Relocation Volumes & Budgets

RELOCATION VOLUME & BUDGETS

In general, 2018 was another positive year for the relocation industry; roughly nine out of ten organizations indicate both volumes and budgets either held steady or increased. Nearly six out of ten mid-size firms reported budget increases compared to just four out of ten among smaller and larger firms. Projections for 2019 are similarly optimistic. More than four out of ten organizations expect increases in volumes and budgets for 2019. Expectations are essentially in line with last year’s experiences across company size; firms of all sizes expect growth or stability for volumes and budgets, and few expect decreases. In light of tax reform and increasing costs, it appears firms are working to ensure their budgets cover the relocations projected in the coming year.

Among firms relocating employees internationally, 48% overall saw increases in international volumes last year and 47% expect to see increases in 2019. Around one seventh saw decreased volumes last year and expect decreased activity in 2019. While projected increases appear to outpace decreases roughly three-to-one, Brexit looms as a wild card. One fifth of firms moving employees internationally are unsure of Brexit’s impact on 2019 volumes.

TAX REFORM’S IMPACT

The passing of the U.S. Tax Cuts and Jobs Act eliminated the moving-expenses deduction for 2018-2025. We incorporated additional questions to assess the potential impact of this bill last year and we continue to investigate it.

NUMBER OF RELOCATIONS PERFORMED

When survey respondents in early 2018 considered the law’s potential impact, the picture was highly uncertain. However, the data shows a positive impact, with higher relocation volumes rather than lower volumes. This was most strongly expected and reported among mid-size firms, followed by small. Gains and losses essentially zeroed out for large firms, making the overall impact negligible for them.
Looking toward 2019-2025, projections across company size shift in favor of increases. Around a third of firms project greater volumes, compared to roughly one out of seven projecting a decrease.

COMPLEXITY OF RELOCATION ADMINISTRATION

Around four out of ten firms expected increases in the complexity of administration in 2018. Data showed their projections were spot on.

RELOCATION COSTS

Around half of organizations expected the law to cause an increase in relocation costs in 2018, and their expectations were realized. Projections among mid-size and large firms were spot on; small firms report more increases than projected (42% vs. 31%).
Essentially half or more of firms across company size expect increased costs in 2019-2025. Very few expect tax reform will save them money; they see it is costing them more and expect it will continue to do so.

RELOCATION POLICY CHANGES

Roughly four out of ten firms expected relocation policy changes in response to tax reform in 2018. Expectations essentially became reality.
More mid-size and large firms felt this would be the case than small firms, and their expectations proved true. More than a third (37%) of large firms and almost half (47%) of mid-size firms made changes last year because of tax reform. Just 28% of small firms did so.
While a third (34%) of firms overall expect additional policy adjustments during 2019-2025, such anticipation is greatest among mid-size firms (45%).

DIFFICULTY RECRUITING EMPLOYEES TO RELOCATE

Overall, around half of organizations expected the law to have no effect on the difficulty to recruit employees in 2018; around half reported the same as well as similar expectations for 2019-2025.
However, the impact was dissimilar across company size: 36% of mid-size firms experienced greater recruiting difficulty, followed by 30% of small firms. Large firms felt the impact least (21%).
Expectations for 2019-2025 are similar: mid-size firms project the most difficulty (42%), followed by small (34%), with large firms the least likely (27%) to expect greater difficulty in recruiting employees.

Question 1