Need for Talent, Company Growth and Expansion Key Drivers, Real Estate Market Pressure Lessens

Overall, firms reported company growth and the lack of local talent as nearly equal drivers of relocation last year. Company growth remains similar to previous recessionary levels, despite maintaining a substantial increase over 2009 (43% vs. 24%). However, when all types of expansion are considered (facility, new territories, or international), nearly half of firms (45%) indicate some form of expansion impacted their relocation volumes, making it the top factor overall. This is significantly higher than reported in each of the previous twelve years, with two exceptions.

Lack of local talent is the top external factor noted, but it is similar in weight to economic conditions (43% vs. 38%). However, with a majority of firms reporting improved financial performances over the past five years, perhaps the weight assigned to economic conditions reflects a mix of positive factors and challenges. Over the past two years, around a third of firms have simply expected stability rather than improvement in the U.S. economy. Since company growth is less cited as a factor in relocation volumes compared to previous non-recessionary periods, this percentage may indicate some residual economic weakness.

Other external factors appear to be playing much larger roles in relocation compared to previous years. Significantly more firms cite the growth of competition (domestic or international), the political/regulatory environment (overall & specific health care legislation), and natural disasters. The percentages of firms affected by the following internal factors are near or at the highest levels reported in thirteen years: increased production, facility expansion, expansion into new territories, international expansion, use of short-term assignments, and use of extended business travel/telecommuting. It appears as external pressures mounted, firms flexed the creativity born out of the Great Recession to position themselves for growth through expansion, using creative assignment arrangements to accomplish goals within budgets.

• The impact of factors continues to vary by company size. At small firms, the need for talent was clearly the top issue (41%), followed closely by combined expansion efforts (35%). Both mid-size and large firms were similarly affected by the need for talent (44%), by economic conditions (46% and 40%), and by combined expansion efforts (47% and 53%). However, large firms were more acutely affected by corporate structure changes (46% - acquisitions/mergers or corporate reorganization/restructuring), and growth of competition (49% - domestic or international) weighed most heavily on mid-size firms.
• The impact of available talent remains markedly above the level recorded in 2009 (31%) and far above much lower levels recorded before 1996. Regardless of company size, talent shortfalls remain one of the key drivers of relocation volumes overall.
• For both small and large firms, the impact of real estate is at or near its lowest point since measurement began in 2007, dropping even more significantly from last year among large firms (21% vs. 31%). Only mid-size firms continue to report a slightly higher impact over the 2007 value (25% vs. 18%).
• Company growth and combined expansion efforts are the top internal factors impacting relocation, regardless of company size (small: 38% and 35%; mid-size: 46% and 47%; large: 45% and 53%). Among large firms, these are nearly equal in weight to corporate structure changes overall (46%). The use of short-term assignments/EBT/telecommuting played a bigger role in relocations at mid-size and large firms compared to small firms (21% and 27% vs. 15%).
• Over half of manufacturing/processing firms and financial firms indicated some method of expansion impacted their relocations last year. Roughly half of these firms and wholesale/retail organizations indicated company growth or the growth of competition (domestic or international) played a role also. Almost half of for-profit service, manufacturing/processing, and wholesale/retail firms say talent shortfalls significantly impacted relocations in 2014.
• Firms operating internationally were the most likely to report competition (domestic or international) impacted relocations last year (48%) compared to national (34%) and regional (27%) firms. Company growth was most strongly felt among national (50%) and international firms (44%) compared to regional (27%).

Question 13-1

External factors having the most impact on the number of employee relocations in 2014

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Question 13-2

External factors having the most impact on the number of employee relocations in 2014

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Question 14-1

Internal conditions having the most impact on the number of employee relocations in 2014

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Question 14-2

Internal conditions having the most impact on the number of employee relocations in 2014

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