Worldwide ERC
From Freepedia
Worldwide ERC is a relocation services industry trade group that has been known historically as the Employee Relocation Council.
Its membership of 12,000 (as of 2005) relocation professionals--or global workforce mobility specialists--are concerned with current issues and management practices for the movement of employees (by their employers) within the United States and between all other countries.
The organization is headquartered in Washington, DC, with a European bureau in Brussels, Belgium.
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Programs
Like any comprehensive industry trade group, Worldwide ERC addresses issues that include and are related to public policy/lobbying, research and trend identification, professional certification, networking, training and education, industry standardization and consensus-building, management processes and practices and e-business solutions.
The organization has four stated goals:
- to provide a community and effective networking for all those concerned with "raising the bar" on workforce mobility knowledge and practices;
- to effectively address public policy issues so that its members are both informed about issues that affect employee mobility and know how to comply with regulations and laws
- to provide exceptional education and accessible delivery of training to all those concerned about workforce mobility
- to expand its work around the world so that it may connect and communicate with a broad spectrum of global workforce professionals
Through training courses, a member of the organization can become accredited as a "Certified Relocation Professional," a "Senior Certified Relocation Professional," and a "Global Mobility Specialist," which entitles the member to include the professional designations CRP, SCRP and/or GMS after his or her name.
Worldwide ERC publishes a monthly magazine, Mobility as well as several Web-based newsletters and bulletins, including Globility
An employee relocation primer
Individual professions
A "relocation professional" may be employed in one of several related fields: Corporate human resources, household goods movers (HHG), [[Real estate broker|residential real estate agencies, appraisal firms, financial services, relocation management companies (third party), mobility counselors and consultants, international assignment (expatriate) professionals, and a range of concerned practitioners who are involved in workforce mobility.
Business relationships
The relocation professionals working in corporate human resources departments tend to be paying clients of relocation professionals working in all the other fields mentioned above. These relocation managers administer their employers' relocation beneift program for new-hires and transferring employees. The typical corporate relocation department will rely on outside services to carry out most of the benefits since they require non-core expertise and resources.
Relocation management companies
Many large employers will contract out the entire employee relocation program to a third-party relocation management company, which will, in turn, manage relationships with the movers, real estate agents, appraisers, and other service subcontractors.
Inside Supply Management outlined traditional corporate motives for using a third-party relocation provider.
Beyond the general benefits of outsourcing, such as time savings and ability to focus on core competencies, there are other advantages of using outsourced relocation services:
- Assistance when creating or revising the organization's relocation policies
- Enforcement of policies — when confronted with unreasonable requests, the outsourced provider can be the gatekeeper and ensure that policies are consistently applied and that the program is equitable for all employees
- Better service to employees — the provider serves as a point of contact for relocating employees to get assistance quickly
- Better property management — a relocation provider generally can move property faster and at a lower cost than the organization itself can.
- Nolan, Dan. "Spaces with Relocation Services," Inside Supply Management, The Institute for Supply Management (Aug. 2003; p. 26)
Relocation benefits
Typical relocation benefits offered to employees can go well beyond arranging for a moving van to appear at the transferee's curb. Relocation management companies will often buy an employee's home outright (for a carefully calculated fair-market price) so that the transferee (and family) may concentrate on the new job and new community. Depending on how much an employer values a particular transferee or new-hire, the relocation package may include special destination services like educational consulting (getting the kids into the "right schools") and special research on the new community that will better enable the transferee and family to assimilate.
Taxation
Due to increased regulatory scrutiny mandated by the Sarbanes-Oxley Act, the paperwork aspects of a employer-assisted relocation have become as important as the operational process of moving. Many relocation costs paid by an employer are considered taxable income under U.S. Tax Code and some state income tax laws. To offset this burden to transferring employees, the employer will usually reimburse them for the tax they will have to pay for the services. Of course, the reimbursements are also taxable, so the employer will "gross up" the reimbursement amount to cover that tax cost as well.
Some tranferring employees are covered by a "lump sum" relocation benefit policy, usually for less senior employees. The employer gives the employee a predetermined amount of money (usually taxable as personal income) to pay for a relocation, but takes no other supportive role.
Relocation trendspotting
U.S. Domestic
- U.S. Domestic Costs: The average costs to relocate a homeowning current employee and a homeowning new hire are $70,771 and $52,109 respectively. The average cost to relocate a renting current employee is $19,129. The corresponding cost for a new hire renter is $14,008.
- The size of the industry: Worldwide ERC integrated its own statistics with government estimates that put the size of all employer-assisted moves (including international and military) at approximately 1.5 million. The group's figure for domestic employer assisted job-related relocations is approximately 450,000 per year. They estimate international employer relocations at about 394,000. Most companies indicate that domestic relocation has remained somewhat static for several years - the real growth area is in the international arena.
- Tiered Policies: In the 1990s, more companies began using tiered policies for current employees and new hires to control costs and add flexibility to their programs. This is the practice of providing different levels of relocation support (logistical or financial) to different categories of employees.
- Reluctance to Relocate: The top two reasons that employees are reluctant to relocate in the United States are family resistance to the move and high housing costs.
- According to a 2002 American Moving and Storage Association traffic lane study, the three most active U.S. metropolitan areas for inbound and outbound moves are Washington, DC; Phoenix/Mesa, Arizona; and Chicago, Illinois.
International Workforce Mobility
- According to the Worldwide ERC, countries' economies are more connected and intertwined, increasing the need for a global business plan for all businesses and businesspeople. Countries are so interlaced economically that a substantive plan to address global workforce mobility and global business opportunities, whether currently in use or in the planning stages, is a natural next step for all of us.
- Companies still make use of international assignments for training and development, getting their "ticket punched" (rounding out their education in the company), for cultural transfers, or to groom their executive leadership.
- Rapid expansion of global enterprise, technology that enables geographically disbursed teams, the need to enhance international business relationships, the implementation of permanent or expatriate assignments, and an increasingly multi-cultural workforce are all trends that are driving global mobility.
- The increasingly multi-cultural workforce calls for the development of managers who can be effective in multiple, complex, and rapidly changing environments. In short, we are building global leaders. A recent ERC survey indicated the value placed on international experience. Of those who responded to the survey, a reported 24 percent indicated that senior managers have completed international assignments, and 50 percent expect a 50 percent increase over the next five years.
- A lessening of US domestic transfers reveals international mobility as the real growth area, though industry watchers have seen the number of expats moving out of the U.S. decline even as expats coming into the U.S. (as well as country-to-country movement) remain steady or increase.
- The face of the global workforce is changing to include more short-term and multi-country project teams, while there are continued challenges with repatriation, and problems with retention.
- Cost estimates are rising, and visas and shipments are taking longer. Learning to project costs more accurately and look for ways to minimize them is critical, as is supporting the employee and family and staying in compliance with tax and immigration laws.
- There are fewer fully-loaded expat packages, in fact, the need to contain or reduce costs is driving some policy changes and reductions in benefits.
- From the cost standpoint, there is no magic formula that works for global transfers. Some companies say they are 3 or 5 or 7 times someone's salary to move an employee, but there are many variables, many different tax situations, and many different types of services from country to country.
Other Worldwide ERC research
As the organization conducted research for its 2003-2005 Strategic Plan, it formulated a list of "10 Pivotal Points" that it feels ERC members should be made aware.
Sources: Worldwide ERC and Primacy Relocation
Categories: Industry trade groups | Employee relocation | Transportation | Global Assignment Management
