; 2 National Association of Realtors; 3 National Public Radio; 4 Roofstock.com; 5 2021 Carnegie Mellon University; 6 RentCafe.com; 7 Yardi Matrix; 8 Zillow; 9 Douglas Elliman and Miller Samuel; 10 CoStar Group; 11 CNBC/CoreLogic; 12 RealPage Market Analytics; 13 USA Today.

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The Importance of Tracking Business Traveler Days

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The Importance of Tracking Business Traveler Days

Crucial Insights into Business Travel Tracking

From crossing state lines to crossing international borders, a company’s Duty of Care obligation is a compelling reason alone to keep close track of employees on business travel.

Need another great reason? Tax compliance!

A Critical Commonality

Business travelers can span the full range of an organization’s company ladder, from C-suite executives, recruiters and salespeople to in-the-field technicians, drivers and interns visiting different facilities. Methods of employee travel will also consist of various forms of transport getting to a destination.

Once they arrive, however, all share a critical commonality: they and their employers are subject to the tax laws, rules, and regulations of the local jurisdictions where they work.

Companies typically differentiate “business travel” from “short-term assignments” based on the number of days an employee is expected to travel and be on the ground in a specific location. Yet, internal company policies or travel definitions might not fully or consistently address all destination tax obligations and/or reporting requirements.

As more nations and states seek to collect income tax on the earnings of visiting business travelers to increase tax revenue opportunities, tracking and reporting employee movement has become significant.

Recognizing Risks & Reducing Surprises

Employees and employers must carefully adhere to various requirements to allocate and report income and withhold and remit taxes on business travelers’ earnings, but the ability to provide consistent, comprehensive travel reports for analysis is an obstacle many companies still face internally.

An NEI global tax partner, Deloitte, points out that surprises can be reduced by 1) recognizing the risks emanating from a mobile workforce; and 2) working collaboratively to answer the following questions for further action:

  • Who are the organization’s business travelers?
  • In which jurisdictions are they working?
  • What compliance obligations are generated?

Reporting on the whereabouts and business activities surrounding company business travelers is either frequently inconsistent or not addressed within most companies due, usually, to no specific group or stakeholder having the knowledge and capability to comply with the countless unique regulations by location.

Taking the lead to get one’s company in compliance – or in a better shape to comply – may seem a daunting task. The next question becomes who is best to lead the quest to answer the above three questions and proactively address the consequences of regulatory enforcement?

The answer will vary by company, but a senior executive sponsor is key for momentum, oversight and decision making, as is forming a cross-functional, collaborative team with members from Human Resources and Talent Management, Mobility, Payroll, Finance, Tax and Corporate Travel departments – those who understand the issues and can work together to mitigate risks.

Data In = Data Out

This collaborative team will be responsible to review the business analytics around travel data for improved compliance efforts, but what if available data is sparse or inconsistent?

Some companies may find it seriously challenging to generate required travel data and reports for analysis. In addition to understanding how travel details for each individual employee can be consistently obtained, the Global Tax Network, an NEI global tax partner, suggests that meaningful reports for analysis would need to show whether:

  • Business travel actually was taken on all days indicated on the report.
  • The employee used part of the time at the destination location for personal reasons.
  • The employee booked a business trip outside of the company’s travel department.
  • The employee listed on the report was the one who traveled or did another employee(s) travel in their place.

With technology advancements and departments sharing more information – such as travel and workday calendars, smartphone tracking apps, relocation travel reports, and more – the capability to track business travelers has come a long way compared to two-to-five years ago. This can prove helpful to track business travelers and analyze the data for risks.

Compliance Ready

Awareness of an employee’s work location and enforcement of business traveler compliance has become a more prominent issue since work-from-anywhere became popular and travel has increased again following a sharp COVID-related decline.

Despite increased administration costs and some initial hurdles, business travel compliance is much less stressful and costly than any noncompliance and expensive tax surprise consequences to either the employee or employer. Addressing business travel in such a manner also supports Duty of Care issues and knowing where all employees are should a crisis occur.

NEI understands there are many questions companies have and challenges faced when it comes to reporting for compliance regarding business trips, whether for tax, immigration, insurance, or countless other topics. If you would like to discuss business travel or other compliance trends, please contact your NEI representative.

The above article is provided 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 making any decisions or transactions.

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First-Time Home Buyers Face Continued Headwinds

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First-Time Home Buyers Face Continued Headwinds

The Art of Housing Supply and Demand

Low home inventories, high housing prices and interest rates have slowed younger, first-time buyers from both becoming homeowners and the potential wealth-building aspect of owning a home. Consider that:

  • About 65 percent of American households own their own home.
  • Between 2010 and 2020, the total value of owner-occupied homes in the U.S. rose from $8.2 trillion to a staggering $24.1 trillion, according to the National Association of Realtors.
  • Unlike rent, a homeowner with a fixed-rate mortgage provides more stability in knowing the principal and interest payment will not change, regardless of inflation.
  • First-time homeowners may qualify for tax credits.

Historically, first-time home buyers made up about 40 percent of sales; but that percentage has dropped this year.

An Up Hill Climb and a Moving Target

Increasing mortgage interest rates and escalating home prices have become a high hurdle for home buyers, especially for first-time buyers. Now, they are forced to stretch farther. Consider that:

  • The average rate on the 30-year fixed mortgage -- the most popular product today –started this year around 3 percent and is now approaching 7 percent.
  • According to Realtor.com, in 2021, Millennials in the 23 to 31 age range paid a median price of $250,000 – today it is $280,000;  and those 32 to 41 paid a $315,000 median purchase price in 2021 vs. today’s median of $350,000.
  • Per Redfin, the typical homebuyer’s monthly mortgage payment has climbed $337 (15 percent) over the past six weeks to a new high of $2,547.

As qualifying for loans have become more stringent to secure, there’s been a significant uptick in adjustable-rate mortgages (ARMs) which have lower monthly payments. At the start of 2022, ARMs made up just 3.1 percent of loan applications. More than 12 percent of borrowers applied for ARMs in June and July – the highest percentage of ARM applications since 2007 -- according to Zillow.  9.1 percent of September’s loan applications were also ARMs, according to the Mortgage Bankers Association.

Taking out an ARM may be seen as a “gamble” on what rates will do in the future. Though rates could decrease during the adjustable-rate period of the loan, monthly payments would be higher should they increase.

Cash is King

Economists expect home prices will start slowing, and even dropping, in some of the most overheated markets in the country over the next couple of years.

Though sellers may lower asking prices, their homes may be listed on the market longer. This could benefit buyers who can afford to wait, but bidding wars put first-time homebuyers at a disadvantage since they usually have limited savings compared to investor buyers who are offering cash or other buyers who benefited from strong markets.

In fact, according to Redfin, homebuyers who offered all cash were more than four times as likely to secure a deal as those who did not, making it the most effective approach.

Though bidding wars may have slowed in competitive U.S. markets, they leave first-timers at a disadvantage. To secure a property, some buyers opt out of typical inspections or protection clauses. “A buyer’s odds of winning a bidding war,” according to Redfin, “increase significantly by waiving the financing contingency or conducting a pre-inspection”.

Buyers who used those strategies “were 31 and 25 percent more likely to win than those who didn’t, respectively.”

However, waiving inspections can have consequences. If an employee moves on their own or relocates with their employer again later, they may be required to complete those repairs out of pocket. NEI provides counsel to help avoid future property eligibility concerns such as excessive acreage, environmental issues or building / material defects to help mitigate future risk.

Helping Relocating First-Time Buyers

Given how volatile markets have been lately and because nobody’s housing market predictions are sure things, NEI counsels relocating employees about the emotional ups and downs when buying / selling a home and the necessary negotiations today. We help clients prepare for possible exceptions due to market circumstances out of relocating employees’ control and to brainstorm unique solutions that fit each company’s culture, budget and drivers.

Companies can also help relocating employees who are renters who want to fulfill their dream of homeownership. NEI increasingly sees more companies offering relocating renters destination home closing costs reimbursement and direct-billed mortgage partner assistance.

Another method companies can use is contributing to home purchases for first-time homebuyers by offering funds towards new home down payments or closing cost assistance or other incentives in the form of forgivable loans that don’t have to be paid back unless the employee leaves the company within a certain period, perhaps two or three years.

More of the Same

New residential construction slipped again in June as challenging financial conditions discouraged potential buyers. With home construction constrained by labor and supply chain issues, the housing problem isn’t going away soon.

“While we do expect home price growth rates to decline, we don’t expect prices to fall much at the national level. For home buyers trying to determine the best timing this year, the main benefit of waiting is that there may be less competition as supply starts to build up,” says Chen Zhao, Redfin’s economics research lead.

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.

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Signs of Progress with an Overwhelmed IRS

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Signs of Progress with an Overwhelmed IRS

Returning to normal causes an increase workload for the IRS

The Internal Revenue Service’s (IRS) workload has been increasing for years as its headcount has been contracting. Like other employers facing labor shortages, the IRS is having its own difficulties finding qualified job applicants, but there’s been signs of progress:

  • Congress provided the IRS with $80 billion in additional funding over the next 10 years to increase hiring. More than 5,000 new customer service representatives were hired in October 2022 with training expected to be completed by February 20, 2023.
  • The 4.7 million original individual returns backlog (Forms 1040) in January 2022 was reduced to about 400,000 by December, but is still anticipated to impact customer service.

Difficulty Reaching IRS Customer Service

Of the 173 million calls the IRS received during FY 2022, only 22 million or 13 percent got through to an IRS employee after an average wait time of 29 minutes. As a result, most callers could not get answers to their tax-law questions, receive help with their account problems, or speak with an employee about compliance notices.

Telephone service for tax professionals hit an all-time low of 16 percent to a Practitioner Priority Service (PPS) hotline after an average 25-minute wait time for those who got through.

What to Do

If you need to call them, some say they have better results reaching the IRS in the morning, starting as early as 7 a.m. Eastern time, and Wednesday through Friday seem to be the best days to reach a representative. However, one should still expect long waits.

The IRS admits phone service wait times are often longer on Mondays and Tuesdays, on weekends and the closer it gets to April’s filing deadline. It is important to:

  • be patient,
  • be polite, and
  • keep good records of contacts, attempted contacts, and one’s discussions.

The IRS has encouraged people to establish an online account at www.IRS.gov to help access information quickly. The IRS has invested in online capacities to provide taxpayers with a quick and easy way to access information so the calls for more complicated issues can be answered in a timelier manner.

If a call is necessary, the IRS encourages people to have all the information they need before filing a complete and accurate return. Organize and gather 2022 tax records including Social Security numbers, Individual Taxpayer Identification Numbers, Adoption Taxpayer Identification Numbers and this year's Identity Protection Personal Identification Numbers valid for calendar year 2023.

Relocation Families

For relocating families, it is important to understand how relocation expenses are reported on various countries’ tax forms from the company. In most cases, NEI provides information about relocation-related expenses directly on the relocating employee’s NEI website and have access to any summary reports of tax related expenses in this one place.

NEI helps answer questions related to relocation expenses as reportable income. Employers can help manage employee expectations by reminding employees who are “surprised” about the tax implications from their relocation that:

  • The policy they were provided indicated the tax implications.
  • The details of their expenses are available on their NEI website.
  • If they still have questions, they can reach out to their NEI Account Executive for more information.

For those moving cross-border, where two countries might be involved, tax expertise is always recommended, but here is some general information:

  • One-way moves: Most companies offer a tax briefing to help the employee understand the nuances of the tax regime to which they are moving. Some companies might help with the first year of professional tax preparation fees.
  • Assignments: It would be typical for companies to provide the tax preparation services for home and host countries.

In most cases, NEI coordinates with the company’s payroll or international tax provider to ensure they have all mobility expense information from the assignment to appropriately include in the home and host country payrolls.

Tips for Filing Taxes

“This filing season is the first to benefit the IRS and our nation’s tax system from multi-year funding in the Inflation Reduction Act,” said Acting IRS Commissioner Doug O’Donnell. “With these new additional resources, taxpayers and tax professionals will see improvements in many areas of the agency this year.”

The IRS encourages everyone to have all the information they need in hand for a complete and accurate return.

As with any tax year, filing for your taxes with accurate information is the best way to eliminate potential frustrations down the road, whether you are reporting child tax credits received or relocation expenses. NEI can’t help with the former, but we certainly can assist with the latter. Help for questions is just a call away…and NEI answers our calls!

The above article is provided 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 making any decisions or transactions.

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NEI SOC 1 & 2 Audit Success – ZERO Findings For Second Year in a Row!

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NEI SOC 1 & 2 Audit Success – ZERO Findings For Second 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 second year in a row and in five of the past six 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.

“This is an amazing accomplishment! We are so proud of our employees who always stay focused on the details and following our established processes,” said Michelle Moore, NEI Chief Global Mobility officer. “As a service organization, there is no higher compliment than to go through an extensive SOC 1 audit with ZERO findings. Thank you to all our employees for recognizing the importance of being consistent with processes and accurate with data.”

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.

“We are very excited to receive this kind of recognition with our SOC 2 audit,” said Greg Keith, NEI Chief Information Officer. “The fact that we have achieved “zero findings” so often means NEI employees are performing extremely well with our data security processes and controls. Privacy and liability concerns have increased the demand for assurances of confidentiality and privacy with customer data. These results clearly demonstrate our commitment to protecting confidential information.”

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, NEI was recognized with more #1 rankings than any other relocation management company in the 2020, 2021 and 2022 Trippel Relocation Managers’ Surveys.

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.

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2023 Tax Changes Affecting Relocation

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2023 Tax Changes Affecting Relocation

Upcoming Changes from the US IRS for 2023

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 2023.

Standard Mileage Rate

The U.S. Internal Revenue Service (IRS) announced an increase of the optional standard mileage rates in mid-2022 to 62.5 cents per mile for the second half of 2022. On 1 January 2023, the rate increased again to 65.5 cents per mile driven.

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.

Supplemental Rates

As some companies gross-up non-salary relocation benefits at supplemental rates for federal and state levels, most companies also withhold at supplemental tax rates for non-grossed items. Keeping on-top of supplemental rates and explaining the potential tax implications to your relocating employees can aid them in knowing what to expect when taxes are due.

Federal supplemental rates remain unchanged, holding steady at 22 percent withholding for supplemental wages under $1 Million and 37 percent withholding for non-salary wages over $1 Million.

For easy reference, we are providing the current state supplemental rates in the table below:

Federal Income Tax

While federal income tax rates remain unchanged from the 2022 tax year, 2023 income tax brackets have shifted dramatically to accommodate an over 40-year high inflation rate. Additionally, the 2023 standard deduction amounts have increased.

Due to these adjustments, most relocating employees can expect a modest reduction in their tax-liability. New grads stand to benefit the most from the changes, as the majority of graduates earned less than a full year’s wages when starting in the summer or fall.

See below for 2023 adjusted tax brackets which reflect an approximate nine percent increase from the prior year ranges:

Standard deduction amounts have also increased:

       

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 which is set by statue at 6.2 percent for both employees and employers to pay on the first $160,200 of wages in 2023.   This is up from $147,000 in 2022.

The second element referred to as the Medicare Tax, is also split evenly between employees and employers, is not subject to a wage limit and remains at 1.45% for both parties.    There are no changes to the remaining element called Additional Medicare tax.   This rate is 0.9% for the employee with wages over $200,000 for single filers and $250,000 for married filing jointly.   The employer does not get charged for this additional tax.

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 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.

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Making Relocations More Affordable for Employees

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Making Relocations More Affordable for Employees

Making Relocations More Affordable for Employees

A recent report shows 78 percent of those surveyed associate home ownership with the American dream1, yet one in two Americans see housing affordability as a serious problem.2 What does this mean for companies who need to relocate their employees?

It’s an indicator that employees may be reluctant to relocate for several reasons:

  1. They want stability for their family, given the challenges of the last few years.
  2. Anxiety over rapidly rising inflation, higher housing costs and increased mortgage rates.
  3. Fear of moving to a higher cost of living area with many unknowns.

These are all real concerns. According to Fannie Mae, only 16 percent of U.S. consumers believe that now is a good time to buy a home. Another alarming statistic: mortgage applications in November 2022 fell by 25.2 percent compared to the previous year.3

Interest Rate Impact

Last year, U.S. 30-year fixed mortgage rates had the biggest year-to-date rate increases in over 50 years. In January of 2022, the average rate was 3.33 percent – in January 2023 it was 6.58 percent!4 Negative buyer sentiment is often linked to mortgage rate increases.  

While today’s rates are historically low compared to the October 1981 peak of 18.45 percent, the escalation in home prices during the pandemic from mid-2021 to mid-2022 per the provided chart have greatly impacted employees’ concerns about relocating.

You can see why when you look at how a monthly mortgage for principal and interest has risen in one year. On a $360,000 30-year fixed mortgage (P&I), payments at the beginning of 2022 would have been $1,583 per month. By January of 2023, that same payment increased by $711 to $2,294!

Mortgage Rate Options to Consider

NEI helps client companies prepare for situations caused by market circumstances which are out of relocating employees’ control. Each company’s unique culture, budget, and drivers are taken into consideration when making suggestions to help retain talent while making your company attractive to new talent. Options to consider include:

Mortgage Interest Differential Allowance (MIDA)

MIDA programs were developed as a solution to assist employees when purchasing a home in the new location at a significantly higher interest rate. Popular options in the 1980s and 1990s, such MIDA policy benefits are getting dusted off again for consideration by some companies. As this benefit was rarely used over the last twenty years, any industry information or statistics are obsolete.

In this program, if a specific interest rate threshold is passed (e.g., 8 percent with at least 2 percent differential on the employee’s existing mortgage), the company would temporarily pay the difference in interest between the relocating employee’s former mortgage rate and their new one for a determined amount of time. The allowance is sent directly to the lender by the company and reflected on the employee’s payment.

Some companies require employees to invest their full equity from the sale of the old home into the purchase of the new home to be eligible. In addition, caps are sometimes placed on the total differential.

MIDAs can be difficult for companies from a budgeting perspective, however if the employee moves to a different home while the benefit is in effect, the coverage ceases and the company is no longer assisting.

3-2-1 Interest-Based Mortgage Subsidy

An appealing option for companies to consider is a subsidy program that supports mortgage payments over a set period of time to help the employee ease into the higher mortgage payment. Many companies use a three year period with the subsidized rate decreasing each year until the company would no longer be subsidizing interest. For budgeting purposes, some companies prefer to define a maximum subsidy dollar amount spent per year for the benefit.

Prepaid Interest

Companies can pay for loan discount points to assist relocating employees facing higher rates on a home purchase. Using a sliding scale, one point could equal one percent of a borrower’s mortgage and is interest that is paid upfront at closing. This lowers the rate for the life of the loan.

Some corporate mobility policies have a sliding scale for points coverage tied to the current market rate. If one uses a sliding scale, it may make sense to lower thresholds. Companies might offer to pay for one point when interest rates reach seven percent, two points at eight percent, and so forth. Thresholds help keep pace with changing mortgage environments and help make moving more agreeable.

Because this benefit impacts the life of the loan, this may not the best option for an employee who could be relocated again within a few years.

Unpredictable Markets and Economic Conditions

Prospective home buyers today face expensive ownership costs and prospective sellers contend with lower price expectations as well as unfavorable mortgage rates if buying again.

NEI constantly monitors market and economic conditions to proactively discuss various options with our clients that may assist them in adapting to meet volatile market challenges so recruitment and retention goals can be met.

For more information on the above programs or other needs, please reach out to your NEI representative. 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.

Sources: 1) Mynd Consumer Insights Report; 2) Pew Research Center; 3) Fannie Mae; 4) Mortgage Bankers Association; 5) CNBC.

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Five Tips Before Taking Your Furry Friends on International Moves

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Five Tips Before Taking Your Furry Friends on International Moves

From Paws to Passports:

At NEI, we believe pets are family too! Here are five tips to consider before relocating internationally with one’s pets:

A Pet Owner's Guide to International Relocation

#1 Meet with your veterinarian

Ask your vet to check on destination requirements for your pet’s vaccinations and quarantine rules. Ask your vet for advice on long flights with pets, microchipping your pet, and obtaining a supply of prescribed medications. It is not recommended for old, anxious, or sick pets to ride in an aircraft’s cargo hold.

#2 Understand travel rules before purchasing tickets

Travelers should call the airline(s) before booking a ticket to confirm carrier/crate limits, weight limits and space for their pet as they may limit the number allowed on a specific flight or not permit any pets on board. It is important to find flights with the fewest stops as layovers can be stressful for a pet.

#3 Prepare and organize all pet documents

Different airline rules and destination country Customs and Imports laws may require pet documentation for vaccinations and a vet’s letter clearing them for travel. Take a copy of your pet’s complete medical records while traveling.

#4 Consider using a professional pet transportation provider

At each client’s preference, NEI can direct employees to pet transportation experts. Fees vary by provider and situation. Most offer comprehensive services to manage the entire process!

#5 Always ask questions

Information received from airlines, veterinarians and pet transport firms can be overwhelming, so ask for clarifications well ahead of travel. NEI has helped many travelers proactively solve their pet challenges.

Examples of When to Make Other Arrangements

Advanced planning is the key to moving with pets internationally. When moving with an exotic or uncommon pet — snakes, birds, fish, turtles, insects, etc. — ensure you check for specific requirements about these creatures. Every country differs on what types of animals may enter. Missing a detail around their transport and laws would be an unwelcome surprise.

Consider these two examples when NEI Account Executives provided advanced pet problem solving for employees contemplating assignments with their pets:

Example 1 – Gerbils: from Canada to the UK

NEI managed the move for an employee going on assignment from Canada to the UK who was concerned about his two gerbils he wanted to take. NEI checked with a vetted pet transport service partner, inquiring about the latest quarantine period in London for gerbils.

When the employee was informed of the regulations, he decided to trust the gerbils' care to a family member while on assignment.

Example 2 Five Chihuahuas from Japan to the US

A Mexican national and his spouse accepted an international assignment from Tokyo to San Jose, CA.  During a pre-move needs assessment, the NEI Account Executive learned the couple planned to bring their five dogs from Tokyo believing that, due to their small size, it should not be a problem.

Their NEI Account Executive advised them proactively that relocating five dogs could be a potential issue:  not only are more U.S. municipalities enacting regulations on the number and type of animals a person can keep on a property, but California had even stricter laws that varied county-to-county.  

Research conducted by NEI found the California counties the relocating couple was interested in only allowed two dogs at any given time and more than two dogs required a kennel license.

After NEI and the DSP discussed options with the couple, they decided to take two dogs with them from Tokyo and relocate the remaining three to Mexico to live with the assignee’s parents until the couple’s eventual home country repatriation.

Had NEI not counseled the couple at the beginning, the result could have been much different and they greatly appreciated NEI’s guidance.

For more weekly information about hot topics and mobility trends, follow NEI Global Relocation on LinkedIn!

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Repatriation, Retention, and ROI

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Repatriation, Retention, and ROI

Eager Competitors

Experienced employees repatriating from company-sponsored international assignments are highly pursued today by recruiters. The risk of losing these valuable assets – and negatively impacting the company’s Return on Investment (ROI) – is simply too great not to prioritize proactive, meaningful actions.

To protect the company’s investment in international assignees from eager competitors, organizations are encouraged to assess their program objectives and foster a successful employee retention culture with greater post-assignment recognition and career opportunities.

Achieving Meaningful Results

NEI suggests organizations ask the following questions to achieve meaningful results:

  1. How are assignment success goals defined and measured, and who reviews the results to gain meaningful insights into the company’s Return on Investment (ROI)?
  2. How do our employees perceive the value of international assignments? What do they feel are the positive and negative aspects of the experience?
  3. How do companies demonstrate the value it places in employees who accept assignments and are those rewards visible to others to reinforce the benefits of going on assignment?

Before a candidate accepts an international assignment, companies are encouraged to discuss the potential long-term benefits such an experience could have on their future with the company. While not all companies guarantee a position after an assignment’s completion, conveying how it has helped others in their careers can be an excellent recruitment tool.  

Unexpected ROI Challenges

Repatriation for relocating families can have unexpected psychological challenges. Helping to establish repatriation expectations and highlight the potential reverse culture shocks upon returning are best discussed during the recruitment process, allowing the candidate to go into the experience with eyes wide open.

“Reverse culture shock is experienced when returning to a place that one expects to be home, but actually is not home any longer. It is far more subtle, and therefore, more difficult to manage than outbound shock precisely because it is unexpected and unanticipated,” says Dean Foster, founder and president of DFA Intercultural Global Solutions.

NEI can help clients support assignment repatriation retention strategies and company ROI. We recommend that companies:

  • Initiate employee career discussions at both the onset of the assignment and within 6 to 12 months of the end of the assignment.
  • Arrange for repatriation training three to six months prior to employees / families returning from assignment to ensure a smoother re-entry to the home country and a position in the company that could use their new skills.
  • Survey repatriated employees for top-of-mind feedback on repatriation benefits, support and challenges, and track the career progress of these employees. It is common for employees to leave the organization within two years of being repatriated and these actions will provide a better understanding of why they left so strategies to retain those employees can be developed.

As your global mobility partner, NEI can support and address repatriation issues, along with assistance in achieving your assignee retention and strategic goals. We often provide clients with recommendations and support assignment analysis by:

  • Conducting focus groups and / or surveys of employees who have recently returned from assignments.
  • Interviewing company leaders and human resources to identify potential underlying issues and help future assignment candidate preparedness.
  • Reviewing exit interviews of repatriated employees who left the company within two years to analyze causes that may be undiscovered by global mobility or business units within the company.
  • Comparing tenure and turnover of repatriating employees to their peers who have not gone on assignment to determine if causes might be more related to business factors – like company business conditions, compensation increases, promotions, or skills development opportunities rather than a repatriated employee’s lack of ability to apply new skills gained from an assignment.
  • Comparing retention and turnover rates of employees to and from specific global office locations.
  • Understanding how many employees took advantage of recommended repatriation assimilation training and career discussions at both the onset of the assignment and within six to 12 months of the end of the assignment.
  • Determining the impact on a spouse / partner who did not work while on assignment, but upon repatriation was unable to return to the workforce with suitable employment – especially if a dual-income household is needed upon return. Did the spouse / partner take advantage of company-sponsored career programs prior to repatriation?
  • Analyzing the impact that a mentor may have had on the assignee, if he or she had one at any point during the assignment.
  • Considering the pros and cons of offering a retention bonus for repatriated employees who remain with the company longer than two years upon returning and are also willing to act as mentors for company employees currently on assignment.

Leveraging Technology for ROI Analysis

NEI can review the client’s established priorities and targets relative to specific retention challenges, assignment locations, culture, and costs. We can help client stakeholders analyze the effectiveness and costs for offered and used repatriation benefits, which can be useful in making decisions or adjustments on future benefits. Our flexible technology and reporting tools also allow clients to see the program status and expenses in progress as they accrue, as well as total cost reports and more.

If a company’s international assignment ROI is based upon how repatriated employees re-integrate and benefit the organization through new skills and expertise gained on assignment. Such investigations are best done through one’s internal Organization or Talent Development teams working together with each repatriate’s receiving manager over a period of time.

Based on information received, we can help recommend solutions to meet global needs, integrate these changes into your program and assist with your ROI measurements and goals. As one employee indicated:

"Now that I'm back, I just wanted you to know how much I appreciate everything that you have done for me and my family. You helped out more than you'll ever know.  Thank you very much." ~ NEI Client Assignee

If you have questions or would like further information, please reach out to your NEI representative.

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Ban on the Purchase of Canadian Residential Property by Non-Canadians Act

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Ban on the Purchase of Canadian Residential Property by Non-Canadians Act

The government of Canada passed the Ban on the Purchase of Canadian Residential Property by Non-Canadians Act that went into force on 1 January 2023 and is stated to be in effect for two years. The Canadian Employee Relocation Council (CERC) submitted a proposal to CMHC outlining their concerns and requested exceptions related to the relocation industry, but all exception requests were denied.

Notable Impacts on Global Mobility Programs

  1. Relocation Management Companies (RMC) incorporated outside of Canada will not be able to offer any RMC home sale programs such as Guaranteed Buy Outs or Buyer Value Options in Canada:
  • NEI will work with our clients to update their home sale program offerings in Canada.
  1. A modification of home sale programs to a Direct Reimbursement program will allow clients to continue offering some type of home sale assistance:
  • This type of program is non-taxable in Canada. However, if the move is cross-border, there may be tax consequences for the reimbursement.
  1. Employees currently working in Canada can only purchase a home if they:
  • Have a valid work permit.
  • Worked in Canada for three straight years out of the last four, and
  • Filed a Canadian tax return three out of the four years.

Should anything change, NEI will continue to provide our clients with updates and further policy recommendations.

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Home Insurance Costs "Going Through the Roof"

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Home Insurance Costs "Going Through the Roof"

Inflation Decreasing, but Insurance Increasing

On the heels of high inflation costs, homeowners across the U.S. are feeling new financial pain when receiving their annual home insurance renewal bills.  

This in part due to rising costs of materials to repair or replace homes – the values of which have risen 37 percent nationwide over the last three years – and in part due to extreme weather – hurricanes, tornados, ice or hailstorms, and wildfires.

Analysts expect further insurance rate hikes this year and homeowners are feeling the impact. As reported in the New York Times, American homeowners have seen their bills for property coverage grow by 21 percent on average since 2015 with some individual state averages, like Florida, reaching as high as 57 percent with another 40 percent increase anticipated next year!

Home Insurance Rate Factors

Rates can vary significantly based on where a home is, how much coverage one needs, and personal factors of an individual, like one’s credit and claims history.

According to Bankrate.com rates for $250,000 in homeowner coverage, by state, averages from $3,659 per year in Oklahoma to $382 per year in Hawaii. Although the national average is near $1,500 per year, it is a bit deceiving due to the wide swings in premium costs.

  • The top five states with the highest average rates include Oklahoma, Kansas, Nebraska, Colorado, and Arkansas.
  • The bottom five states with the lowest average rates include Hawaii, Vermont, Delaware, Utah, and Oregon.

High risk has made insurance companies pull back in event-prone areas. Insurance companies State Farm and Allstate recently stopped accepting new homeowner insurance applications in California citing risks from catastrophes. In Florida, ten insurers became insolvent in the last two years due to losses and more than a dozen others either left the state or placed moratoriums on writing new business.

For those employees considering a relocation, homeowner insurance in some states could be a shock and should be considered when developing a relocation package.

What to Do?

Homeowner insurance is not required by state or federal law, but mortgage lenders will almost always require insurance to protect their financial interest and despite two out of every three homes in America reported to be under insured already, a sharp rise in costs may tempt more homeowners to cut coverage back further despite the risks.

Consumer Reports says now is the time to shop around and a good time for an insurance checkup, ask about any discounts for switching, be financially prepared for storms and have the right types/levels of coverage.

Mark Friedlander of The Insurance Information Institute suggests in a report by WUSF News that homeowners might consider bundling home and auto insurance, increasing deductibles for a lower rate and asking about available discounts. He noted that a higher deductible can lead to lower premiums, but one will be responsible to pay more out of pocket for a loss, so weigh the pros and cons.

Market Monitoring for Clients

NEI continues to be diligent about client costs for every single move, monitoring market and economic conditions to ensure the selected insurance provider offers competitive rates for clients who have inventory properties.

For more information, please contact your NEI representative.

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

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Relocating with Special Needs Children

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Relocating with Special Needs Children

Attention to Detail

Moving can be stressful for families in the best of situations, but one of the major considerations for accepting a relocation involves the impact to one’s children. For companies relocating families with a “special needs” child, the situation can be particularly challenging.

More Preparation

There are 7.2 million students aged 3-to-21 studying under the Individuals with Disabilities Education Act (IDEA) in the U.S. today, making up about 15 percent of all U.S. public-school students.

Though awareness of child learning, health disabilities and other special education needs have increased dramatically, relocating loved ones with such needs usually requires more preparation and attention to detail to ensure the right support is provided before, during and after a transition.

Additionally, because health information about an employee / family is private, companies may never even know if relocation candidates turn down offers because they were either unsure if their child’s unique requirements could truly be met in the destination or if they would have access to necessary special needs support services similar to their current network of providers.

Active Listening Makes a Difference

NEI has considerable experience assisting families with special needs children, be it learning disabilities or health concerns, and we navigate each situation to develop the best solutions. In fact, our experience led us to develop the You Allowance as a way for companies to provide additional support for unique situations just like this.

Our Account Executives are trained to conduct a detailed Family Needs Assessment to learn each relocating family’s priorities, needs and interests. They also learn how to recognize unspoken needs or concerns that could lead to employee/family reluctance to relocate.

NEI and client-approved service partners can provide guidance to families and work with resources in the destination to create a pre-move strategy and timetables to maximize the family’s time and address their home finding trip concerns. The following information provides two case studies involving the need for special assistance.

Short Term Rental with a Pool for Therapy

NEI worked with a family with two children moving from Missouri to New Jersey, one of whom had special needs. The family’s original intent was to purchase a home, but due to other circumstances they had to secure temporary living for six months with one requirement: a pool for the child’s therapy, as well as a separate living space for him.

Identifying a real estate agent who specializes in short-term rentals was NEI’s first step. The agent quickly located a private residence that included both a pool and the exact accommodations requested so the child’s routine wouldn’t miss a beat.

The Perfect Destination School

With the client’s approval, NEI partnered with a fee-based service partner to help a transferee find the perfect school for his child with autism when he was needed for an Atlanta to Los Angeles relocation. The service partner set up family appointments to visit each school based on the family’s unique needs, helped with the interview process, consolidated all documentation from the child’s previous program in Atlanta and even helped with school admissions paperwork.

Planning, Research, Preparation

For families deciding to relocate with a special needs child, it is important to start researching and planning early. Gathering all documents necessary to obtain the services and support needed in the new location is critical. Letters from teachers, therapists and other professionals who currently work with the child should be requested as quickly as possible to save time and stress.  

Simultaneously, NEI provides links to school information in the destination city on our personalized NEI Cities website and, if client-approved, will recommend a contact for professional school search support. This is considered a best practice with NEI coordinating and managing expert service partners to advise employees on available schools, curriculums, and answer all questions. Here is a great example of how this type of support can help:

Supporting a Child Not Happy about the Relocation

NEI’s service partner worked with a family who was going on a house hunting trip to South Carolina. The family’s 10-year-old autistic son was resisting them – at every step – and was very unhappy. However, he had a new passion: martial arts. Our service partner located several martial arts studios and recommended the family trip include exposure to the different facilities and instructors. Their son tried three studios and, from that point on, he was “sold” on their relocation, even volunteering to help with decisions regarding the move.

If professional assistance is not offered by an employer, transferees are encouraged to contact destination area schools well in advance to discuss their child's needs and share copies of any individualized education plans. It is vital to speak to school counselors in the new location to understand the options a school offers.

Breaking the News

Acquainting a special needs child with the idea of relocating is important. Experts encourage families to:

  • Announce the move with plenty of advance warning: weeks for a younger child; a month or more for teenagers
  • Make a visual schedule of the move process
  • Involve the child in planning and packing
  • Show where the family is headed by viewing online photos and videos of their destination’s neighborhood, school, playgrounds, parks, library, and points of personal interest to the family.

The smallest details about transportation of household goods and temporary living for the families of special needs children cannot be overlooked. NEI worked with one family having very specific needs:

Exceptions for Household Goods and Temporary Living

During the NEI assessment call, an employee indicated he had a child with special needs and one of his biggest worries about relocating concerned the transfer of his medical equipment and temporary living accommodations. Our Account Executive:

  • Secured a client exception to move items that were a necessity for the child, including a hoist chair, hospital bed and automated wheelchair
  • Worked with the client and temporary housing partner to accommodate the family in an Airbnb home environment, rather than a corporate apartment
  • Arranged for installing a temporary wheelchair ramp at the home

Patient, Proactive and Compassionate

Relocation success is so much more than just selling a home and moving household goods – it affects the entire family and requires everyone’s buy-in for the move to be a success.

Understanding how important it is to be patient, proactive and compassionate for all relocations, but especially for those which can be more complicated, has been engrained in our culture at NEI since our founding.

If you would like to discuss proactive policy changes, such as our You Allowance, or options to help families with special needs children, please reach out to your NEI representative.