MOBILITY - June 2010

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2 MOBILITY/JUNE 2010

MOBILITY (ISSN 0195-8194) is published monthly by Worldwide ERC®, 4401 WilsonBoulevard, Suite 510, Arlington, VA 22203, +1 703 842 3400. MOBILITY examines keyissues affecting the global mobility workforce for the benefit of employers and firms or individuals providing specific services to relocated employees and their families. The opinions expressed in MOBILITY are those of the authors and do not necessarily reflect the opinions of Worldwide ERC®. MOBILITY is printed in the United States of America.Periodical postage paid at Arlington, VA, and additional mailing offices. Worldwide ERC®

members receive one annual subscription with their membership dues. Subscriptions are available to both members and non-members at $48 each per year. Copyright © byWorldwide ERC®. All rights reserved. Neither all nor part of the contents published hereinmay be reproduced in any form without written permission of Worldwide ERC®.

POSTMASTER: send address changes to MOBILITY, Worldwide ERC ®, 4401 WilsonBoulevard, Suite 510, Arlington, VA 22203

EXECUTIVE COMMITTEE

President

MICHAEL (MIKE) C. WASHBOURN, SCRP, GMS, Pfizer Inc., Peapack, NJ

Vice President

SUSAN SCHNEIDER, SCRP, GMS, Plus Relocation Services, Inc., Minneapolis, MN

Secretary/Treasurer

PAMELA (PAM) J. O’CONNOR, SCRP, Leading Real Estate Companies of the World®, Chicago, IL

Chairman, Board of Directors

AL BLUMENBERG, SCRP, NEI Global Relocation, Omaha, NE

BOARD OF DIRECTORS

CORI L. BEAUDET, SCRP, GMS, SC Johnson—A Family Company, Racine, WI

LISA CARAVELLA, CRP, Bank of America, Plano, TX

JAY K. DELICH, SCRP, SRA, IFA, Arizona Appraisal Team, LLC, Scottsdale, AZ

MARIO FERRARO, International SOS Pte Ltd., SINGAPORE

MARK GIORGINI, GMS, China Vanke Co. Ltd., Shenzhen, CHINA

WILLIAM (BILL) GRAEBEL, GMS, Graebel Relocation Services Worldwide, Aurora, CO

JOHNNY H. HAINES, SCRP, GMS, Deloitte, Hermitage, TN

LARS LYKKE IVERSEN, Santa Fe Relocation Services, Hong Kong, CHINA

CHRISTOPHER (CHRIS) JAMES, Bechtel Corporation, Phoenix, AZ

JO LAY, SCRP, GMS, Coldwell Banker Central Region Relocation, Chicago, IL

EARL LEE, Prudential Real Estate and Relocation Services, Scottsdale, AZ

STEPHEN C. MCGARRY, SCRP, WPP, New York, NY

SANTRUPT MISRA, PH.D., Aditya Birla Management Corporation Ltd., Mumbai, INDIA

JOY MORRISON, SCRP, GMS, PepsiCo, Inc., Purchase, NY

STEVEN A. NORD, UPS, Atlanta, GA

JOHN PFEIFFER, GMS, Mustang Engineering, L.P., Houston, TX

PANDRA RICHIE, SCRP, GMS, Long & Foster Corporate Real Estate Services Division, Chantilly, VA

C. MATTHEW (MATT) SPINOLO, SCRP, GMS, CARTUS, Memphis, TN

EX-OFFICIO

Chairman, U.S. Advisory Council

AL BLUMENBERG, SCRP, NEI Global Relocation, Omaha, NE

Chairman, Foundation for Workforce Mobility

KEVIN E. RUSSELL, SCRP, PHH Mortgage, Mt. Laurel, NJ

Chairman, Global Advisory Council

SANTRUPT MISRA, PH.D., Aditya Birla Management Corporation Ltd., Mumbai, INDIA

Chairman, Government Relations Council

C. MATTHEW (MATT) SPINOLO, SCRP, GMS, CARTUS, Memphis, TN

Calendar MOBILITY • Vol. 31 No. 6 • June 2010

JUNE 2010GMS™ Training and CertificationJune 7-9 Frankfurt, Germany

Global Workforce Summit®: Focus on Europe, Middle East & AfricaJune 10-11 Frankfurt, Germany

OCTOBER 2010GMS™ Training and CertificationOctober 26-27 Seattle, WA

Global Workforce SymposiumOctober 27-29 Seattle, WA

MAY 2011National Relocation ConferenceMay 18-20Las Vegas, NV

OCTOBER 2011Global Workforce SymposiumOctober 12-14 Denver, CO

MAY 2012National Relocation ConferenceMay 9-11San Antonio, TX

OCTOBER 2012Global Workforce SymposiumOctober 3-5 Washington, DC

MAY 2013National Relocation ConferenceMay 15-17San Diego, CA

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A few years ago, the WorldwideERC® Foundation partnered onresearch with the ThunderbirdSchool of Global Management titled,“Global Mindset Defined: ExpatSuccess Strategy.” The final reportnoted that successful assigneesunderstand cultural similarities, dif-ferences, history, and global business;know how to build and manageglobal alliances, partnerships, andvalue networks; and can effectivelymanage corporate requirements andlocal challenges. The expectations arethe same for today’s global assignees,but with a slight modification: afterthe economic reset, assignees may bemore at risk. In the last year or two,some assignees were pulled backearly and had no place to go. Somore than ever, when employees goon global assignment, they are takingtheir careers into their own hands.But there’s good news, too: becausemaintaining a powerful global reachis essential today, mobility strategiestend to follow the “Towering Infer -no” rule—if reductions are necessary,cut floors, not corners; e.g., movefewer assignees rather than lesseningthe experience of current assignees,allowing for belt-tightening on theeconomic front while maintaining acompetitive edge.

The need to cinch costs even morestringently in the current environ-ment brought us another interestingwrinkle: what is the best strategy tobuild a powerful, talented workforcewhen resources are constrained? Oneof the things I see happening, andwhat I believe will be more of atrend, is that companies are focusing

on how to be the numberone employer of thetop talent in a spe-cific field, withintheir overallorganization.So, for exam-ple, if youare a medicalprofessionalcompany,you may wantto build yourbrand to be theforemost employerof the best cardiolo-gists, versus anesthesiolo-gists or other specialists. Thiskind of strategy allows a company toput a stake in the ground for that tal-ent, and to hold onto that position.In effect, companies who do this aresaying, “we are willing to invest inour specialty (e.g., cardiologists), andare moving away from an overallrecruiting approach. We know thatmay mean less mobility activity, butwe are committing to be to be acute-ly deliberate in our talent manage-ment strategy.”

Being “acutely deliberate”—wheth er from a talent managementstrategy perspective or a cost andproduct line perspective—is a themethat runs throughout the industryafter our experiences in the last fewyears. We know that after the hous-ing market crash in the UnitedStates, the numbers were reset andwon’t ever go back. But some greatstuff came out of the last two years!Any body will tell you that they andtheir companies are more efficient,

more focused on key impor-tant deliverables and on

total global business.We’ve also re -

turned to somefine old businessfundamentals,and are taking agood hard lookat who we wantto be to ourcustomers, and

what we can bestprovide. Along with this

increased scrutiny ofour business and cus-

tomers, we need to look moredeeply at ROI, in America andaround the world… it’s very top-level, and incorporates far more thanjust workforce mobility. And weneed to be thinking beyond the tra-ditional relocation experience, to theentire compensation and benefitsarena. If we want to reinvent our-selves, it’s imperative to think aboutthe whole landscape—health care,retirement, equity—so we can bebroader and conversant on anythingan employee requires to be mobile.

All of us, in any industry, must beready for some of these remarkableand unexpected shifts. And whateverthe future holds, we need to take alook at how the experience will bedifferent for all of our touch points,and adjust our work and skills to meetit (And I’ll be sure to keep taking ourindustry’s pulse along the way!).

—Peggy SmithChief Executive Officer

Worldwide ERC®

Perceptions

Taking the Pulse of Our Industry

If I was a nurse and our industry was my patient, I would take its pulse and pronounce it “relatively stable:” a few

steps away from the recession but not yet consistently back on solid ground. It’s a good time to determine a prog-

nosis for our future, and consider a few thought-provoking features of today’s workforce mobility environment.

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Magazine of Worldwide ERC®

MOBILITY

MOBILITY/JUNE 2010 7

Features

20 The European Union: Everything You EverWanted to Know but Were Afraid to AskBy Anne Dean, GMS

27 The Global Economy: Closer Than You ThinkBy Tom Wortham, CRP, GMS

30 The Basics of Split Payrolls for Expatriates: Splits and ShadowsBy Amy Parrent, GMS, CBP, CCP

36 The Expatriate Experience in South AfricaBy Michelle Colona and Danielle Turner

47 The New Worldwide ERC®

Summary Appraisal ReportBy Jan Hatfield-Goldman

58 Analyzing the Perfect Storm: the Present State of the Moving and Storage IndustryBy Eric Reed, CRP, GMS

66 AfghanistanBy Ellen Harris, GMS, and Greg Forgrave

72 Israel—Where Cultures CollideBy Michele Bar-Pereg

78 Locating Suitable Housing in AmsterdamBy Ilona Eichler

82 Moving Abroard? Don’t Forget to Pack Your BrainBy Maureen Rabotin, GMS

78

66

82

36

88 Responding to Change in the BusinessWorld Through Industry-specific QualityStandardsBy Boris A. Populoh

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Magazine of Worldwide ERC®

MOBILITY

D E P A R T M E N T S

2 CALENDAR

4 PERCEPTIONSTaking The Pulse of Our IndustryBy Peggy Smith

10 AROUND THE WORLDWIDE ERC®

12 EXECUTIVE SPOTLIGHT

15 INDUSTRY SPOTLIGHT

15 WORLDWIDE ERC® TRENDSPOTTING

18 QUICK TAKES

92 RAC REPORT

95 GLOBILITY®

96 LAST PAGE

MOBILITYS T A F FVice President & PublisherJerry Holloman

Managing EditorFrank Mauck

E D I T O R I A L A D V I S O R Y C O M M I T T E E

ChairmanJo Lay, SCRP, GMS, Coldwell Banker Central Region Relocation, Northbrook, IL

Alex Alpert,Wheaton World Wide Moving, Tucson, AZ

Tamara Bianchi, CRP, Capital Relocation Services, Denver, CO

Robert F. Burch, SCRP, Alexander’s Mobility Services, Baltimore, MD

Christopher R. Chalk, CRP, GMS, Graebel Relocation Services Worldwide, Alpharetta, GA

Alex Chua, Newport Real Estate Limited, Shanghai, CHINA

Brenda Darrow-Fuhs, Bank of America, Longmont, CO

Terry Baxter Davis, SCRP, GMS, Ernst & Young LLP, Cleveland, OH

Tim Denney, Stirling Henry Global Migration, Sydney, AUSTRALIA

Marge A. Dillon, CRP, GMS, Xerox Corporation, Lewisville, TX

Sean Dubberke, RW3 LLC, New York, NY

Deborah A. Dull, CRP, GMS, Crown Relocations, Houston, TX

Kari Hamilton, ABODA, Inc., Redmond, WA

Nancy F. Harmann, CRP, GMS, Latter & Blum, Inc., Realtors, New Orleans, LA

Gustavo Higuera, GMS, Prudential Real Estate and Relocation Services, Washington, DC

Christine E. Holland, GMS, Massachusetts Institute of Technology, Cambridge, MA

Ronald Huiskamp, GMS, Dwellworks, LLC, Kirkland, WA

Rob Johnson, SCRP, GMS, Altair Global Relocation, Plano, TX

Tacha Kasper, CRP, Leading Real Estate Companies of the World®, Chicago, IL

Tim McCarney, GMS, Weichert Relocation Resources Inc., Norwell, MA

Elizabeth Perelstein, School Choice International, White Plains, NY

Patricia Pollard, CRP, GMS, Coldwell Banker United Realtors, Houston, TX

Michelle Sandlin, CRP, John Daugherty Realtors, Inc., Houston, TX

Stefanie R. Schreck, CRP, GMS, American International Group, New York, NY

Scott T. Sullivan, Brookfield Global Relocation Services, Woodridge, IL

Mara Terrace, Siemens Corporation, Global Shared Services NA, Orlando, FL

Sherrie Tessier, CVS, Woonsocket, RI

Allie Williamson, CRP, OneWorld Relocation Services, Naples, FL

G L O B A L E D I T O R I A L A D V I S O R Y C O M M I T T E E

ChairmanJoy Morrison, CRP, GMS, PepsiCo, Inc., Purchase, NY

Michele Bar-Pereg, Bar-Pereg Group, Amsterdam, THE NETHERLANDS

Lorraine Bello, GMS, Ricklin-Echikson Associates, Inc. (REA), Millburn, NJ

Lorelei Carobolante, SCRP, GMS, GPHR, G2nd Systems, LLC, San Ramon, CA

Scott Craighead, SCRP, GMS, Blue Sky Executive Search, New York, NY

Anne Dean, GMS, Living Abroad, LLC, Norwalk, CT

Cindy Madden, CRP, Cartus, Danbury, CT

Derrick Kon, Mercer (Singapore), Pte. Ltd, SINGAPORE

Anne-Claude Lambelet, GMS, The International Relocation Associates (TIRA), Geneva, SWITZERLAND

Tacita Lewars, GMS, Globaforce Incorporated, Calgery, Alberta, CANADA

Andrea Massoud, GMS, Living in Brazil, International Relocation Services, Barueri-Sao Paulo,BRAZIL

Jeff Napton, SIRVA Relocation, Westmont, IL

Nino Nelissen, GMS, Executive Mobility Group, Schlipol Airport, THE NETHERLANDS

Constance Pegushin, Berry Appleman & Leiden LLP, San Francisco, CA

Maureen Bridget Rabotin, GMS, Effective Global Leadership, Paris, FRANCE

René Rosemary Stegmann, GMS, Relocation Africa, Cape Town, SOUTH AFRICA

Rita Wagner, GMS, Interdean International Relocation, London, UNITED KINGDOM

Nick Woodhams, GMS,Woodhams Relocation Centre, Sydney, AUSTRALIA

Design/Production: Ideas, Communicated, LLC, Vienna, VA,www.ideascommunicated.com

Printing: CADMUS Specialty Publications, Richmond, VAReprints: Katina Moaney, CADMUS Reprint Services,

[email protected]; +1 800 487 5625

Advertising Sales: Glen Cox, National Sales Manager, The Townsend Group,+1 301 215 6710; ext. 109;

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Around the Worldwide ERC®

In May, we held our Foundation Walkin conjunction with our NationalRelocation Conference in Orlando,

FL, to honor Janet Holloman, the latewife of Vice President and Publisherof MOBILITY Jerry Holloman, who passedaway March 25, 2010, after a courageousyear-long battle with ovarian cancer.

Janet was a petite, pretty, happywoman with a personality three timesbigger than her tiny frame, a great laugh,a beautiful and constant smile, the kindof heart that kept her looking out forothers even as she grew more ill, anincredible artist who worked with realismand whimsy in equal parts, and creativitythat knew no bounds. And she was alsoan advocate for better education aboutthe disease that claimed her.

Ovarian cancer is the fifth leadingcause of cancer-related death amongwomen. Currently, only one in fivewomen are diagnosed in the earlystages of the disease, when survival ismost likely. Almost 15,000 womendied last year from ovarian cancer—thenumbers are staggering. Because ovari-an cancer often goes undetected, is misdiagnosed, or isdiagnosed in later stages, Janet was committed to ensur-ing that her friends and family members were properlyeducated about screening and early detection. Wanting tocarry forth Janet’s focus on promoting education on thisdeadly disease, the Foundation took up the charge toraise funds for the National Ovarian Cancer Alliance andFoundation Outreach, a cause that became so importantto Janet in her final year.

Our early Friday Foundation Walk on May 21, was aremarkable event; an opportunity for our registrants toconnect with each other during a brisk “walk and talk”(or to stay happily in bed and “sleep-walk,” knowing thattheir contribution would represent them!). The entireHolloman family was in Orlando for the walk: Jerry,(who was staffing the NRC with other Worldwide ERC®

colleagues), daughter Jennie and son-in-law Keith Hash;son Jamie and daughter-in-law Jill and their three chil-dren—Bella, Alexa and Austin.

The Foundation thanks these companies for their gen-erous sponsorship of our t-shirts: Ebby HallidayRealtors®, Morreale Real Estate Services, North TexasRelocation Professionals, St. Louis Regional Employee

Relocation Council, and The PaxtonCompanies, which also sponsored thewalk wristbands. In addition, TheFoundation thanks these individual con-tributors and organizations that pledged$100 or more before May 1, to the Walkand were recognized on the event t-shirts:

Craig Anderson, SCRP, GMSSheila Barr, SCRPAl Blumenberg, SCRPJoan Brady, CRP, GMSAnita Brienza, GMSJack Clarke, SCRPKate Dodge, SCRPMario FerraroShelley Giles, SCRP

Greater Richmond RelocationCouncil

Johnny Haines, SCRP, GMSHarry Norman Realtors®

Laura Henneberry, SCRP, GMSJamie and Jill HollomanJennifer Holloman Hash and

Keith HashJerry HollomanLinda Howard, SCRP

Lars IversenChris JamesCarlotta Landschoot, CRP, GMSJanie Linders, SCRP, GMSMartha Marshall, SCRP, GMSPam O’Connor, SCRPJanelle Piatkowski, GMSGail Plummer, SCRPCathleen Podell, CRPBob Portale, CRP, GMS, and Joanie PortaleRE/MAX Allegiance Relocation ServicesKevin Rich, SCRPPandra Richie, SCRP, GMSKevin Russell, SCRPPiper Sheffield, CRPPeggy SmithMatt Spinolo, SCRP, GMSStewart Relocation ServicesTina Streiff Swenson, CRP, GMSChip Wagner, SCRPAnd thanks to the many other contributors who

donated through our online walk registration page and on-site!s.

Foundation Walk Remembers Janet Holloman; Raises Funds for Ovarian Cancer Research and Outreach

Primacy and Cartus have joined forces. More choices. More solutions.

The two premier companies in the relocation industry have come together to accomplish what neither could do alone. Together, Primacy and Cartus offer a truly comprehensive range of relocation services wherever you need us to be, and we back it up with the most experienced team in the industry. We give you more choices, and more fl exibility to access services through local delivery or global engagement.

We didn’t join forces just to serve more clients. We joined forces to serve our clients even better.

© 2010 Cartus Corporation • All rights reserved Cartus and the Cartus logo are pending or registered trademarks of Cartus Corporation.PRIMACY and the PRIMACY Logo are trademarks or registered trademarks of Primacy Relocation, LLC.

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Executive Spotlight

Mobility Services International,Newburyport, MA, has named

Melissa Graber, CRP, GMS,regional director of client services.Beltmann Relocation Group,

Roseville, MN, has named BrettBattina, CRP, president of the com-pany’s moving and storage division.RE/MAX Alliance Relocation,

Parker, CO, has named KellyChapple relocation manager.Arpin International Group, Dublin,

Ireland, has named NataszaPrzybylska move coordinator.SIRVA Inc., Chicago, IL, has

named Joseph Halboth, CRP, exec-utive vice president.Coldwell Banker United, Realtors®,

Columbia, SC, has named James E.Altman, Jr., sales associate in thecompany’s Irmo office. John Walland Shea Wall have joined theMidtown office as sales associates.Linda Brener has joined the BuilderServices office as a sales associate.Craig Johnson has joined theCamden office as sales associate.The MIGroup, Ontario, Canada,

has named Ralf Borchert vice presi-dent, client relations for the Asia-Pacific region. Martin Foxwell wasnamed vice president, client relationsin the company’s New York office.David John son, CRP, has beennamed vice president, internationalclient services and administration inthe New York office. Elyse Huettl,CRP, GMS, has been named vicepresident, client services and adminis-tration in the company’s SanFrancisco, CA, office. Roy Brace hasbeen named vice president, globalmoving services, in the New Yorkoffice. Michaelene Spaulding, CRP,has been named vice president, clientservices and administration in thecompany’s Chicago, IL, office. TylerFearn has been named vice president,client services and administration inTheMI Group’s Vancouver, Canada,office, following the retirement ofSteve Lee.The Minnesota Employee

Relocation Council, Minneapolis,,

MN, has announced its 2010 boardof directors. Patti Holey, CRP,Wells Fargo Bank, N.A., was namedpresident. Julie Rice, EquityCorporate Housing, and KristenRuliffson, Relocation Today, werenamed co-vice presidents. DavidArnold, CRP, GMS, Alexander’sMobility Services, was named treasur-er. Jill Burke, CRP, GMS, SIRVARelocation, was named secretary.Sherry Johnson, CRP, RogerFazendin Realtors, Inc., was namededucation chair. Doug McElrath,CRP, GMS, RE/MAX Results, andEileen Hachey, CRP, GMS, PlusRelocation Services, Inc., were namedmembership co-chairs. Beth Ander -son, CSM Corporation, and AngelaFaircloth Kucharski, MarriottExecuStay, were named communitycares co-chairs. Lee Waage, CRP,Plus Relocation Services, Inc., wasnamed web chairperson.Houston Relocation Professionals,

Houston, TX, has announced its2010 board of directors. AndreaVaughn, CRP,Wells Fargo HomeMortgage, was named president.Steve Rogers, SCRP, GMS, CitiGlobal Executive Banking, is ex-officio. Marian Blalock Sauers,Weichert Corporate Housing, was

named vice president. KathyHenderson, CRP, TheMIGroup,was named treasurer. NormaChaney, Heritage Texas Properties,was named secretary. Piper Sheffield,CRP, Stewart Relocation Services,was named board member in chargeof events. Larry Matthews,Armstrong Relocation, was namedboard member in charge of sponsor-ships. Michelle Sandlin, CRP, JohnDaugherty Realtors, will serve asBoard Member in charge of commu-nications. Lana Bergeron, GMS,Transocean, and Charles Ameno,CRP, Chevron, were named corpo-rate liaisons. Carrie Ousley, HubInter national Personal Insurance, wasnamed board member in charge ofmembership. Brian Smith, CRP,Chase, was named board member incharge of the website. Mike Larson,Anadarko Petroleum Corporation,was named board member in chargeof charities. Santa Fe Relocation Services, Kuala

Lumpur, Malaysia, has named JuneMok group immigration manager.A-1 Freeman Moving Group,

Dallas, TX, has hired Paul M.Seymour, CRP, GMS, to manage itsnational accounts and employee relo-cation business.

Worldwide ERC®, Arlington, VA, has namedPeggy Smith chief executive officer. Smith comes toWorldwide ERC® from software giant MicrosoftCorporation, where she was director, global mobility,with responsibility for more than 5,000 annual globalmoves.Michael Washbourn, SCRP, GMS, 2010

Worldwide ERC® president and chairman of theSearch Committee, which presented Smith as theCEO candidate to the association’s Board ofDirectors for their evaluation and approval, noted

Smith

that, “Peggy has served in the top tiers of leadership in Worldwide ERC®,including president and chairman, and on numerous committees and taskforces for the association. She has a keen understanding of the economicenvironment that impacts our business, a recognized sensitivity to anddeep knowledge of a broad range of mobility issues, and the ability tobuild and sustain collaborative relationships: the perfect blend of skills,experience, and vision for our organization and our members.”

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As the global economy is slowlybeginning to emerge from the

worldwide economic downturn ofthe past three years, a new survey hasbeen released that offers a picture ofthe new global workforce that hasemerged in the downturn’s wake.

The survey, “2010 Global Policy& Practices Survey: Navigating aChallenging Landscape,” fromCartus Corporation, Danbury, CT,and co-sponsored by the U.S.National Foreign Trade Council(NFTC), queried 196 HR profes-sionals in the Americas, EMEA, andAsia Pacific representing manufactur-ing, technology, financial services,chemicals, and computer/ telecommunication industries.

The study revealed that organiza-tions are replacing traditional assign-ments with approaches that containincreased flexibility, and that morecompanies reported a drop in long-term assignments than those thatreported gains during the past threeyears. In addition, almost twice asmany companies reported gains inshort-term assignments.

“Given the stiff economic head-winds that companies have faced, adecrease in overall assignment activitysince 2007 is understandable,” saidJohn Arcario, executive vice presidentof Cartus. “The news is the broadexpansion in approaches that compa-nies are taking by deploying talentglobally to achieve their corporateobjectives.”

According to the study, it appearsthat short-term assignments increas-ingly are being used for career andtalent development.

“The greater use of short-term andother assignment types offers a wayto navigate between the need forglobalization and the ability to payfor it,” said William Sheridan, vicepresident of NFTC.

Another key finding is that moreemployers are localizing their assign-ments. Increasingly, employees whotake jobs elsewhere in the world aredoing so with the knowledge that thejobs will be permenant and that com-pensation and benefits will be morereflective of the scales used at thedestination location, according to thestudy.

“While companies still need toensure they have the right talent inthe right places, they are employingworkforce strategies that move awayfrom traditional, long-term expatriatepackages and trend toward modified

benefits and pay scales,” said Arcario.More than 50 percent of respondentssaid they expect localization and per-manent transfers to increase duringthe next two years.

“Companies are dealing with myri-ad of challenges and opportunities,such as new demographics thatdemand new types of support,emerging markets, and rapid globalexpansion,” said Arcario, adding,“No one single solution answers allthose needs, and companies areimplementing a broad array ofapproaches to continue their globalbusiness expansion goals.”


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Hayden Moore LLC, Chagrin Falls, OH, has announced the launch ofProperty Risk Analysis, a product to assist recruiters and job candidates in get-ting a realistic assessment of home value and property risk factors.RW3 CultureWizard, New York, NY, has announced the launch of an

online cultural learning platform, CultureWizard 3.0.United Van Lines, St. Louis, MO, has announced a new residential delivery

service that will allow businesses to rely on United to deliver products directly tocustomers. Graebel Companies, Inc., Aurora, CO, has announced its three websites,

Graebel.com, MoveMyHouse.com, and MoveManagementInc.com, now are certified to Display TRUSTe® EU Safe Harbor Seal.Prudential Real Estate and Relocation Services, Inc., Irvine, CA, and

RealtyTrac™, Irvine, announced they are expanding their business relationshipto more powerfully integrate RealtyTrac’s comprehensive national foreclosuredata into Prudential’s national property listing website, www.prudentialrealestate.com. Prudential also announced its affiliation with Realty Group,Indianapolis, IN, which will operate as Prudential Indiana Realty Group.The company also announced the affiliation of Joyce Realty, Pearl River, NY,which will operate as Prudential Joyce Realty . Prudential also announcedthe merger of Affiliated Realty Group with Prudential Utah Elite RealEstate.Coldwell Banker Residential Brokerage, Westport, CT, has announced

the acquisition of assets of Fine Homes Connecticut/USA, Westport.Cartus Corporation, Danbury, CT, has named CENTURY 21 Scheetz,

Indianapolis, IN, as the sole principal broker responsible for providing real estateservices for the Cartus Broker Network in the greater Indianapolis market. Michael Saunders & Company, Punta Gorda, FL, has announced a new

full-service real estate office to serve Punta Gorda and the Charlotte Harborregion.RealtySouth, Orange Beach, AL, has announced that it has expanded office

space at SanRoc Cay in Orange Beach, AL.American Relocation Connections (ARC), Fairfax, VA, has announced an

exclusive agreement for relocation services with Brickman Group,Gaithersburg, MD. ARC also announced it has been selected to provide reloca-tion services to Defense Nuclear Facilities Safety Board (DNFSB) an inde-pendent federal agency established by Congress in 1988. ARC also announcedtwo recently made modifications to its offering for relocation services underSection 48 of the GSA Schedule. ARC added the Shipment of Household Goods(SIN 653-7) to the list of relocation services, and received approval from theGeneral Services Administration to expand the list of services under SIN 653-4(Relocation Services: Other,) adding “Property Management.”Atlas Van Lines, Evansville, IN, has launched a new consumer website,

www.atlasvanlines.com, allowing visitors to find a local Atlas mover, obtain aninstant moving quote, track shipments, and access moving information and tips. Arpin Group, West Warwick, RI, has announced the acquisition of the stock

of Affiliated Transportation Systems (ATSI), Lawton, OK, and eight relatedcompanies.one-group, Basel, Switzerland, has announced that EuroMove, Budapest,

Hungary, has been added as a partner. OneSource Relocation, Marietta, GA, has announced the release of Policy

Builder, a web-based, interactive tool for building relocation policies.

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Quick Takes

W orldwide ERC® members are exchanging questions, answers, and ideas in our online discussionForums. Current discussions include:

U.S. Domestic All Members Forum: “For those of you who gross-up relocation benefits, do you providethis for all relocating employees/levels—new hires and transferees? And, if you do not gross-up for all levels, atwhat level do you begin?

The Green Forum: “A household that invested $90 in changing 30 fixtures to compact fluorescent lamps(CFLs) would save $440 to $1,500 over the five-year life of the bulbs, depending on your cost of electricity—which is location-specific within the United States and the world. To get a good example of what you wouldbe able to save, just look at your utility bill and imagine a 12 percent discount to estimate the savings.”

eDiscussions—Corporate HR Only Forums: “We are revamping our global mobility policy and haveencountered a few challenges, one of which is lump-sum payments in the APAC region. Do you use lumpsums in lieu of providing relo benefits? If so, how is this calculated? As a percentage of salary? One month’ssalary? U.S. dollar guideline converted to local currency? Other? If you do use lump sums, do you differentiatebetween intra-regional moves (e.g., Singapore to Indonesia) and global moves (e.g., United States/UnitedKingdom to Singapore).”

The China Blog: “China’s new Labor Contract Law—That now two-year-old law became effective to muchgnashing of multinational corporate teeth, but it’s been in place for a bit, the world hasn’t ended, the Chineseeconomy is still growing,” writes Mark Giorgini, GMS, as he begins to discuss “what’s happened since imple-mentation and what this means for businesses here [in China].” Read the replies and discussion that these posts solicited. Log-in to the Communities and post your com-

ments and questions today. Visit www.WorldwideERC.org/Pages/Web2.0.aspx or click on the white “Commu -nities” text hyperlink at the top of every page of www.WorldwideERC.org. Note that access to the forums is anexclusive benefit of Worldwide ERC® membership.

Communities

Attention GMS™ Designees

You should have receivedan important e-mail fromthe Worldwide ERC®

Professional Developmentdepartment during the week of24 May 2010, with regard tosome exciting changes takingplace. Effective 1 June 2010,the GMS recertification renew-al requirements have changed.In addition, Worldwide ERC® has introduced a newlevel to the program: a Senior Global MobilitySpecialist (SGMS) designation. Check your e-mailfor additional information or visit the GMS sectionof the Worldwide ERC® website,www.WorldwideERC.org/Education/GMS/Pages/gms.aspx. And stay tuned for more details in next month’s

issue of MOBILITY.

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THE EUROPEAN

UNIONEVERYTH ING YOU EVER WANTED TO KNOW BUT WERE AFRA ID TO ASK

dean1_MOBILITY 5/10/10 1:53 PM Page 2

B Y A N N E D E A N , G M S


As I started my researchfor this article, I real-ized how much I didnot know about the

European Union (EU). Yes, I knewhow many countries were involved,how it started, and its basic purpose.What I did not understand was thecomplexity of its structure.

Europe has undergone turmoil andwarfare for hundreds of years. It onlyhas been as recent as the 1900s thatEuropean countries have put asidefeuds that tore them apart for solong.

Because of this, they have beenable to focus on improving theireconomies and stabilizing their gov-ernments. From these diplomaticagreements, the EU was established.

Post-World War II destruction leftEurope with the daunting task ofrebuilding its crushed economies.The European Coal and SteelCommunity (ECSC), the organiza-tion that has become known as theEuropean Union, was established bythe Treaty of Paris (1952). Thetreaty also is known as the SchumanPlan after the French ForeignMinister Robert Schuman, who pro-posed it in 1950.

Six countries banded together toform the ECSC to strengthen politi-cal and economic influence. Thesecountries were Belgium, WestGermany, Luxembourg, France,Italy, and the Netherlands.

During the next 50 plus years, theECSC grew into the EuropeanEconomic Community and, eventu-ally, the European Union (EU). The

EU currently has 27 members, withTurkey, Croatia, and the formerYugoslav Republic of Macedoniaawaiting membership. In July 2009,Iceland applied for membership andis hoping to join by 2012.

The application process for joiningthe EU is normally about three to sixyears. Keep in mind that membershipis not measured by the amount oftime a country has waited, butrevolves entirely around when theyhave met certain stringent criteria,including:

Geography. The applicant nationshould be close to Europe, but notnecessarily be a part of Europe. Forexample, it could be argued thatTurkey is part of the Middle East, yetit is being considered for member-ship.

Democracy. All members musthave a democratic government. Theircitizens must all participate in anequal manner (one person equals onevote); they must have free elections,secret ballots, and political parties;and a country’s constitution and lawsare not subject to change to suit thepolitical party that is in power.

Human rights. Human rightsmust be observed for all people;there can be no slavery or torture,and the government must haverespect for human beings.

Economy. Members must have afunctioning market economy that cancompete with other markets in theEU, as well as globally. In otherwords, new member nations cannotbe a financial burden on the rest ofthe EU members.

The early concentration of theECSC was on economic policiesdealing with steel, coal, and agricul-ture. By combining their resources,member nations could rebuild theireconomies at a faster rate. As mem-bership grew, the EU developed poli-cies for currency, foreign competi-tion, and the environment, to name afew. Members have learned to com-promise and work together to com-pete in the global marketplace.

Understanding the EUThe EU can be called the world’s

newest superpower, becoming theworld’s biggest marketplace and trad-ing power—one day could it bereferred to as “The United States ofEurope?” Among its other benefits,the EU has allowed Europe to enjoythe longest spell of wide-rangingpeace that it has seen in centuries.The EU has helped promote democ-racy and economic developmentthroughout Europe, and it hashelped nearly 490 million Europeansrise above political, economic, andsocial differences. With 16 out of 27member states using the euro, it hasmade that currency one of theworld’s most important monies(along with the U.S. dollar andJapanese yen).

Knowledge of the EU is a mysteryto most Americans, and evenEuropeans are bewildered by it. Mostcitizens of the member states supportthe idea of the EU in principle, butwill readily admit that they know lit-tle about how the EU actually works,who makes the decisions, or how the

Dean presents a brief history of the European Union (EU), and explains its organization, progress, and future.



EU has or will change their lives.Great passion for the EU is harder tofind than a lack of interest. Everyoneknows how, when, and why theUnited States exists, but theEuropean Union has yet to establisha clear profile on the internationalpolitical and economic scene, leavingpeople unsure about what to think.Several reasons for the confusion are:

The EU is unique. What is itexactly… an international organiza-tion? New European superstate?Something in between? How muchauthority does it really have over themember states? How does its powerand structure differ from a traditionalgovernment… is it a government atall?

It sounds confusing. Books, arti-cles, websites, blogs, and the like onthe EU have been a growth industryduring the past 10 years, but muchof it has been dedicated to treaty arti-cles or what is referred to as “Euro -jargon.” The entire organization isfull of colorful characters and moti-vated by conflict, conspiracy, success-es, and failure, yet much of what iswritten makes it sound dull and defi-nitely full of legalese!

The EU is constantly changing.When you think you are finallygrasping its complexities, a newtreaty is signed with a new set ofpowers, its leaders agree to new goalsthat give it a different “face,” or itscomplexion is changed by the admis-sion of new member countries.

Who, What, When, and WhereBecause of the EU there is virtual-

ly unlimited free movement of peo-ple, money, goods, and servicesamong most of its member states. Ithas its own flag (a circle of 12 goldstars on a blue background, whichsymbolize the ideals of solidarity,

harmony, and unity among themember nations), and usesBeethoven’s “Ode to Joy” as itsanthem (just music, no words),national passports have been replacedwith a uniform EU passport and, inmany ways, Brussels has become thenew capital of Europe.

“The decision, 50 years ago, tobase the European Institutions inBrussels has had an enormousimpact,” said Eileen Money, generalmanager of MAP Relocations,Overijse, Belgium. “Because of theEU, Brussels has the world’s largestnumber of foreign journalists; theworld’s largest number of foreigndiplomats; 26 international schoolsfor expats; 2,000 foreign companiesheadquartered in Brussels employingsome 80,000 multilingual locals; and300 representations of Europeanregions and cities.

“There has also been a significantimpact on the real estate market inBrussels and surrounding areas withthe presence of the EU. It is limitedto certain areas, often related to thelocation of international schools, butover time has had a cumulative effectas the housing stock in the EU dis-trict is used up and the prices rise, sopeople move further out from thecenter and again, cause prices to rise.Thirty percent of the population ofBrussels is from outside Belgium;half of these from other EU states,”she said.

There are five main organizationsin the EU. Their powers and authori-ty have grown steadily since the1950s. The five are:

The European Commission(EC). This is the executive andadministrative branch, responsible forproposing new EU legislation, imple-menting decisions, upholdingtreaties, and the general running of


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the body. The EC is based in Brus -sels, consists of 27 commissioners,one of whom is appointed as thepresident. The responsibility of thecommissioners is to the EU and itsbest interests, rather than their homecountry.

The Council of Ministers, alsoknown as the Council of theEuropean Union. Also based inBrussels, this is the major decision-making body of the EU, made up ofgovernment ministers from each ofthe member states. Although it doesnot have the power to propose newlegislation, for any EU law to bepassed or budget to be agreed on,this body along with the EuropeanParliament must vote in favor of it.

The European Parliament. Di -vided among Strasbourg, Luxem -

bourg, and Brussels, the EuropeanParliament is elected to five-yearterms by the voters of the memberstates. It cannot introduce proposalsfor new legislation; only accept,reject, or amend laws. The presentparliament, elected in June 2009, has736 members of the Euro peanParliament (MEPs). The number ofMEPs a member nation can have isrepresentative of its population.

The European Court of Justice.Based in Luxembourg, “the court”as it is often referred to, interpretsand enforces EU law while helpingto build a common body of law thatis applied throughout the memberstates. It is the highest court in theEU (established in 1951 under theTreaty of Paris), having more cloutthan national supreme courts. The

court is made up of one judge fromeach member state, plus eight advo-cates-general, whose job is to deliverlegal opinions on each case. Mem -bers of the court serve a six-year termand are nominated by their homegovernments.

The European Council (not tobe confused with the Council ofthe European Union). TheEuropean Council establishes theEU’s basic political guidelines. Itconsists of the political leaders of themember states (and their foreignministers), the president of theEuropean Commission, and an elect-ed president who serves a two-and-a-half-year term. They meet at leasttwice a year at which time they make


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broad decisions on policy, the detailsof which are worked out by theCommission and the Council ofMinisters.

What’s Next?European integration is like an

unfinished history book—a work inprogress—the balance of poweramong national governments andEU institutions is constantly evolv-ing. A balance that will change asmore countries join the EU and asintegration reaches further into thelives of Europeans. What effect willthe EU’s progress have on theUnited States and Canada?

The most obvious implications areeconomic. The United States madeit through the Cold War relativelyunscathed; however, much haschanged in recent decades with therise of competition from Japan, thenfrom Europe, and now from Chinaand India.

The United States still is theworld’s largest national economy, butthe combined European market isnearly 10 percent larger and its popu-lation is nearly two-thirds bigger.

The euro is slowly nipping away atthe position of the U.S. dollar in theworld market; Euro pean corpora-tions are becoming bigger, morenumerous, and more competitive.The EU already has replaced theUnited States as the world’s biggestexporter and importer of goods.

The progression of global politicaland economic change is moving at afairly rapid pace, and the outcome ofthe EU basically has changed the wayin which the world functions, as wellas altered the place of the UnitedStates in the worldwide system.

Going forth into the 21st century,it will be interesting to watch thedirection the EU takes. With its highstandard of living and well-educatedworkforce, the EU is poised andready to become a world superpow-er. For much more information onthe EU, visit its official site,http://europa.eu/.

Anne Dean, GMS, is the director of editorialservices for Living Abroad, LLC, Norwalk,CT, and a member of the MOBILITY GlobalEditorial Advisory Committee. She can bereached by email at +1 203 221 1997 or e-mail [email protected].


http://www.intermarketrelocation.ru


W e are closer to the globaleconomy than you think.Just look in your closet—

you might find business suits made inChina, India, Guatemala, Korea,Mexico, and United States; shirts andties made in Canada, China, France,and the United States; and shoesmade in China, Italy, and Spain.

Just as our wardrobe does, theglobal economy touches each of usevery day: it’s in our closet, the modeof transportation we take to work,the type of technology we use forcommunication, even the paper onwhich this article is printed. Thesame is true for the employee mobili-ty industry.

The ‘Big Shift’“Looking beyond the current eco-

nomic crisis, a ‘big shift’ is occurring,driven by digital technology infras-tructure and connectivity,” said JohnHagel, co-chairman, Deloitte LLPCenter for the Edge in a Podcasttitled, “Public-private Intersection:The Big Shift” on the Deloitte web-site. “As a result, governments areencouraged to develop policies thatfoster investments in technology,retain in-country creative talent andencourage mobility, thereby intensi-fying local economic growth andglobal competition.”

The “shift” has occurred in manycountries across the globe, with some

moving at a more rapid pace thanothers. For example, in Australia, theInternet is offered to all citizens at nocost. New Zealand is identified as oneof the top places in the world to starta new business. China is the numberone country for access/usage of socialmedia tools, with more citizens usingtechnological equipment than in anyother country in the world.

This digital push will continue asthe younger generation climbs up thecorporate ladder and as we becomemore aware of and comfortable usingnew products. Corporations musthave broad types of these socialmedia attractions to compete in anymarket.

B Y T O M W O R T H A M , C R P, G M S

The global economy touches all aspects of life. From our clothes to our cars to the food we eat, a day

rarely goes by when something from abroad does not pass through our hands. This is especially true

in workforce mobility, as employees are moved globally and are influenced by the economy and its

far reach. Wortham examines how the worldwide economy affects the employee mobility industry.

The Global Economy: Closer Than You Think

wortham2_MOBILITY 5/12/10 11:03 AM Page 1


As a reality check, do you remem-ber when cell phones first becameavailable? Handsets were so largethey had to be mounted in thetrunks of cars, and the cost was closeto $1,000. Now they can be carriedin your pocket and serve as a phone,texting device, Internet tool, andcamera. So we see, the big shiftcomes in the tiniest of packages.

Global Talent Retention StrategyA focus on technology is

paramount, but some might say itwill be more important to focus onstaff and growing talent in comingyears. We all know employee turnovercan be costly to organizations. Onceyou attract, obtain, and possiblymove an employee, retaining anddeveloping their skills can be a signifi-cant challenge. It also is important tokeep your talent pool satisfied toavoid turnover to other business unitsor competitors. Although immigra-tion policies keep a tight hold on themovement of employees, movementamong the younger staff/talent hasincreased for opportunities outsidetheir home country. Fresh ideas thatcreate value will be the key drivers ascompanies review, retain, and buildthe skillsets of their staff.

Employers should be careful not toassume that this sluggish economyserves as a shield from employeeturnover. Instead, organizations mustbe aware that top performers can findanother job, and those team membersremaining with the organization can-not absorb the workload of employ-ees who have been lost through attri-tion or reductions in force. Last,

organizations must focus on retainingtalent with the highest knowledge ofthe business/industry served.

Information is a key component inretaining talent. In its absence, peoplewill create their own stories/facts,which usually are driven on an emo-tional level. Upfront communicationwill help avoid this situation, and allthe potential woes that go hand-in-hand with misinformation. Withinthat communication also needs to bea clear value-proposition to ensureteam members with varying skills willnot only join your organization, butalso entice current team members toremain.

Recent findings from CartusCorporation’s 2010 “Global MobilityPolicy and Practices Survey,” whichqueried nearly 200 HR practitionersworldwide, indicate that a new globalworkforce is emerging from the eco-nomic doldrums of the past threeyears. In addition, assignment typeshave evolved from the traditionallong-term-with-family-in-tow type tothe more prevalent short-term stintfulfilled by a young, single assignee.In addition, short-term assignmentsincreasingly appear to be used forcareer and talent development—agoal historically associated with long-term assignments.

Global Expansion of SmallerBusinesses

Small businesses also are spreadingacross oceans to obtain new marketshare. As recently as 2008, the U.S.demand for their services was ampleenough to keep these organizationsat full staffing and profitable. How -

ever, as these businesses now workthrough the limitations presented ingaining additional market share inthe U.S., expansion overseas seemsto make good business sense.

“For a year, I have seen a signifi-cant increase in attendance at exportservices seminars and trade shows,”said George Tastard, director of U.S.Export Assistance Center, in the arti-cle “Going Global” published in theSacramento (CA) Business Journal.“In fact, in 2009, there were morerequests for this assistance than dur-ing any other time in the past fiveyears.”

An important reality to keep inmind with decisions regarding globalexpansion is the “face time” that isrequired based on the culture of thenew location. For example, in Asia, abusinessperson often will require thebuilding of a relationship prior todoing business or entering into acontract. Therefore, having local tal-ent that knows the culture will assistin reducing this time cycle.

Global Business AdventureRunning a team can be a challenge.

Running a virtual team? Even moreso. Now imagine running a virtualteam with people all around theglobe, with all of the language andcultural barriers that can arise. Doneproperly, it can be great; done wrong,it can be a very expensive mistake.

Christine Mason McCaull, co-founder of ClickMarkets, describesher experience of global expansion/outsourcing in the article, “When the World is Your Friend,” on portfolio.com. Her firm has been



working with development teams andoutsourced service providers from allover the world. They started in theirown backyard and then expanded toIndia and the Philippines. Much likeMcCaull’s successful global growthwith ClickMarkets, many other com-panies as small as 10 to 15 employeesare looking at the global economy,and expanding accordingly. How -ever, knowing what to outsource canbe challenging. Technology, devel-opment, or process tasks that are easyto document can be easier to out-source than products, for example.One other important factor to con-

sider are tasks that would be consid-ered “culture heavy” such as lan-guage, copywriting, branding, usabil-ity, and visual standards.

Change is ConstantOne thing is certain: our wardrobe

in our closet, the transportation wedrive or ride, and the technology weuse will all continue to change andevolve. This, too, is the ongoingchallenge of our global economy.Most experts predict the global econ-omy is on the way to recovery, butconsumers are still cautious. Be care-ful, seek advice from global profes-

sionals, and ensure that you under-stand what you are getting into whenyou begin your journey of globalexpansion. If you have well-definedtasks and can communicate allrequirements clearly, the globalexpansion can be a huge success.Staying educated in critical areas suchas retention, expansion, and aware-ness of our surroundings will help usbecome more comfortable in thedecisions we make in the future.

Tom Wortham, CRP, GMS, is director,business development for Primacy Relocation,Irving, TX. He can be reached at +1 972 8703164 or e-mail [email protected].


http://www.worldwideerc.org/Membership/Pages/relocation-services-membership.aspx


THE BASICS OF SPLIT PAYROLLS FOR EXPATRIATES:

Splits and Shadows

dillon1_MOBILITY 5/10/10 4:35 PM Page 2


Say the words “split payroll” in the pres-ence of any global mobility or payrollmanager, and you likely are to get a veryunfavorable response. Split payrolls, orthe broader term, “dual payrolls,” areoften the bane of global mobility man-

agers because of their complexity and need for exten-sive coordination.

The term “split payroll” can be used in many con-texts. This article highlights several of the primary rea-sons companies use split payrolls (or in a broader con-text, dual payrolls), as well as the four primaryapproaches for structuring these arrangements.

Before delving into this topic, though, it is importantto note the difference between “split payroll”—anarrangement under which funds are paid to an employ-ee from both home- and host-country payrolls—and“split delivery,” an arrangement under which funds aredelivered to the assignee in the host country, but notnecessarily from the host payroll. Under a split-deliveryapproach, funds could be wired from the home payroll.

If you have international assignees, you most likelyhave a least one assignee on some sort of dual-payrollarrangement, even if your stated practice is that 100percent of your assignees are paid by home (or host)payroll. According to Deloitte’s GlobalAdvantagePolicy Forum (Chart 1), participants report a wide vari-ety of practices in response to the question, “In whatcurrency/currencies do you generally deliver theassignee remuneration?”

B Y A M Y P A R R E N T , G M S , C B P, C C P

Split payrolls are complex strategies for compensatingemployees that require extensive coordination betweeninternational HR professionals, payroll teams, servicesproviders, and assignees. Parrent discusses the advantages and disadvantages of split payrolls, as well as the four primary approaches.

Total in home currencyGoods/services element in host currencyand rest in home currencySplit per assignee request between homeand host currencyTotal in host currencyTotal or part paid in third currencyPay split based on advice from externaladvisersOther

CHART 1

5% 6%

9%

9%

1%

32%

38%



Advantages and DisadvantagesThere are several reasons why

companies implement dual-payrollarrangements:• exchange-rate protection for theassignee;• assignee convenience and personalcash-flow management;• legal/labor law requirements, as inthe case of foreign nationals workingin Russia or Brazil;• tax withholding requirements; and• determination of pensionable earn-ings in home-country pension plans.

On the other hand, there can besome limiting factors. For one, dual-payroll arrangements can be complexand expensive to administer, particu-larly when the home and host coun-tries are not on the same pay frequen-cy; for example, when one pays bi-weekly while the other pays monthly.In addition, they may not completelyavoid exchange rate risks for whichthey were established in the first place.

Four Primary ApproachesThere are four primary approaches

for dual payroll, each with a specificpurpose. Many companies use a com-bination of these approaches.

1.The “recommended” split.This type of split is based on

the traditional balance sheet. Underthis approach (see Exhibit A), home-related spendable items, such asgoods and services, housing norm,and hypothetical tax are deductedfrom the base salary at home, whilecorresponding host goods and ser-vices spendable and housing allow -ance are delivered to the assignee inthe host country in host currency.The amounts are pre-determined bythe company based on informationreceived from remuneration dataproviders. Companies that use thistype of split primarily do so to protectthe assignee from exchange-rate fluc-tuations and to deliver funds in thecurrency in which the assignee is mostlikely to need them.

This type of split does require par-ticipant education so that employeesunderstand how to use their payroll tosupport their spending patterns andderive optimal exchange-rate protec-tion. According to Sheri Gaster, amanager for ORC Worldwide, Dallas,TX, “to ensure the advantage of splitpay is achieved, companies need tomake sure the cash flow management

issue is addressed by educatingemployees about what componentsare to be paid in home versus assign-ment country currency and why, andthen stick with that split.”

2.The “flexible” split. Similarto the recommended split

approach described above, the flexible-split approach seeks to pro-tect the employee from exchange ratefluctuations to the extent possibleand to deliver funds in the host cur-rency where the assignee needs themmost. A significant difference, howev-er, is that this approach leaves it up tothe employee, rather than the compa-ny, to determine the amount he orshe wants delivered via host payroll—in effect, giving the employee controlover his or her own funds (seeExhibit B). This same approach canbe used for employees who are on thehost payroll, but who want fundsdelivered by their home payroll tomeet any home-country obligations.

In practice, this approach cancause a number of headaches forinternational HR and payroll depart-ments. One consideration is whetherto allow the employee to select a per-centage of his or her net pay or touse a fixed amount. In general, fixedamounts usually are easier to imple-ment and administer. Another set ofconsiderations involves whether theamount will be stated in home orhost currency, the exchange that ratewill be used (e.g., spot rate, averagerate, source), and how frequently theexchange rate will be updated. Thethird key consideration is the fre-quency with which employees maychange their splits. In general, com-panies should consider setting limitson the number of times an employeemay change his or her split; accord-ingly, many have quarterly or semi-annual limits for making changes.

Exhibit A – Recommended Split (balance sheet approach)

Name: Joe ExpatHome: United StatesHost: ItalyFX USD 1: EUR 1.36

PAY DELIVERY Home HostREPORT (USD) (EUR)

Base 10,000Home spendable (2,000)Host spendable 5,000Housing norm (1,800)Housing allowance 6,500Hypo tax (2,000)Net pay $ 4,200 € 11,500



As an example, one large oil com-pany offers assignees not remainingon their home payroll the option tospecify an amount to be paid in thehome location. Furthermore, assign -ees may change this amount quarter-ly. The amount is paid in the homelocation through payroll, deductedfrom the assignment payroll, and rec-onciled on a monthly basis.

While the main objective of therecommended split and the flexiblesplit is to protect employees as muchas possible from exchange-rate fluc-tuations by delivering a portion oftheir pay in the currency they needmost, there are other ways of accom-plishing this goal without goingthrough the additional complexity ofsetting up a dual payroll or splittingpay delivery. These include:

• using global banking services—essentially an arrangement for out-sourcing split-pay delivery. Often, thecost of these services is small in com-parison to the administrative timesaved. In addition, employees alsocan take advantage of the many otherfeatures that typically come withglobal banking services;

• increasing the frequency of cost-of-living updates. Exchange rate fluc-

tuations are built into cost-of-livingdifferentials. Companies that histori-cally have updated these differentialsonly on an annual or semi-annualbasis could choose a more frequentschedule, such as quarterly, and bydoing so provide better protectionfor employees; and

• offering exchange rate protec-tion. If employees truly perceive theyare disadvantaged (or the companyperceives they are overly advantaged)by exchange rate fluctuations, theorganization could create protectionin the form of reconciliation. Someemployers offer this only on request,while others mandate regular recon-ciliation to prevent employees fromonly taking advantage of reconcilia-tion when the exchange rate works intheir favor.

3.The enforced split. Somecountries have strict payroll

requirements that must be followed,even for expatriates working tem-porarily in those locations. Brazil andRussia are two such examples.

Brazil has a highly “employee-friendly” labor market. As a result,foreign nationals working in Brazilmust have a minimum amount ofwages delivered locally, commensu-

Exhibit B – Flexible Split

Name: Joe ExpatHome: United StatesHost: ItalyFX USD 1: EUR 1.36Split selection: EUR 5000 per month

DELIVERY Home HostREPORT (USD) (EUR)

Base (REG) 10,000Home spendable (HMS) (2,000)Host spendable (HSS) 3,676Housing norm (HSN) (1,800)Housing allowance (HSA) 4,780Hypo tax (HYPO) (2,000)Less local draw (3676) 5,000Net pay $ 8,980 € 5,000

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rate with local company categoriesand salary scales. The amount isdetermined by the Brazilian NationalImmigration Council or the Ministryof Labor.

Russia’s salary requirements areeven more stringent. An employee’smonthly salary may not be set belowthe minimum wage established byfederal law. Furthermore, the salarymust be paid in monetary form, inrubles, and in no less than twomonthly installments on the datesestablished by the employer’s internalpolicies and in the employment con-tract.

Other countries have similarrequirements; therefore, you shouldalways consult with your tax orimmigration provider to understandthese requirements before sending anemployee to a new country.

4.The “shadow payroll” (alsoknown as “mirror payroll” or

“ghost payroll”). This arrangement isnecessary when the employee receives100 percent of his or her pay in thehome country, but that payroll mustbe “shadowed” or “mirrored” in thehost country for the calculating, re -

mitting, and reporting host countrytaxes. There typically is little effect onthe assignee because nothing actuallyis delivered to the employee. In fact,he or she may not even know there isa shadow in place.

Companies with foreign nationalsworking in the United States whoremain on their home country payrollmust have a shadow payroll in theUnited States so that the companycan perform appropriate tax reportingand make remittances for federal,state, FICA (if there is no totalizationagreement), and FUTA/SUTA pur-poses. Exceptions to this rule exist forcertain tax treaties and visa types.

Shadows also may be set up inhome countries for employees whoreceive host payroll to allow them toremain in certain home country pen-sion or social plans, or in the case ofexpatriates from the United States, toreport taxable wages for W2 purposes.The only evidence of this the employ-ee may see are deductions from his orher host payroll to cover costs ofmaintaining participation in certainhome-country plans (e.g., social taxcontributions, pension contributions).

Final ConsiderationsIn addition to considering the

administrative complexities of eachof these approaches, you also willneed to define clearly which businessunit is bearing the cost of compensa-tion and ensure that the expenses arecharged to the appropriate cost cen-ter.

Careful coordination is necessaryto make sure that cost centers arenot inadvertently double chargedwhere dual payrolls are in effect.

In conclusion, there is no predom-inant best practice or one-size-fits-allapproach when it comes to dual pay-rolls. Companies should evaluatetheir payroll needs based on theirpolicy, payroll practices (includingpayroll frequencies), technologycapabilities, locations, and availableresources.

In any scenario, the critical successfactors will be open communicationamong international HR and payrollteams, service providers, andassignees.

R E L O C A T I O N

Amy Parrent, GMS, CCP, CBP, is a globalmobility director at Deloitte Tax LLP. She canbe reached at +1 214 840 1476 or [email protected].


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devito1_MOBILITY 5/10/10 1:43 PM Page 2


W hile driving down the streets of Johannesburg,locally known as “Joburg,” it is easy to forgetthat you are in the subtropical highland cli-mate of South Africa. High rises and skyscrap-

ers cast shadows over a financial district booming with activitythat you would expect in a European nation. That is until younotice a flange of baboons on the side of the street.

South Africa—a Growing Expatriate DestinationSouth Africa is nicknamed the “rainbow nation,” an acknowledgement of the coun-

try’s diverse cultural environment. With one of the most complex populations in theworld, South Africa is comprised of approximately 40 million citizens ranging in raceand religion, and speaking 11 official languages.

The Expatriate Experience in South AfricaB Y M I C H E L L E C O L O N A A N D D A N I E L L E T U R N E R

South Africa is a culturally diverse region that provides several notable advantages

for businesses to add operations in the country. With its strategic geographic

location and export capabilities, the market for expatriates continues to increase.

As with any foreign assignment, there are certain risks that can be avoided.

Colona and Turner write that receiving proper inoculations, being cautious of

the surrounding environments, and understanding the difference in health care

practices are important to preparation for a successful assignment to South Africa.


The cultural diversity of SouthAfrica is a contributing factor to theheavy investments of numerous well-known international companies dur-ing the past 20 years, such as BMW,General Electric, and Levi Strauss.There are several advantages forcompanies to host operations inSouth Africa, including lower laborcosts and the ability to export theproducts to an international market.

According to the AmericanChamber of Commerce in SouthAfrica, nearly 50 percent of thechamber’s members are Fortune 500companies, and that more than 90percent operate beyond SouthAfrica’s borders into southern Africa,sub-Saharan Africa, and across thecontinent. South Africa’s strategicgeographic location provides accessto the expansive African coast lines,

the Middle East, Asia, Australia,Europe, and the Americas alongwell-established maritime traderoutes.

The businesses that make up theAmerican Chamber of Commerce inSouth Africa are, in part, strengthen-ing the Johannesburg Stock Ex -change (JSE), which operates as the18th-largest stock exchange in theworld. The JSE supports the cycle ofraising capital and filtering it throughcash resources, which continues tostrengthen South Africa’s economicstatus while simultaneously creatingopportunities for jobs and wealth.

Preparing for AssignmentBefore leaving for assignment,

expatriates should receive specificvaccines for preventable diseases andother diseases that present higherrisks of contraction in South Africaincluding hepatitis A, hepatitis B,typhoid, rabies, malaria, as well asroutine vaccines. For the most bene-ficial treatment, the Center forDisease Control and Prevention(CDC) recommends visiting a doctorwho specializes in travel medicine atleast four to six weeks before leavingon assignment. This allows time for


Malaria Awareness

A lthough malaria continues to be a potential health threat to

more than 90 countries in the world, the greatest risk occurs in

sub-Saharan Africa. And while the malaria parasite is transmitted

through the bite of an infected female mosquito, expatriates in South

Africa can take certain precautions toward protecting themselves.

The Department of Health in South Africa suggests the following

preventative measures:

• remain indoors between dusk and dawn;

• wear long-sleeved clothing, long trousers, and socks when going

out at night;

• cover doorways and windows with screens and, if unavailable,

close windows and doors at night;

• apply a DEET-containing insect repellent to exposed skin and

repeat as recommended on the container label; and

• use a mosquito-proof bed net over the bed, with edges tucked in.



the vaccines to take effect. This alsois the time to start taking preventivemedicine against malaria.

If you or any family members whomay be traveling on assignment withyou take prescription medication, it isimportant to make sure you haveenough to last the duration of thetrip. The CDC recommends keepingthe medication in its original packag-ing or bottle and storing it in yourcarry-on luggage. It is important tonote that some prescription drugs in

the home country are considered ille-gal in other countries. For this rea-son, it may be beneficial to ask yourphysician to write a letter specifyingyour medical need for the prescrip-tion on office stationary and print theoriginal prescription on office sta-tionery.

Available Health Care to Expatriatesand Standards

As an expatriate or business travel-er working in South Africa, a big

question may concern the health caresystem. The health care system inSouth Africa primarily consists of alarger public sector and a quicklygrowing private sector that offer acombined range of services.

“The health care available in theprivate sector of the urban centers inSouth Africa is excellent and on a parwith developed countries; however,expatriates should be aware thataccess to specialists and expectationsfor payment may be different from


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home countries,” says LyndonLamicack, M.D., senior medicaldirector at CIGNA InternationalExpatriate Benefits, Claymont, DE.“To ensure that expatriates receiveproper care, it’s important for themto have guidance from a knowledge-able source, such as an internationalmedical insurer.”

The growth of the private sector isattributed to several factors, includingthe exhaustion of resources in thepublic sector, a higher quality of doc-tors and hospitals, and an influx ofinternational organizations and expa-triates assigned to the region. A highnumber of travelers also are visitingSouth Africa for “health safaris,”

commonly known as medical tourism,from North America and Europe forcomparable services at a cheaper price.

The number of private hospitalsand clinics continues to grow. Therewere 161 private hospitals four yearsago. Now there are 200. Netcareoperates the largest private hospitalnetwork in South Africa and also is

Headquartered in Michiganwith Offi ces Around the World

If you are greeted with a bow in Japan, whatshould you do?

a. Attempt to shake hands

b. Return the bow

c. Slightly nod your head

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In Germany, men enter rooms before women iftheir age and status are roughly equivalent.

a. True

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a. Personal connections

b. Long-term relationships

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The Expatriate Pre-departure Checklist

• obtain all inoculations required for assignment in South

Africa such as hepatitis A, hepatitis B, typhoid, rabies, malaria,

and all other routine vaccinations.

• Assess and plan for potential environmental risks.

• Arrange for a 12-month supply of all prescription medications.

• Locate and become familiar with a family physician and the

closest hospital while on assignment.

• Ensure all visas and work permits are valid.


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the biggest private trainer of emer-gency personnel and health careworkers. Among all of the hospitalsin the Netcare network, MilparkHospital and Sunninghill Hospitalstand out for exceptional care in spe-cific situations.

Aside from having a world-renowned Level 1 Accredited

Trauma Unit with highly specializedcardiology and cardio-thoracic ser-vices, Milpark uses the whole-bodyx-ray technology to assess trauma.This technology was first developedby DebTech, the research and devel-opment arm of De Beers. The com-pany says that these machines pro-duce images of such high resolution

that tiny diamonds can be detectedon or inside the human body. Whenused in a hospital environment, thedigital x-ray system can produceclear, diagnostic whole-body picturesin just 13 seconds. The use of whole-body x-ray machines allows emergen-cy room doctors and nurses, alsoreferred to as “sisters,” to continue


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providing critical care in urgent situa-tions.

Travel Risks as an ExpatriateExpatriates should take precau-

tions to protect themselves from

infectious diseases. The number oneinfectious disease in South Africa cur-rently is AIDS, and it continues tokill 1,000 people a day in SouthAfrica.

Expatriates also need to be cau-tious of general crime and scamsduring their assignment in SouthAfrica. The U.S. Department ofState reports that criminal activity,such as assault, armed robbery, andtheft, is particularly high in areas sur-rounding certain hotels and publictransportation centers, especially inmajor cities such as Johannesburg.ATM scams account for most of thepetty crimes in South Africa involv-ing either the machine “swallowing”your ATM card or a person offeringto “help” you at the machine. As anexpatriate, it is advised to use only

ATM machines in well-lit publicplaces, those attached to banks, ormachines that are attended by asecurity guard.

This material is provided for infor-mational purposes only. It is believedaccurate as of the date of publicationand is subject to change. Such materialshould not be relied on as legal, medi-cal, or tax advice. As always, we rec-ommend that you consult with yourindependent legal, medical, and/ortax advisors.

Michelle Colona is vice president of newbusiness, west region, for CIGNAInternational Expatriate Benefits, Houston,TX. She can be reached at +1 713 576 4330or e-mail [email protected].

Danielle Turner is senior new business manager for CIGNA International ExpatriateBenefits, Houston, TX. She can be reached at+1 713 576 4467 or [email protected].

devito1_MOBILITY 5/11/10 11:08 AM Page 8

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In response to the changingeconomy and real estate marketsover the years, industry practices

and employer mobility policies havecontinued to evolve—particularly inrelation to home purchase programs.This evolution of the industry, alongwith recent changes to the UniformStandards of Professional AppraisalPractice (USPAP), required that theWorldwide ERC® Appraisal TaskForce undertake a thorough reviewand revision of the Worldwide ERC®

Summary Appraisal Report to ensurethat the form continued to be a valu-able tool under all market conditions.

And, because USPAP standards setforth the minimum requirements tobe met by all state-licensed and certi-fied appraisers, a revision to theWorldwide ERC® form was necessaryto ensure that appraisers properlycompleting it would be in compli-ance with the standards.

Comprised of representatives fromthe appraiser community, the 2009/2010 Appraisal Task Force was ledby Jeffrey M. Barta, SCRP, Jeff BartaValuations, Inc., Waukesha, WI, andJay K. Delich, SCRP, SRA, IFA,Arizona Appraisal Team, LLC,Scottsdale, AZ. Members includedCraig Gilbert, CRP, SRA, CraigGilbert Appraisals, HuntingtonBeach, CA; Arnold M. Schwartz,

SCRP, SRA, Arnold M. Schwartz &Associates, Inc., Atlanta, GA; andAlvin (Chip) L. Wagner, III, SCRP,SRA, A. L. Wagner Appraisal Group,Inc., Naperville, IL.

In undertaking the form revision,the Appraisal Task Force focused onboth client and appraiser needs. Thegoals for the new form were to clarifyand ease review and interpretation ofthe report by clients, as well as toprovide appraisers with a moredirected approach to facilitate under-standing and increase reporting accu-racy.

Feedback from both clients andappraisers regarding recommendedchanges was collected electronicallyduring the spring and summer of2009, and through focus groups. Alldata were reviewed and carefully con-sidered before the group embarkedon the form revision.

Form revision began in Septem ber2009, during a series of conferencecalls and continued in October andNovember during two, two-daymeetings. The form was then beta-tested with both appraisers andclients during January 2010.Feedback from the beta-test wasreviewed and further changes to theform were made during late winter.

At the same time, the groupundertook the revision of the

Worldwide ERC® RelocationAppraisal Guide to reflect all themodifications made to the newWorldwide ERC® Summary AppraisalReport.

This article covers only the mostsignificant changes to the form. Thereader is advised to review the newWorldwide ERC® RelocationAppraisal Guide for a thoroughexplanation of the form, as well asstep-by-step instructions for its com-pletion.

Page 1Page 1 of the new report outlines

the intended use and purpose of therelocation appraisal, the scope ofwork, definitions of anticipated salesprice and forecasting, and the proce-dural guidelines in which appraiserscompleting the report should adhere.In addition, this page includes:

* Assignment Information;* Salient Facts and Conclusions;

and* Extraordinary Assumption.This page requires the appraiser to

report information about the assign-ment, as well as identify informationabout the subject property. In addi-tion, page 1 includes a section thatsummarizes the salient facts and con-clusions of the report. As in the past,this section is completed only after

B Y J A N H A T F I E L D - G O L D M A N

To best meet evolving industry needs, the Worldwide ERC® Appraisal Task Force recently revised

the Worldwide ERC® Summary Appraisal Report. Hatfield-Goldman reviews the significant changes.

T H E N E W W O R L D W I D E E R C ®

S U M M A R Y A P P R A I S A LR E P O R T

hatfield_goldman2_MOBILITY 5/12/10 3:33 PM Page 1


the entire report is finished. It isintended to provide the client with aquick overview of the appraiser’sfindings, as well as the value esti-mate.

The Salient Facts and Conclusionssynopsis has been expanded to incor-porate more summary information.However, there is one new andimportant element that has beenadded: the “assignment marketingperiod.”

The “assignment marketing peri-od” is the time period on which theappraiser is to base his or her opinionof value. Within the Definition ofAnticipated Sales Price under Point 4(also found on page 1 under theDefinitions and Guidelines section)this time period is identified as, “anassignment marketing period, not toexceed 120 days (or as instructed bythe client) commencing on the Dateof Value Opinion…” This is achange from the 2003 report. Userswill note the change from the use ofthe term “reasonable marketingtime” to “assignment marketing peri-od.”

In addition, the “as instructed bythe client” verbiage was added toclarify a practice (defining a timeperiod other than “not to exceed120 days,” such as “not to exceed90 days” or “not to exceed 180days”) that always has been accept-able according to instructions in the2001 Relocation Appraisal Guide.This line item is first reported onpage 5 under the ForecastingAnalysis sub-section of the MarketTrends Analysis and is repeated onpage 6 within the Anticipated SalesPrice section.

Within the Definition of Antici -pated Sales Price sub-section on page1, two more significant changes havebeen made (see Figure 1).

Point #1 refers to the subjectproperty’s appearance. The Defini -tion of Anticipated Sales Pricerequires that the analysis for develop-ing the anticipated sales price,“…reflect the subject property’sappearance “as is” (or as instructedby the client) and is based on its pre-sent use as a residential dwelling.” Inthe previous version of the form, the“or as instructed by the client” aspectof the definition was excluded.

Why has it now been added?Clients often ask appraisers to evalu-ate homes “as if vacant” versus “asis” for an upcoming assignment mar-keting period even though thehomes usually are occupied at thetime of inspection. This changeallows for clarification and confirma-tion that such a practice is acceptablewithin the Definition of AnticipatedSales Price and that it presents noviolation to the Uniformed Standardsof Professional Appraisal Practice(USPAP). This line item is firstreported on page 3 of the form with-in the Description of Improvementsand also included in the Salient Factsand Conclusions summary on page1.

One other change is found withinthe Definition of Anticipated SalesPrice under Point 4. This item reads,

“an assignment marketing period,not to exceed 120 days (or asinstructed by the client) and com-mencing on the Date of ValueOpinion, is allowed for exposure toin the open market. The analysisassumes an adequate time to marketthe subject property.”

In the past, the “date of appraisalinspection” had been used as theeffective date of the appraisal. In thenew form, the “date of value opin-ion” is now the effective date of theappraisal and may or may not be thesame as the “date of appraisal inspec-tion.” This change allows theappraiser to consider any pertinentinformation that becomes availablebetween the “date of appraisalinspection” and “date of value opin-ion” such as changes to the proper-ty’s listing price, the closing of apending sale, changes to the listingprices of competing properties,and/or changes in market or eco-nomic conditions. It is important tonote, however, that physical changesin the subject property are not to beconsidered for this purpose. In fact,this point is addressed within theExtraordinary Assumption, whichalso is new to the Worldwide ERC®

Summary Appraisal Report. The“date of value opinion” is reported

Definition of Anticipated Sales Price*: The price at which a property is anticipated to sell in a competitive and open market, assuming an arm's length transaction whereby: 1. The analysis reflects the subject property’s appearance "as is” (or as instructed by the client) and is based on its present use as a residential dwelling. (For new construction not completed see Guideline 1d.) 2. Both buyer and seller are typically motivated; both parties are well-informed or well- advised and acting in what they consider their best interests. 3. Payment is made in cash or its equivalent. 4. An assignment marketing period, not to exceed 120 days (or as instructed by the client) and commencing on the Date of Value Opinion, is allowed for exposure in the open market. The analysis assumes an adequate effort to market the subject property. 5. Forecasting must be applied to reflect the anticipated trend of market conditions and prices during the subject property's prospective marketing period.

D fi iti f F ti F ti i th f l i hi t i l t d

is ge and bath to th repo6. Rate ''goo to th desig prop defin � Ex fo � Go fo � Av

FIGURE 1



on pages 6 and 7 of the form whilethe “date of appraisal inspection” isonly found on page 7.

The new Extraordinary Assump -tion located within the Definitionsand Guidelines section on page 1(see Figure 2) states, “The Antici -pated Sales Price assumes that nophysical changes have occurred to thesubject property between the Date ofAppraisal Inspection and the Date ofValue Opinion.” The inclusion ofthis extraordinary assumption is aUSPAP requirement because theeffective date of the appraisal (“dateof value opinion”) may be differentfrom the “date of appraisal inspec-tion.” It is referred to on pages 6 and7 of the form as well.

Appraisers and clients should notethat no deviations from the defini-tions or the extraordinary assumptionfound on page 1 of the report areallowed.

Page 2The next page of the report asks

the appraiser to provide informationon the subject property itself alongwith information about the subjectproperty’s neighborhood and site.

There are two significant changeson this page. The first is the inclu-

sion of information regarding con-dominiums and cooperatives underthe Subject Information section.This information frequently isrequested by clients so the reportrevision presented the perfect oppor-tunity to add it to the form (seeFigure 3). It includes information onthe complex (i.e., name, number andpercent of owner-occupied units,number of floors, whether the com-plex is complete, marketabilityissues, and whether the builder/developer is in control of the HOA).

The second big change is an ele-ment within the Neighborhood sec-tion that asks the appraiser to definethe neighborhood boundaries. The“neighborhood boundaries” definethe physical area surrounding thesubject property, which has similarcharacteristics, influences, and com-plimentary land uses.

Page 3Page 3 contains the Description of

Improvements. Other than minorchanges, there are two importantadditions to bring to your attention.

The first is a new item that asks theappraiser to note if there is evidenceof any apparent modifications to thedwelling, such as additions or enclo-

sures. This was added to make clientsaware of any modification(s) thatmay have required a permit or thathave financing implications.

The second addition is found inthe Recommended Repairs and/orImprovements section. As in thepast, if the preparer indicates thatthere are recommended repairsand/or improvements, they areasked to list them and provide a totalestimated cost to cure. In addition,they now are asked to also indicatethe priority of those repairs and/orimprovements (i.e., low, high, orcritical) and comment regardingtheir effect on the marketability ofthe subject property. The addition isintended to help the client evaluatenot only the costs of the recom-mended repairs and improvements,but also what the effect would be ofchoosing to either do or not do therepairs and/or improvements.

For instance, if the repair and/orimprovement is minor and unlikelyto significantly affect the marketabili-ty of the subject property, then therating should be “low.” Examples ofthis type of situation might includesome minor exterior trim that needspainting or a room with a slightlystained carpet.

If, on the other hand, the repairand/or improvement being recom-mended is essential to the successfulmarketing of the subject property,then a rating of “critical” should beselected. Examples of this type of sit-

Zip Code: T Owner(s) of Record: S Unit: C Zip Code: A Appraiser File #: A Co-appraiser (if applicable): A

Zip Code: P Fax #: E-mail:

(p.6) A days (p.5) A (p.3) D (p.6) S (p.2) �

(p.3)

� square feet

� No (p.2) � None Observed (p.3) (p.3) (p.4) (p.4) (p.4) (p.4)

(p. 4) � Decreasing � Stable � Unstable

� In Balance � Over Supply

(p.5) � � Stable � Decreasing

Extraordinary Assumption: The Anticipated Sales Price assumes that no physical changes have occurred to the subject property between the Date of Appraisal Inspection and the Date of Value Opinion. The use of this assumption may affect the assignment results.

appeal for work in progress or suspects adverse physical conditions (notify the client immediately); and Anticipated Sales Price on the assumption that improvements will be completed in a workmanlike manner according to the Description of Improvements on Page 3 and any construction documentation provided to the appraiser).

2

area only. Basement significant contribution shown separately in the

Excellent: the amenity or characteristic is s found in competing properties and neighborhoods; Good: the amenity or characteristic is b found in competing properties and neighborhoods; Average: the amenity or characteristic is c characteristic found in competing properties and neighborhoods; Fair: the amenity or characteristic is n found in competing properties and neighborhoods; and Poor: the amenity or characteristic is c characteristic found in competing properties and neighborhoods. 7. Include the following exhibits: a) photos of the front, rear, street, and interior of the subject property; b) photos of the subject property depicting any adverse conditions and marketability either favorably or unfavorably; necessary to determine gross living area. Sketch should also show room comparable sales. 8

*Source: The Relocation Appraisal Guide by Worldwide ERC®

FIGURE 2

Client File #: Occupant: � Transferee � Tenant � Vacant �:

Unit: State: Zip Code:

L

Map Reference: Property Rights Appraised: � Fee Simple � Leasehold Subtype: � PUD � Condominium � Cooperative If condominium or cooperative, indicate complex name: Total No. of Units: No. of Owner-occupied Units: % of Owner-occupied Units: Total No. of Floors: Subject Floor #: Is the complex complete? � Yes � No Is market rate financing available? � Yes � No Is the developer/builder in control of the homeowners association? � Yes � No Are there any marketability issues? � Yes � No Comments:

Tax Year: Data Source: A � Yes � No Monthly HOA Fees: $ D

Date of Last Price Revision:

D Listing Company/Agent: Ph #: L Last Sale Price: $ A

� Yes � No

� Suburban � Rural B � 25% - 75% � Under 25% D � Stable � Slow C � Likely � Taking Place

P Commercial: %

M Industrial: % C :

to: $ Predominant Price: $ S years to years Predominant Age: years Predominant Occupancy: �

� Excellent � Good � Average � Fair � Poor D

Corner Lot: � Yes � No Street Maintenance: � Public � Private F � Yes (attach map) � No Gated: � Yes � No S

� Yes � No � No Zoning A

� Yes � No A � Yes � No S D

Other(Describe) E � G

� S �

T

� A � �

FIGURE 3

uation might include water damageor extensive deferred maintenance.

Pages 4 and 5Pages 4 and 5 contain the Market

Trends Analysis. It is on these twopages that the most significantchanges to the form have been made.

Although the forecasting adjust-ment is the final step in the SalesComparison Analysis grid on page 6of the report, the basis for thisadjustment is developed as an exten-sion of the entire market analysis.

The Market Trends Analysis is thefoundation for developing a credibleopinion of anticipated sales price.This expanded analysis (now beingreported on two pages instead ofone) focuses on historic, current, andforecasted market trends. It is onthese two pages that the appraiserwill report his or her analysis ofclosed sales, current listings, andpending sales that will set the stage

for both the “market change” and“forecasting adjustments” asked foron page 6 of the form in the SalesComparison Analysis grid.

Client and appraiser experiencewith the form indicated a need for amore guided approach for reportingthe analysis; hence, the new form hasbroken down the Market TrendsAnalysis into three distinct sections:Historic Trends, Current Factors,and Forecasted Trends. Page 4 con-tains the Historic Trends sectionalong with the first half of theCurrent Factors section, which con-tinues onto the first half of page 5.The last half of page 5 contains theForecasted Trends.

Historic Trends. This sectionbegins by asking the appraiser todefine the Market Segment beingused in the Market Trends Analysis.The defined market segment detailsthe search parameters used for col-lecting the data to be analyzed and

requires the appraiser to describe thecriteria being employed such as geo-graphic, municipal, price range, zipcode, subdivision, housing type,school district, and the like. In thissection, the appraiser selects the mostappropriate market segment based onthe buyer profile for the subject mar-ket. The market segment may be dif-ferent from the subject neighbor-hood addressed on page 2 of theform in that it could include otherareas beyond the subject property’sneighborhood in which the potentialbuyer may look for substitute proper-ties.

Within this Historic Trends sub-section is another new componentwhere the appraiser is asked to com-plete a Closed Sales Analysis (seeFigure 4). This is an important newitem and will provide the historicalanalysis of price trends relevant todeveloping the “market changeadjustment” in the Sales Comparison

Market Segment – Historic Price Trends: Provide a historical analysis of price trends relevant to developing the Market Change Adjustment in the Sales Comparison Analysis grid on page 6. Define each specific time period considered relevant to the analysis. Appropriate defined time periods may be expressed in monthly, quarterly, semi-annual, or annual increments. They also may be based on seasonal or year-over-year comparisons. For each time period calculate the equivalent No. of Months (e.g., January 1 – March 31 = 3 months). The Monthly Absorption Rate equals the Total No. of Closed Sales divided by the No. of Months, and represents the monthly average of closed sales during the Appraiser Defined Time Period. “Other” columns may be used at the appraiser’s discretion to provide additional data deemed relevant to the analysis (e.g., gross living area, price per square foot of living area, expired listings, etc.). Any other factors or analysis used in determining historic price trends should be discussed below. An unstable trend exists when irregular fluctuations in the marketplace are evident.

CLOSED SALES ANALYSIS Appraiser Defined

Time Period No. of Months

Total No. of Closed Sales

Monthly Absorption Rate

Sales Price � Mean � Median

Days on Market � Mean � Median

Other: _________ _________

Other: _________ _________

$ $ $ $ $ $ $ $

Historic Trends � Increasing � Decreasing � Stable � Unstable

� Increasing � Decreasing � Stable � Unstable





Analyze and discuss the above trends relevant to developing the Market Change Adjustment in the Sales Comparison Analysis grid on page 6. Discuss the relevance and reliability of the data and any other factors used to determine historic price trends – e.g., sale and resale data. KE

T TR

ENDS

ANA

LYSI

S

FIGURE 4



Analysis on page 6 of the form. Inthe past, this type of analysis oftenended up in an addendum to theform. By incorporating a reportingformat for it within the form itself,appraisers and clients are provided auniform way of developing andreviewing the data. However, thisformat is not intended to limit theappraiser’s ability to use additionalanalyses. Along with this Closed SalesAnalysis a narrative section has beenadded for the appraiser to discuss thehistoric price trends along with therelevancy and reliability of the report-ed data and any other factors used todetermine historic price trends.

Current Factors. Within theCurrent Factors sub-section on page4 of the 2010 form, the appraiseralso has been provided a new formatfor reporting data regarding currentactive listings and pending sales forthe defined market segment. In addi-tion, another section was added forreporting the absorption rate andinventory analysis for the market seg-ment. Again, by incorporating areporting format for these elementswithin the form itself, appraisers andclients are now presented with a con-sistent way of developing and review-ing the data. This part of the formalso includes a narrative section that

asks the appraiser to analyze and dis-cuss the data relevant to the currentsupply/demand in the subject prop-erty’s market segment (see Figure 5).

The Current Factors sub-section ofthe Market Trends Analysis continuesonto the first half of page 5 of theform. The appraiser will find anabbreviated Competing Propertiesgrid for the market segment on thispage.

Users of the form will note thatthe first change to the grid is thecombination of the “sale price” and“closing date” line items into oneline item called, “last sale date/price.” Another change users willnote is that the former “room count”line item is now simply called“rooms” and includes only bedroomand bath counts; total room counthas been removed.

A new addition to the grid is“GLA data source,” which is locateddirectly below the “gross living area”line item. This new item asks theappraiser to report the data sourcefor determining the GLA such asappraiser measurements, publicrecords, assessor records, MLS, andthe like.

Another new line item added tothis grid is the “comparative rating tosubject.” It is on this line that the

appraiser summarizes the overallcomparison of each competing prop-erty to the subject (i.e., superior,similar, inferior). These ratingsshould demonstrate how a potentialbuyer would view the competitivelistings in relation to the subjectproperty (see Figure 6).

As in the past, directly below theCompeting Properties grid are narra-tive sections the appraiser can use todiscuss relevant information relatedto the competing listings. However,the appraiser also now is asked toanswer a couple of questions for eachof the competing properties withintheir discussions:

1. Why was the property selected?2. What are the major differences

between the competing property andthe subject?

The answers to these questions arekey in helping the client evaluate thesubject property’s competitive posi-tion within the marketplace. Theresponses to these questions alsoshould support the ratings in the gridcomparing each property to the sub-ject.

At the end of the Current Factorssub-section on Page 5, the appraiseris to provide a competitive list pricerange for the subject property neces-sary to achieve a sale of that property

g g

CURRENT FACTORS

Market Segment – Current Listing Data: Report data regarding current active listings and pending sales for the defined market segment.

CURRENT LISTINGS

PENDING SALES

Total No. of Active Listings

List Price � Mean � Median


Other: _____________

Total No. of Pending Sales

List Price � Mean � Median


Other: ______________

$ $

Market Segment – Absorption Rate/Inventory Analysis: Based on the Closed Sales Analysis above, identify the time period which produces the most credible Absorption Rate. Divide the Total No. of Active Listings by the Monthly Absorption Rate to determine the estimated No. of Months Supply of Inventory.

Appraiser Defined Time Period No. of Months

Total No. of Closed Sales

Monthly Absorption Rate

Total No. of Active Listings (exclude pending sales)

No. of Months Supply of Inventory

Analyze and discuss the above data (consider seasonal influences, pending sales, expired/withdrawn listings, relevance and reliability of data, etc.) that pertains to current supply/demand in the subject property’s market segment.

FIGURE 5




within the assignment marketingperiod. However, the subject proper-ty is sometimes already listed for sale.To evaluate the pricing of the sub-ject, a new question was addeddirectly above the competitive listprice range field that asks the apprais-er to evaluate whether the subject is

“realistically” priced to sell within theassignment marketing period. Inaddition, the appraiser is asked toindicate which of the properties(including the subject if listed) ispositioned to sell first and why. Thisadditional information should sup-port the competitive list price range

and provide the client with additionalinsight regarding the properties.

Forecasted Trends. In the Fore -casted Trends sub-section of theMarket Trends Analysis, one will findthe marketing time informationincluding the “market segment nor-mal marketing time,” the “subject

y pp p Appraiser File #: Client File #:

CURRENT FACTORS Continued

Market Segment – Competing Properties: The Competing Properties Analysis is a key component to the relocation appraisal. Select properties that offer the strongest competition to the subject and would compete for the same potential purchaser. In selecting Competing Properties, emphasis should be placed on those properties with list prices that are most reflective of current market conditions.

Item Subject Property Competing Property #1 Competing Property #2 Competing Property #3 Address

Proximity to Subject Original List Price $ $ $ $ Current List Price $ $ $ $ Last Price Revision Date Days on Market Last Sale Date/Price /$ /$ /$ /$ Site Area Site Appeal Actual Age (Years) Condition Rooms Bdrms. Baths Bdrms. Baths Bdrms. Baths Bdrms. Baths Gross Living Area sq. ft. sq. ft. sq. ft. sq. ft. GLA Data Source Basement Area Car Storage

Significant Features

Comparative Rating to Subject � Superior � Similar � Inferior � Superior � Similar � Inferior � Superior � Similar � Inferior For each Competing Property, specifically discuss the following: 1) Why was the property selected? 2) What are the major differences between the property and the subject? Comments should support the Comparative Rating to Subject above. Competing Property #1: Competing Property #2: Competing Property #3: Is the subject property realistically priced to sell within the assignment marketing period? � Yes � No � Not listed

Identify which competing property is positioned to sell first and why. Include the subject property, if listed. Provide support for the competitive list price range below.

Competitive List Price Range for Subject Property (to achieve a sale within the Assignment Marketing Period):$ to $

FORECASTED TRENDSMAR

KET

TREN

DS A

NALY

SIS

FIGURE 6



property’s estimated normal market-ing time,” and the “assignment mar-keting period” line items (alreadydiscussed under page 1).There also is a forecasted trends

and analysis section that includes lineitems for “forecasted sales activity”and “forecasted price trend.” What isnew in this section is an additionalline item for identifying the “pace”of the forecasted price trend—if it isincreasing or decreasing, the apprais-er is asked to indicate if the trend willcontinue at the current pace, a decel-erated pace, or an accelerated pace.The appraiser then is asked to dis-

cuss in a narrative the overall historictrends and the current factors analysesfrom pages 4 and 5 of the form alongwith any additional pertinent data rel-evant to developing the forecastingadjustment on page 6. They then areto analyze the anticipated trend ofmarket conditions and prices duringthe subject’s upcoming assignmentmarketing period considering factorssuch as the mood of the market, sea-sonal market trends, economic andemployment shifts, demographic

trends, buyer profile, and the like.This is similar to the previous form.What is new is that the appraiser thenis asked to indicate, based on thisanalysis, the type of forecastingadjustment that will be required onpage 6 of the form: positive, negative,or zero.* This then translates to aspecific dollar adjustment on page 6.

Page 6Page 6 of the form contains the

Sales Comparison Analysis and theAnticipated Sales Price sections. The major objective of this page

continues to be to report an analysisof comparable sales in relation to thesubject property. This analysisincludes making adjustments to thecomparables’ sales prices based onthe contributory value of features dif-ferent from the subject property.New and modified line items in

the marketing history portion of thegrid include the “original list price,”“original sales-to-list price ratio,”“current and final list price,” “finalsales-to-list price ratio,” and “last saledate/price” (see Figure 7).

By providing the original and cur-rent/final list price of the subjectproperty (if applicable) and compara-bles, the appraiser will be able toindicate each one’s sales-to-list-priceratio. A low sales-to-list price ratioindicates that a buyer’s market mayexist and that sellers are acceptinglower offers. A high sales-to-list priceratio generally reflects a seller’s mar-ket and is a key indicator that sellersare negotiating less and buyers arewilling to pay closer to full askingprice. The original sales-to-list priceratio may indicate whether a propertywas initially over priced.“Financing type” is a new line

item. To complete this line item,appraisers are asked to enter the typeof financing (conventional, FHA,VA, cash, seller, etc.). In addition,“data verification sources” and “con-cessions” are line items that weremodified from the 2003 form andreplace the “data source” and “salesand/or financing concessions” lineitems. These items either were addedor modified to allow for enhanceddata reporting.

Client File #:

Item Subject Property Comparable Sale #1 Comparable Sale #2 Comparable Sale #3 Address

Proximity to Subject Original List Price $ $ $ Orig. Sales-to-list Price Ratio % % % Current & Final List Price $ $ $ Final Sales-to-list Price Ratio SCA:8 % % % Sales Price $ $ $ Closing Date Days on Market Last Sale Date/Price /$ /$ /$ /$ Data Verification Sources Description Description +(-)$

Adjustment Description +(-)$ Adjustment Description +(-)$

Adjustment Financing Type Concessions Market Change Adjustment* Date of Value Opinion

Contract Date Contract Date Contract Date

Neighborhood Appeal

Bdrms. Bdrms. Bdrms. Baths Baths Baths

sq. ft sq. ft sq. ft sq. ft

B

days

� Minus

This adjustment is

u

� No If yes, comment:

C to $ A � Not to exceed 120 days � Client instruction: Not to exceed days S � “as is” � Client instruction:

i (Date of Value Opinion) (

FIGURE 7

* The Appraisal Task Force has made improvements to the Summary Appraisal Report since the publication of this article in the print edition of MOBILITY. To reflect this final version, wording in this article has been updated.


As in the Competing Propertiessection on page 5, the “rooms” lineitem has been changed on page 6 aswell to include only bedroom andbath counts; total room count hasbeen removed.

Instructional footnotes for the pre-parer also have been added to thegrid regarding the “market changeadjustment” and the “forecastingadjustment.”

Finally, the Anticipated Sales Pricesection has been revised and includesnot only the “anticipated sales price”and “date of value opinion,” but alsorepeats pertinent information pulledfrom other sections of the report.Most importantly, information aboutthe subject property’s current listprice and competitive list price rangeare repeated and allow the appraiser a

final opportunity to review his or hervalue opinion in comparison to thesubject property’s actual list priceand competitive list price range (seeFigure 8).

Page 7This page also has changed and

has been retitled: Statement ofLimiting Conditions, ExtraordinaryAssumption, and Appraiser Certifi -cation. Three significant changes/additions have been made to thispage.

The first is a modification to Point#10 under the Contingent andLimiting Conditions sub-section.On the previous version of the form,this point used to indicate that theeffective date of the appraisal wascontemporaneous with the date of

the appraisal. Now that the “date ofvalue opinion” is the effective dateand may differ from the “date ofappraisal inspection,” Point #10 hasbeen revised to say, “for the purposeof this appraisal, the effective date ofthe appraisal is the Date of ValueOpinion. This allows the appraiser toconsider pertinent information avail-able between the Date of AppraisalInspection and the Date of ValueOpinion.”

The second change is that theextraordinary assumption found onpage 1 of the report has been repeat-ed on page 7 to emphasize that theanticipated sales price assumes nophysical changes have occurredbetween the “date of value opinion”and the “date of appraisal inspec-tion.” It should be noted again that

Is the Subject Property currently listed? � Yes � No Current List Price: $ Competitive List Price Range for Subject Property (to achieve a sale within the Assignment Marketing Period): $ to $ Assignment Marketing Period: � Not to exceed 120 days � Client instruction: Not to exceed days Subject Property’s Appearance: � “as is” � Client instruction:

Opinion of Anticipated Sales Price as of is $ (Date of Value Opinion) (Based on the Extraordinary Assumption on page 1 of this report.)

ANTI

CIPA

TED

SALE

S PR

ICE

Transferee: Appraiser:

FIGURE 8

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no deviation from the extraordinaryassumption is allowed on the World -wide ERC® Summary AppraisalReport.

Last, a new sub-section has beenadded, called “Additional Contin -gent and Limiting Conditions,Certifications and Comments.” Thisnew narrative field allows the apprais-er to list any additional limiting con-ditions, additional certificationsrequired by state licensing, and/ormembership in professional appraisalorganizations. It also allows theappraiser to address any otherUSPAP requirements.

ConclusionThe 2010 redesign of the form

reflects both client and appraiser rec-ommendations and an intense year’sworth of work by the Appraisal TaskForce.

There were items suggested thatthe Appraisal Task Force consideredbut determined did not warrantinclusion in the form revision. Mostimportant, the following two itemswere not included:

1. the option of an opinion ofvalue that excluded forecasting; and

2. the inclusion of adjustments inthe Competing Properties grid.

Regarding the first item, based onthe Definition of Anticipated SalesPrice, the value opinion generatedby the Worldwide ERC® SummaryAppraisal Report (anticipated salesprice) requires forecasting. It is notan option. This forecasting compo-nent is one of the defining featuresof anticipated sales price and therelocation appraisal. Through yearsof use and development, anticipatedsales price has been established asthe appropriate opinion of value forrelocation appraisals. In addition,the Worldwide ERC® definition of

anticipated sales price is recognizedby the Appraisal Foundation(USPAP Advisory Opinion 22). Avalue opinion developed in theWorldwide ERC® SummaryAppraisal Report that does notinclude forecasting is, by definition,not anticipated sales price and,therefore, inappropriate to use with-in the context of a relocationappraisal.

The Appraisal Task Force also dis-cussed whether to add adjustmentsto the listings in the CompetingProperties grid on page 5 of thereport. Similar to the previous taskforce that completed the 2001 revi-sion, the group reconfirmed its posi-tion that including adjustments inthe Competing Properties grid con-tinues to be inappropriate. The rea-son is that while sometimes useful indemonstrating the principle of sub-stitution (meaning that a typicalpotential buyer of the subject prop-erty would pay no more than thecost of acquiring and equally desir-able substitute property), the adjust-ment of listings often producesinconclusive results because of thedifficulties in determining whetherthe listings are properly priced. Assuch, adjustments to the competingproperties do not produce credibleresults in a consistent enough man-ner to warrant inclusion in thereport.

To learn more about theWorldwide ERC® SummaryAppraisal Report and to purchaseyour own copy of the 2010 editionof the Worldwide ERC® RelocationAppraisal Guide, visit our website atwww.WorldwideERC.org.

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Analyzing the Perfect Storm: the Present State of the Movingand Storage Industry

B Y E R I C R E E D , C R P, G M S

The moving and storage industry is experiencing a

number of unfavorable circumstances that have

converged to create “the perfect storm” from a business

perspective. Reed analyzes the issues that have lead

to the current situation by drawing on views from

economic and demographic experts as well as notable

industry leaders.

reed21_MOBILITY 5/10/10 1:37 PM Page 2


“The Perfect Storm” is “anexpression that describes an event where a rare combina-tion of circumstances will aggravate a situation drastical-ly.” When most people hear the expression, they think ofthe popular movie by the same name that was released inJune 2000. The movie was based on the true story of aswordfishing boat called the Andrea Gail and its crew ofsix who were lost at sea during a massive storm that hitthe East Coast in October 1991.

David Valle of The National Weather Service describedthe storm as the result of three separate weather systemscoming together with deadly consequences. The stormcreated sustained winds of up to 60 miles per hour andwaves of up to 75 feet in height, leaving “extensive andwidespread” damage along the Atlantic seaboard.

Analyzing the Perfect StormThe moving and storage industry is experiencing a

number of unfavorable circumstances that have con-verged to create “the perfect storm.” Based on the mostrecent mobility statistics from the United States CensusBureau, only 11.9 percent of the U.S. population relocat-ed from March 2007 to March 2008. This was the lowestrate recorded since the government began tracking thistrend in the late 1940s. The historically low trend report-

edly continued during 2008 and 2009, when long dis-tance moving in particular remained stagnant. Whatcaused this significant decline in the U.S. mobility rate?

A Significant DeclineOn January 10, 2010, the New York Times posted a

blog on its website, “A Nation of Hunkered-downHomebodies.” Several noted experts participated in theblog and provided their opinions (based on research andexperience) as to what factors led to the U.S. decline inmobility rates. The blog provides interesting insight intowhat became “the perfect storm” for the moving andstorage industry.

Lawrence F. Katz, a professor of economics atHarvard University, attributes the decline in mobility dur-ing the last two decades to four converging factors. Thefirst is “the natural consequences of the aging of babyboomers.” Mobility rates tend to decline as individualsgrow older. Baby boomers make up a significant portionof the population and now are between the ages of 46and 64. Therefore, Katz’ says the aging of this segment ofthe population has reduced, and will continue to reduce,overall mobility rates. Katz also attributes the decline inmobility rates to falling home prices where homeownersare “locked in” to their homes because of negative equity



that reduces mobility rates, particu-larly in distressed regions of thecountry. The third reason he givesfor the decline is the subprime crisis,which created “economic distress intypically fast-growing areas such asFlorida, California, and Nevada, fur-ther slowing labor mobility toexpanding regions that ordinarilydrive U.S. job recoveries.” Andfourth, the lingering credit marketthat affects the creation of jobs in“economically vibrant locales” result-ing in slower labor mobility.

Peter Francese, founder ofAmerican Demographics magazineand a demographic trend analyst,says there are two “structural rea-sons” why fewer people move: anaging population and the growth ofdual-career families. He states, “peo-ple in those groups are in their primeworking years, they have kids in localschools, and have for the most partput down roots in their communi-ties.”

It is noted that dual-career couplesand families make up approximatelyone-half of all marriages, whichmakes it “next to impossible” tomove when one spouse is offered abetter job out-of-area. Francesebelieves that individuals in their 20sor early 30s are less likely to haveformed community bonds and aremore likely to relocate. The goodnews is that Generations X and Y,who now are roughly between 15and 34 years old, outnumber theBaby Boomer generation. Francesepredicts that when the recession isover, “…millions of them will moveanywhere there’s a hot job market.”

Richard Florida is director of theMartin Prosperity Institute at theUniversity of Toronto. Like Katz andmany of the other experts, Floridasays the housing market is a big fac-

tor in the country’s reduced mobili-ty: “the popping of the housing bub-ble has left millions of Americansunable to sell their houses, underwa-ter on their mortgages, and stuck intheir homes.” He also notes theeffect of reduced workforce mobilityon the economy: “the mobility slow-down clearly hurts both individualsby limiting their ability to pursueeconomic opportunities and theeconomy as a whole by limiting itsflexibility in matching workers tojobs.”

While many of these factors haveconverged to create the current slow-down in relocation activity, it is use-ful to explore what effect these issuesare having on the moving and stor-age industry from the perspective ofvarious industry leaders.

Views From Industry Leaders To gain insight on the present

state of the moving and storageindustry, I interviewed five industryleaders. My goal was to take a cross-section of individuals from differentorganizations of different sizes andinterests to gain a balanced, industry-wide perspective. The following is asummary of what each of these lead-ers had to say:

Linda Bauer Darr is presidentand CEO of the American Moving &Storage Association (AMSA), basedin Alexandria, VA. AMSA is thenational trade association for the pro-fessional moving industry. BauerDarr says one of the primary chal-lenges facing the industry today isthe loss of business because of thedownturn in the housing market. Shestates that, “…there are a lot of dis-tressed sales, a glut of unsold homes,and very few new home sales… untilmore people are in their jobs andfeeling secure about their own per-

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sonal futures, they’re not going tobuy homes or move as often.”

Her other concern is a loss of mar-ket share within the industry to whatis often referred to as “rogue mov -ers.” Rogue movers are unethicalmovers who come into the industrywithout the appropriate movingauthorities, insurance, and movingexperience. Bauer Darr states that,“they cheat consumers, raise expecta-tions, and then deliver very little.Sometimes they even hold the cus-tomer’s household goods hostage!”Bauer Darr’s concern is that they aretaking business away from profes-sional movers and giving a “blackeye” to the moving and storageindustry. To overcome this challenge,AMSA has developed a professionalmover certification program calledProMover. To receive the ProMovercertification, a moving company mustpass a background check, meet sever-al rigid requirements, and complete asignatory agreement stating they willuphold the AMSA code of ethics. As

Bauer Darr sees it, “we hope that theProMover certification will becomethe future standard for consumerswho are choosing a mover. Beforeanyone chooses a mover they have tofeel safe.” She equates the ProMovercertification to that of the REAL-TOR® certification in the real estateindustry where consumers can feelcomfortable they are dealing with atrue industry professional.

Bauer Darr says that opportunitiesstill exist for professional movers will-ing to diversify in today’s economicenvironment. “Companies need todecide how they are going to offermore choices to the consumer.Consumers don’t always want to gowith the top-of-the-line ‘soup tonuts’ move. Sometimes they want amix of services that, in the past, havenot even been considered part of aprofessional move.” She offeredexamples of these “mix of services”as: containerized moving, labor tohelp load and unload containers, andrenting a self-moving rental truck.She admitted that integrating theseservices may not be easy, saying, “…Ithink that the challenge for moverswill be to fit those options into theirtraditional business model and makeit successful.”

Mike Wolfe is president of AlliedVan Lines and northAmerican VanLines based in Westmont, IL. Hesays the two primary economic chal-lenges in the industry today are thedifficult economy and the housingmarket. According to Wolfe, “thedrastic fall in home prices is a uniquestorm that the industry does not havesignificant experience in weathering.Transferees that are in a loss positionon their homes have a significant bar-rier to moving.” Wolfe says theindustry needs to stay in touch withconsumer’s changing needs. He also

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“…there are a lot of distressed sales, a glut ofunsold homes, and veryfew new home sales…

until more people are intheir jobs and

feeling secure about theirown

personal futures, they’renot going to buy homes

or move as often.”

Linda Bauer Darr, president and

CEO of the American Moving &

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says that the industry’s current over-capacity of driver’s and trucks hasresulted in additional pricing pres-sures. However, “this dynamic hasthe potential of ‘whip-sawing’ in theopposite direction as the marketreturns to normal, and the industrycould be faced with a significantshortage of drivers.”

Wolfe states that in today’s envi-ronment, “companies that haveunique ways to help customers man-age through the new pitfalls that cor-porations face during the relocationprocess will be able to differentiatethemselves. Service providers that canbring innovative solutions to controlcosts will be able to improve theirposition in the marketplace.”

Glen E. Dunkerson is chairmanand CEO of Atlas Worldwide andAtlas Van Lines based in Evansville,IN. Dunkerson believes that the eco-nomic recession really has caused theindustry to be in a “depression” forlonger than a year because of variousfactors like housing and labor. Hewent on to state that some con-sumers are asking moving companiesto succumb to unrealistic expecta-tions to do business with them, whilemoving companies continue toreduce their costs and price to sur-vive, adding, “we are such a service-focused industry. We don’t manufac-ture anything, you can’t modernize aprocess in terms of getting a newmachine to improve efficiency—it’sall about people… you can only cutso far before you start impacting yourcustomers. That’s the fine line ourindustry has to recognize. How fardo you cut until you have ultimatelyimpacted the level of your service?”

Dunkerson also is concerned that“non asset” based moving brokersthat promote themselves through theInternet are affecting the industry’s

market share, saying, “these (movingbrokers) are coming in and re-sellingour services with slick websites andnice marketing campaigns… I’m nottalking about relocation companies…I believe the ‘ true broker’ of our ser-vice is a concern to me and I knowto some of my peers.”

When asked if new opportunitiesexist in the market today for profes-sional moving companies, Dunker -son says there is a huge untappedmarket in the “do-it-yourself seg-ment.” He explains that the currentperception is that the self-moveoption is much cheaper than the full-service move option. However, hepoints out that, “the consumer needsto start comparing the ‘true’ cost ofthese two moving methods. If theydo, I think they’ll be surprised.”Dunkerson suggests that the “truecost” of self moving should include:truck rental, equipment rental, fuel,time, and potential problems. “Whenyou compare the two services‘apples-to-apples,’ they are prettydarn close in cost and you get somuch more in the full-service move,”he says.

Donald Hill is president andCOO for Alexander’s MobilityServices based in Tustin, CA.Alexander’s is a multi-location agentwith Atlas Van Lines. Hill says theindustry is seeing a “shrinking mar-ket” because of the economic down-turn, a declining job market, thesluggish housing market, andchanges in employee relocation.

Hill explains that, “fewer corpora-tions are offering home buy-outoptions, which makes it more diffi-cult for employees to sell their homesand move to their next job. As aresult, we’re seeing smaller, non-homeowner moves.” Hill has seenthe average size of a move drop fromapproximately 14,000 pounds to9,000 pounds. At the same time, healso is seeing an increase in the popu-larity of “lump-sum” moving bene-fits among corporations, which hashad an effect on his company: “for acompany like ours, who doesn’t dealin the ‘C.O.D. world’ (individualconsumer private moves), that bringson new economic challenges. Weneed to know how to sell and bemore competitive in that market,adopting more of an ‘inside sales’approach rather than the way wehave always sold in the past. Thatleads to additional costs at a timethat we really can’t afford additionalcosts,” he said.

In addition to the industry’s currentovercapacity, which has resulted in a“downward pressure on pricing,” Hillalso sees a trend toward the “com-moditization” of professional movingservices. As he explains it, “we’re nolonger seen as a specialty-type service,but rather something you can buy onany street corner… we have continuedto lower our prices and allowed RFPauctions and competitive ‘bid boards’to treat our service like a commodity

“buying a service is not like buying a book.When you buy a bookthere are 10 millionbooks just like it outthere. Unfortunately

many consumers have lost sight of that.”

Kirk Jensen, president of

Jensen Relocation


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rather then the specialty service that ittruly is.”

Like other industry leaders, Hillbelieves that opportunities exist intoday’s market for those companieswilling to diversify. He suggestsdiversifying into areas such as,“…product distribution, logistics, or

FF&E (furniture, fixtures, and equip-ment) business as well as projectmanagement in these fields.”

Hill went on to say that companiesalso could expand their opportunitiesby investing in technology thatenhances the efficiency of their ser-vice delivery.

Kirk Jensen is president of JensenRelocation based in Lawndale, CA.Jensen is a single-location agent withAllied Van Lines. Jensen said thatone challenge in today’s environmentis overcoming the perception thatfull-service moving is “too costly.”Jensen states that, “buyers see a largedollar amount for a large move andthey’re surprised by it. But once youdivide up that ‘pie,’ there’s not a lotof money left over for profit.”

While profitability continues to fall,the cost of doing business continuesto rise. Jensen said another challengeis the buying behavior of youngerconsumers. He explains that theseconsumers tend to select movingcompanies over the Internet basedonly on the lowest price without con-sidering the differences in the qualityof service. Like Hill, Jensen says thatprofessional moving services are being“commoditized” by this type of buy-ing behavior. Jensen went on to say,“buying a service is not like buying abook. When you buy a book there are10 million books just like it out there.Unfortunately many consumers havelost sight of that.”

Jensen has seen the decline in cor-porate employee relocations affect hisbusiness. He says that larger movingagents attract corporate business bypromoting multiple locations andlarger fleets, “that makes it difficultfor smaller players like us to com-pete. To survive, I think smallercompanies will need to find areasthey can specialize in.”

Summarizing the IssuesIt is clear, through these leader

interviews and expert opinions, thatthe industry was hit hard by the eco-nomic recession and the depressedhousing market. Corporations havepulled back on their employee relo-

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cation benefits, reducing both thenumber of moves as well as the sizeof their shipments. Overcapacity inthe industry is driving prices andprofitability down while industryexpenses continue to rise. Mobilityhas decreased and should continue todecrease among the “baby-boomer”generation. Further competitive chal-lenges also have taken their toll onthe industry from Internet brokers toalternative moving services. Unscru -pulous movers are finding it easier to“dupe” unsuspecting consumersthrough the Internet, taking marketshare from legitimate movers andgiving the industry a poor image.Professional moving services areincreasingly viewed as a commodityby corporations and consumers as aresult of Internet buying habits, RFPauctions, and competitive “bidboards.”

Moving ForwardNew opportunities still exist in the

industry for those companies willingto diversify their service offerings.Companies may choose to adaptrather than compete with alternativemoving services that have erodedtheir market share in the past.Perhaps professional movers canreclaim a portion of the “self-move”market by educating consumers onthe “total cost of ownership” whencomparing a self-move to a profes-sional move. Professional movers alsoshould continue to search and devel-op technological enhancements thatimprove efficiency and service deliv-ery. Smaller moving agents may findnew opportunities through special-ization of service.

Clearing SkiesThe only thing that is certain in

this present environment is that mov-

ing companies no longer can operateas if it were “business as usual.” Asthe industry begins to emerge from“the perfect storm,” those companiesthat are willing to change and adaptwill survive and thrive. Perhaps thelessons learned from the presentexperience will lead to industry-wide

improvements that will secure abrighter future for the moving andstorage industry.

Eric Reed, CRP, GMS, is director of business development for Berger/Allied,Fullerton, CA. He can be reached at +1 714449 6671 or e-mail [email protected] interviews with industry leaders can beviewed at www.ericreed-online.com.

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Afghanistan

harris1_MOBILITY 5/10/10 2:59 PM Page 2


A fghanistan is a large, landlocked country located in the southeastern section of theAsian continent. It is bordered by six countries: Iran to the west, Turkmenistan tothe northwest, Uzbekistan to the north, China and Tajikistan to the northeast, and

Pakistan to the east and south.This country of almost 29 million is populated by distinct peoples, the largest group of

which is the Pashtun. Tajiks, Hazaris, and Uzbeks are the other main ethnic groups. Anancient land, the capital city of Kabul is believed to be nearly 4,000 years old, although inde-pendence came to the country only in 1747.

B Y E L L E N H A R R I S , G M S , A N D G R E G F O R G R A V E

Afghanistan is sure to conjure images in any individual who hears the name, but whatis really known about this Asian country? Harris and Forgrave take a closer look.


Slightly smaller than Texas andextremely mountainous, Afghan -istan’s highest point (7,500 m) is inthe Hindu Kush, a northeasternrange. Kabul, the capital, is locatedin the northeast. Other major citiesinclude Kandahar, Jalalabad, Herat,and Mazar-i-Sharif.

Its strategic location between Asiaand the Middle East affords Afghan -istan an importance that can beeither beneficial or destructive.Outside forces have influencedAfghanistan throughout its history.These include Alexander the Great,Persians, Genghis Khan, and, in amore recent millennium, Britain andthe Soviet Union, whose invasion in1979 launched a 10-year war that leftmuch damage in its wake. The resultsof this and other wars are what bringmany foreigners to Afghanistan inthe present day: reconstruction andhumanitarian efforts.

International aid has been criticalto the country’s reconstruction ef -forts, which so far include restorationof about 2,350 km of circular roads.But many challenges face the countryas it struggles to achieve reliable life-and health-sustaining staples for itspeople on which a stronger and morepromising future can be built.

Currently, there are foreignersworking on reconstruction projects inthe country, as well as those fromhumanitarian aid organizations. Strictsecurity procedures do not alwaysguarantee safety for newcomers, asterrorist forces seek to derail the goalsof peace and stability and the Talibanflexes its muscles again. Newcomersshould be cautious, and stay in con-tact with their employers and home-country embassy or consulates for thelatest security news and procedures.

Afghanistan’s years of war haveplaced a heavy burden on its econo-

my. Major sectors are services (43percent) and agriculture (31 per-cent), although the climate is semi-arid and little more than 12 percentof the land is arable. Nevertheless, 80percent of the workforce is engagedin agrarian pursuits. Current unem-ployment figures are difficult tosecure; it was about 35 percent in2008.

Insurgency and an unstable gov-ernment plagued by corruption haveposed challenges to an already strug-gling economy. The billions of dol-lars of international aid pledged tothe country have yet to bring muchimprovement to the lives of mostAfghans. Another issue is the verylucrative opium trade, which gener-ates an estimated US$3 billion fromlocal poppy fields.

Afghanistan’s official languages arePashto and Dari. The latter is usedmost frequently in business and gov-ernment.

Reconstruction workers and inter-national aid organizations typicallyfind themselves working amonggroups that speak other languages.English and German are the Westernlanguages most often spoken byAfghans, though these still are notwidely spoken.

KabulAfghanistan’s capital, Kabul, is

home base for most internationalassignees. The city’s 5th centuryinhabitants built a protective wall,parts of which still stand today.

Most of the city lies northwest ofthe river, in a basin formed by theHindu Kush mountain range onthree sides.

Many of Kabul’s structures—bothpublic and private buildings—havebeen destroyed by war; some sourcesestimate up to 40 percent of the city




has sustained damage. The cityscapeis low-rise, with a concentrated gridof streets centered around Shahr-i-Naw Park.

Strands of the country’s rich ethnicfabric are evident throughout Kabul;Pashtuns, Hazaras, Tajiks, Uzbeksmake up the city’s population ofroughly five million.

A development project called “Cityof Light” has been outlined and pre-sented to the president. It wouldinclude a mix of residential and com-mercial properties, medical facilities,and recreational venues.

Climate, Banking, and HousingAfghanistan’s climate is dry.

Temperatures vary significantlybetween the mountains and low-lands. January is the coldest month

in Kabul, averaging -8°C and 5°C.Temperatures can reach 40°C in Julyand August.

Afghanistan’s currency is called theAfghani (AFN). A new (second)Afghani has been in circulation sinceJanuary 2003. U.S. dollars andPakistani rupees also are used in dailytransactions. The central bank, DaAfghanistan Bank, is based in Kabuland has nearly 20 branches there andin other locations.

Services offered locally include cur-rent accounts and savings accounts(in various currencies), Internetbanking, debit cards, credit cards,loans, and fund transfers. Some banksoffer accounts that follow the princi-ples of Sharia (Islamic law). ATMscan be found in Afghanistan’s majorcities. Afghanistan International Bank

accepts international credit cards atits ATMs.

Local banks do issue credit anddebit cards, but their use is very lim-ited in Afghanistan.

Given the tenuous state of securityin Afghanistan, employees relocatingthere rely on support in findingsecure housing accommodations, aswell as company-recommended orsupplied transport to and from thework site.

Some assignees in Afghanistan willlive in housing that employs staff tohandle cooking and cleaning, in addi-tion to—in many cases—a full securi-ty detail.

With the majority of relocations toAfghanistan originating from compa-nies with military and developmentcontracts, these assignees tend to


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reside on large military bases or insizable Afghan mansions.

Health Care, Security, andCommunication

Health care facilities favored byforeigners in Kabul include the DKGerman Medical Diagnostic Center,ACOMET Family Hospital, andCURE International Hospital. Publichealth facilities should be avoided.

In Kandahar, the InternationalCommittee of the Red Cross (ICRC)operates the Mirwais Hospital, a government hospital renovated toaccept war-wounded individuals fortreatment.

Foreigners working in Afghanistanrequire a heightened level of alert-ness at all times. Keep a low profile.Do not adhere to a predictableschedule; rather, vary your departureand arrival times and routes. Knowthe addresses for police stations andhospitals, and emergency telephonenumbers. Any vehicles parked at theresidence should be locked and novaluables should be kept inside.

Avoid public transportation andareas where demonstrations takeplace. Always carry a phone or othercommunication device with you.Monitor local conditions closely, and

watch for update messages from yourembassy.

Travel through areas outside ofcities can be dangerous, with isolatedroads and poor cell phone coverageenhancing that danger.

The Afghan National Police(ANP) has grown greatly in size andsophistication since 2001.Checkpoints are scattered randomlythroughout Kabul and foreignersshould carry their passports (or acopy) and a valid ID that confirmstheir employer and the reason forbeing in the country. Foreign visitorsand expatriates should expect a cer-tain amount of disruption to theirdaily travel schedules and routines, ascheckpoint locations change daily,and the amount of time one spendspassing through a checkpoint alsowill vary. Some basic ability in Dariand/or Pashto is useful when com-municating with the ANP and localsecurity forces.

In places like Afghanistan wheredaily life can be unpredictable andconnections to family friends outsidethe country are important, Internetcan be a life-saver—or at least serveas a vital tool. VSAT satellite pro-vides reliable Internet service inAfghanistan.

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Land lines are highly unreliablebecause of war damage and instabili-ty. Mobile phones are the norm inAfghanistan. They are very impor-tant, as it is vital to have a method ofcommunication when traveling any-where within the city, or in and outof the country.

Mobile phone service is reliable inKabul, with four networks in opera-tion: Roshan, Afghan Wire lessCommunications Company, MTN,and Etisalat.

Doing Business Local business partners can help

newcomers navigate Afghan govern-ment rules and regulations, which areconstantly changing and developing.

As Afghanistan is a Muslim coun-try, care should be taken to observethe local laws and customs governedby religion. Activities and fastingduring Ramadan may affect businessschedules.

When gathering socially or forbusiness, note that alcohol is prohib-ited (although available in Kabul), asis eating pork. The work week isSunday to Thursday.

Afghans favor an indirect style ofcommunication. In the interest ofrespect and honor, they will avoid adirect “no;” you will need to readcontextual elements like body lan-guage and phrases that represent acircuitous route to the core meaning.

Handshakes are appropriate atmeetings. Business cards may beexchanged, although they are not ascommon for Afghans as for othercultures. For ease, foreign business-people might have their cards trans-lated into Pashto or Dari on oneside.

Relationships are very important,and time should be invested in build-ing rapport and trust. Meetings do

not tend to be strictly scheduled and,despite an agenda, may veer fromthese items in tangential directions.It is all part of building the relation-ship necessary to accomplish businessgoals.

With that in mind, newcomersshould keep the concepts of honorand respect in mind, and avoid anybehavior that could be construed asimpatient, demanding, or conde-scending.

Given the security issues in thecountry, and the need for care intravel to meetings and elsewhere,allow plenty of time to arrive.

Afghans have a more relaxed atti-tude toward time than some othercultures, but you should plan to bepunctual and get in touch if you aredelayed.

There have been some positivedevelopments in both municipal andcommercial infrastructure in Kabulsince 2001: well-run, comfortablefive-star hotels, Western restaurants,health clubs, and coffeehouses allsuited to, and frequented by, theinternational community. Kabul hasa very large international communi-ty, and expatriates generally will findthat expanding their social and pro-fessional networks will happen quick-ly and with minimal effort.

Ellen Harris, GMS, is the international product director for Living Abroad, LLC,Norwalk, CT. She can be reached at +1 203221 1997 ext. 113, or [email protected].

Greg Forgrave is a regional manager for Move One Logistics and is based in Kabul,Afghanistan, and Dubai, United Arab Emirates.He can be reached at +971 4 299 3006 or e-mail [email protected].


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IsraelW H E R E C U L T U R E S C O L L I D E

Israel certainly is unique. The sea, sun,sand, international atmosphere, and hipgathering places are juxtapositionedagainst ancient cultures, religions, andholy places. Multi-lingual and multi-faceted Israel is a melting pot of ideas

that makes it a complicated place in which tomove. Many start-up companies, especially in thefields of scientific research and development, med-ical instruments, and computer science, are pur-chased each year by venture capitalists to be devel-oped further within Israel or by Israeli nationalsabroad.

More than 82 percent of the population isJewish, and the remaining 18 percent consists ofArabs, the majority of whom are Muslim. MostIsraelis live in metropolitan areas, concentratedaround Jerusalem, Tel-Aviv-Yafo, and Haifa.

It is estimated that Jews from more than 100 dif-ferent countries have made their home in modernIsrael. This extraordinary success has come at ahigh political price. Israeli society can be viewed asa knot at the center of many tangled ropes: eachrope attempts to pull the knot (and all the otherropes) in some direction, causing all the others tomove from side to side. Such is Israeli society: con-stantly moving, changing, and developing.

Many of the world’s major international compa-nies have major branches in Israel. I recentlyspoke at a workforce mobility conference in Israelthat had more than 120 HR managers in atten-dance. I noted representation from companiessuch as Intel, Microsoft, Siemens, and Ericsson. Ifound the HR culture tended toward U.S-centricwith a touch of Middle Eastern philosophy andcharacter.

Israel is a complicated society, a modern state set against the backdrop of

Biblical history. Bar-Pereg examines the country’s cultural underpinnings,

and offers some strategies for success for inbound expatriates.

B Y M I C H E L E B A R - P E R E G

barpereg1_MOBILITY 5/11/10 4:18 PM Page 2




A Closer Look at Group MovesIntel Israel has developed a special

brand of caring for the spiritual,physical, and practical aspects ofmanaging mobility, becoming stan-dard practice for them and influenc-ing other global companies. GaliaEllinsky, senior HR, ISR Work ForceMobility, for Intel Corporation,Israel, recently told me of IntelIsrael’s group move of 900 to fourlocations in Ireland and the UnitedStates. “When we started to preparefor this effort of moving so manyindividuals and families abroad, werealized that we needed to focus onthe personal needs of the people inorder to guarantee success of theirassignments,” she said. “We knew(per past experience) that if peopleare happy with their houses, chil-dren’s education, and child care solu-tions and have happy spouses, theywill be able to integrate to their newpositions fast, and that their chanceto succeed increases accordingly.

“One example is the religiousneeds of the Israeli population. Welearned that one-third of our [as -signees] would like to live near a syn-agogue and close to a Jewish com-munity. One of the locations wasmost challenging since we planned tolocate most of the families at theIntel site area, as there were a lot ofhouses and complexes close to thesite, and many education options forthe children. We also consider safetyand security when we choose accom-modations, and there wasn’t a syna-gogue at that area.

“At that time, we were contactedby a rabbi from New York whoexpressed his willingness to supportus by opening a synagogue andestablish a Jewish community nearour Intel site. This enabled us toaccommodate our employees and

their families at the desired locationwhile they did not have to give up ontheir personal needs and way of life.By doing that, we achieved not onlya great solution for our population,but also saved money, saved com-muting time, supported our safetyand security aspects and, as a by-product, created the foundation for aJewish community in that area.”

Understanding Israeli CultureFor inbound assignees coming to

Israel, one of the difficulties is toforget past prejudices and begin theassignment with an open attitude.People who relocate to Israel do notwant to leave. They realize thatIsrael is far from what they see in thenews, and that there are a lot ofaspects that they like—the people,weather, variety of places to visit,and beautiful landscape.

Israel culturally, economically, andpolitically sits in an intersection ofdiverse opinions. For executivesentering Israel, they surely have been

confronted with various opinions onthe danger, politics, and sheer cul-tural see-saw of nationalities wholive there. Many incoming personnelwill have been bombarded with fam-ily concerns and worries about mov-ing to the region; most without everhaving visited Israel before buthaunted by the news reports andmedia opinions.

Such varied views on daily newsand politics are equally rife and dis-cussed within Israel itself on the bus,in taxis, and supermarkets. Politics isdaily fare for all the population, andopinions and ideas can divide fami-lies and friends equally. However,being a democracy, at least all opin-ions are out in the open!

A discussion with Marion Burg -heimer, a cross-cultural trainer inIsrael, illustrated the true meaningof adaptation, mentioning that inter-cultural differences affect work pro-cesses as well as daily life and, nowa-days, greater attention needs to befocused in this direction.

She gave an example of culturesconcerned with time. Attitudesregarding time in Israel are moreflexible then in other countries; onecould easily wait several hours for atechnician, or go and have lunchbetween 12:00 and 17:00, the hoursof a business lunch.

In the workshops she has beenleading, she had noticed that peoplewere constantly talking about thechange they were going through. “Itwas clear that one has to be well pre-pared for the hectic way of lifeIsraelis tend to lead,” she said.“Change is not a slogan in Israel:political events, the constant impro-visation, and the desire to move for-ward or at least the fastest you canfrom one place to another, be it onthe road or in the supermarket, or in



a conversation, influences the waypeople behave. This fast-forward wayof life is in contrast when peoplerelocate to places where the pace oflife is different, mainly more ordinaryand calm. In Israel, the fast pace andconstant movement hits you hard.”

IntegrationI asked Mark Kedem, GMS, client

relations director of Ocean GlobalReloc ation Solutions, Israel, what hefinds is the most difficult part of therelocation process for transferees onassignment in Israel, and how theyacclimate themselves to their newenvironment.

“The truth is that in the final anal-ysis, Israel is one of the most populardestinations for relocation and, if oneasks an assignee who has been tonumerous destinations, he will high-light Israel as the most enjoyablerelocation,” he said. “I know it’s ahard concept to swallow, but look atthe raw data—it is the country of theBible and there is a magnetic pull forall [religions]. It is a beautiful coun-try with endless opportunities oftouring and discovering the biblicalsites, awesome nature, and somewonders of the world (the DeadSea). And do not forget the weath-er—at least nine months of sunshineand warmth (sometimes excessive),beautiful beaches, modern cities,awesome food, and easily accessibleto other destinations in the MiddleEast, Turkey, and Europe. Tel Aviv iscomparable to New York and is a citythat never sleeps—thriving and excit-ing, great restaurants and pubs,music and culture.”

He adds, “one simply has to getover the initial hesitation based onsometimes non-factual and exagger-ated news reports on Israel. No oneis saying that there is no security

threat in Israel and that there are nodangers but, at the same time, this isnot all the time and not in all placesin Israel. One has to actually visitIsrael in order to see this, and myrecommendation to all assigneescontemplating an assignment toIsrael is come on a ‘look and see’trip and your perspective willchange. The best way to deal with aconcerned family member is to bringhim or her to Israel, as well.”

Further AnalysisJohn Hall, compensation and ben-

efits partner with Mercer Consult -ants, an American living in Paris, wasspeaking at the same HR conferencewith me in Israel. He explained,“whilst I had some natural concernsabout security on my first trip toIsrael, I was pleasantly surprised athow safe it was without being overtlysecure to the point of hostile. Onthis, my third trip, the question didn’t really cross my mind as I rent-ed a car and moved freely about the

country. While I have no natural tiesto Israel, I arrived a few days early totake advantage of the rich history andnatural beauty that the country hasto offer.

“I worked with the chairman ofthe organizing committee, ProfessorMoshe Zviran, in identifying poten-tial clients and he provided me notjust with names of companies, butthen proceeded to call them on mybehalf and set up meetings with theappropriate persons for me to discusswith. The meetings themselves werevery useful and established thatIsraeli-headquartered multinationalsfaced the same challenges the U.S.-or European-based multinationalswere facing and they were address-ing those challenges in a logical andprogressive manner. I was impressedby the level of engagement they hadin not only looking for ways to mar-ket their services, and whilst thereare unique aspects to working withnew cultures—Israel being no excep-tion—it has been a positively disarm-ing experience working there and Ifound the people I met both warmand sophisticated.”

My Own ExperienceIn my own career moving person-

nel around the world, I have uncov-ered some distinctive traits of Israelibusiness culture. The Israeli’s some-what collective culture of beingobsessed with survival pervades dailylife. This gives them highly opinion-ated views and perhaps an overbear-ing energy when dealing with dailymatters.

Therefore, relocating Israelis needa particular understanding, as notwo Israelis are likely to be the sameor have similar requirements. Thereis a distinct lack of uniformity in thepopulation.



The Israelis I have met certainlymake full use of technology, and thecountry has an exceptionally highproportion of innovation in the ITsector. Their talent is well knownand is in demand abroad; however,their direct approach and tireless ide-alism makes them occasionally diffi-cult relocation clients. Added to thatis the strong attachment to homeand family.

Family is a high priority for Israelisand conflict is visible when jobs areoffered to potentially “difficult”locations, where an Israeli oftenproves he or she has the ability towork quite successfully. It is in con-flict with home life whereby childrenand spouse considerations can super-sede their need for career improve-ment. I have talked to many Israelisfar away from home and family andthey do get depressed and dispirited.Espe cially as family events andJewish holidays are so important inthe yearly calendar. Missing suchevents is hard for them.

A high proportion of Israeliwomen are well-educated and manyof them work. In fact, Israeli societyis built around working spouses,making relocation a tough familydecision. The difficulty of choosingbetween home life and keeping thefamily together, as opposed to main-taining work and study positions, isespecially apparent among the Israelidiaspora. When assisting with Israeliexpatriates, it helps to rememberthat the spouse may have given upan excellent job or career in returnfor outside opportunities. Being ableto work outside the sometimes-claustrophobic Israel is a big bonusif one can get it. How ever, as withmost relocation offers, it comes at ahigh price, particularly for Israelimarriages.

Assaf Eitan, an Israeli relocationmanager who recently returned fromEurope, observes, “some Israeliclients that relocate to a new countrytry to use their personal contacts,contacts within the company, andthe local Jewish community beforeactually taking advice from the relo-cation company!” This makes it par-ticularly frustrating for any reloca-tion consultant.

Israelis outside their own country,in general, are a collective societytending to interact as much as possi-ble with other Israelis, feeling morecomfortable around other Israeliexpatriates and finding Jewish bak-eries, places of worship, and newspa-pers connecting with Israeli news asa top priority. However, Assaf, whohas been working for the past sixyears within the relocation industry,adds that this is not so different fromthe French or British who show thesame kind of collective behaviorwhen abroad.

Israel is a complicated and fast-driven society, home to an occasion-ally argumentative and opinionatedpeople who usually back up conflictwith logic and education. Emotionalon political matters and informal intheir attitudes, they enjoy having agood time, seeing the world, andkeeping their heart close to theircountry. They adapt well and can beseen in senior positions across theglobe. And, if you relocate to Israel,you can expect a fast-paced ride in acountry full of enthusiasm, easy con-tacts, and cultural opportunities, allwhile being surrounded by biblicalhistory within a modern state.

Michele Bar-Pereg is managing director ofthe Bar-Pereg Group, Amsterdam, theNetherlands, and a member of the MOBILITYGlobal Editorial Advisory Committee. She canbe reached at +20 6722657 or [email protected].


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http://www.fidi.com

We are moving to Amster -dam! Where do we wantto live? That is when the

questions begin. Where are the inter-national schools located? What neigh-borhoods are safe? What kind of hous-es does our new country offer?

These days, we first turn to theInternet to start our search for infor-mation about our host country—itscities, neighborhoods, type of housesoffered, furnished or unfurnishedaccommodations, and whether to usea real estate agent, a relocation com-pany, or conduct the search ourselves.Questions and more questions!

When I started to write this articleabout moving to the Netherlandsand the Dutch housing market, I

thought this would be easy. Havingdealt with expatriate housing in theNetherlands for more than nine yearsand having lived abroad, as well, I amfamiliar with the feelings that expatri-ates experience when learning theywill move abroad and must begin tosearch for a home in their new hostcountry.

But where does one start? It is notas easy as it sometimes looks.

Beginning to SearchAlmost all real estate agencies in

the Netherlands that specialize inrental property have good websites,most in English, as well. Many pre-sent a considerable variety of proper-ties from which to choose, although

a lot depends on the area in whichyou want to live, desired living space,and amount budgeted. You can do alot of searching on your own, but itis advisable to contact a real estateagent for the actual house search andthe negotiation phase.

Consider that most expatriateshave never lived in the Netherlandsand are, therefore, not familiar withthe price ranges, laws, and customs.An agent, although more expensive,will help you to get a good impres-sion of the area in which you wouldlike to live, expedite the search, andget a better deal on the property.Also, the agent has the advantage ofhaving access to a multiple-listingsystem with other agents, which

Locating Suitable Housing

in AmsterdamB Y I L O N A E I C H L E R

Amsterdam, with its long history as an international business hub, exists as a top European

destination for international expatriates. But where to live? Eichler offers an overview of the

Dutch real estate market, as well as tips on how to secure suitable housing.


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keeps them up-to-date on properties’availability.

It is advisable to find an agent inthe city or town in which you wouldlike to live; they know the local mar-ket much better than an agent fromanother area. It is important that youcan trust your agent. They will selectthe available properties based onyour list of wishes and budget andwill make appointments for you toview these properties.

Employers sometimes make use ofrelocation management companies,which will aid you in your search.They will accompany you duringyour viewing and will advise on thepositives and negatives of the proper-ties. A relocation agent is not a realestate agent; a relocation agent isthere to help the expatriate and tohelp them find the best possibleproperty. Rental agents are depen-dent on each other—they often sharecommissions in the market and maynot always have a transparent agenda.A relocation agent can assist in get-ting the best deal in the interest ofthe expatriate. The relocation agenthas an open mind and is independentas he or she is not paid by any realestate agent or landlord.

During my career, I have learnedthat most of the transfering familieswith children search for schools firstand then decide where they willlive. Many companies provide a pre-assignment trip for the expatriate andhis or her partner to visit the possibleschools and start the search for hous-

ing. A real estate agent or relocationcompany is offered in many cases,but sometimes people do need to dothe search themselves. And, if youfind a house on the Internet and thereal estate agent is helpful, you stilldo not know if you get a good dealand, maybe more important, whetherthe house in good condition or con-tains hidden issues. A good realestate agent will work in your interestand will help get the best deal possi-ble, but know, as in every country,that they all would like to earnmoney.

Property Types and Rental AgreementsDifferent combinations for proper-

ties are possible:• unfurnished, which means

empty, no carpeting, curtains, orappliances;

• semi-furnished, contains somefurnishings like kitchen appliances,carpeting, and curtains; and

• furnished, which means every-thing has been taken care of and theproperty is move-in ready.

Many rental agreements have beenconstructed to meet the needs ofexpatriates and have an Englishtranslation, as well. It is alwaysadvised to have a diplomatic clauseincluded in the rental agreement,which gives the expatriate or thecompany the opportunity to cancelthe lease if the expatriate will betransferred before the end of his orher assignment with a two month’snotice period.

A word of warning: a verbal agree-ment is binding under Dutch law.Therefore, unless you are absolutelysure you will rent the property, donot make any verbal or written com-mitment.

After agreement and payment, thekeys will be handed over by the land-lord or his or her representative and acheck-in will be conducted, assistedby your agent. A checklist will becompleted regarding the conditionof the property. The inventory listwill be checked and signed, as well.This is to protect you against anydamages that might occur in thecoming years while living in thehouse.

For expatriates who do not havethe luxury of a real estate agent orrelocation company and have to dothe search themselves, it is advised tobe aware of the “puntensysteem.”

This puntensysteem, or “point sys-tem,” counts for most rental proper-ties, but does not qualify for thehigher budget rental houses. Forexample, it could be that a propertyof €1,250 on the free market doesnot have the appropriate amount ofpoints necessary to be at the freerental market and, in this case, thetenant pays too much. The tenantcan turn to the Huurcommissie tohave the rental amount checked. TheHuurcom missie is an independentorganization that mediates in dis-putes between lessee and lessor.

Most expatriates are not aware ofwhat the Huurcommissie can do and



it has to be said that most landlordswill not be content if their tenantresorts to using the Huurcommissieto resolve disputes.

Every rental apartment gets a cer-tain number of points for space, loca-tion, heating system, kitchen andbathroom/toilet appliances, shops inneighborhood, and availability ofpublic transportation. If the propertyqualifies for the maximum amount ofpoints (142), the property is allowedat the free market and the landlordcan determine the rental price.

The Huurcommissie will deter-mine if the calculation of the pointsystem is correct.

You can only turn to theHuurcommissie within six monthsafter signing the rental agreement.

In the EndDo the best possible research

before you relocate, search theInternet for information on your newhost country, its habits, the housingprovided, the dos and don’ts, and tryto speak to local colleagues to getinformation on cities, areas, andschools. Find a real estate agent orrelocation company (or preferablyboth) that you feel comfortable withand you trust to help you find thebest possible house that would fityour and your family’s needs.

The adventure will truly be a lifeexperience!

Ilona Eichler is a relocation consultant withDutch Living Services BV, Amsterdam, theNetherlands. She can be reached at +31 202065860 or e-mail [email protected].


http://jobs.worldwideerc.org/home/index.cfm?site_id=8692


T he international assign-ment has been confirmed.The family has agreed tojoin you in this new

adventure. And an adventure it cer-tainly will be. As defined by Merriam-Webster’s Dictionary, an adventure isan exciting or remarkable experiencethat also can include some risk-takingor danger.

I listened to one of my clients as hedescribed the family’s arrival insouthern France and how leavingtheir small hometown in the Midwestturned out to include not onlyremarkable experiences, but someserious reflections on what was at riskfor their two teenage boys. Our dis-cussions focused on how best to pre-pare each and every family memberfor an expatriate assignment. Thisfamily participated in post-arrivalcross-cultural training with follow-up

expatriate coaching that equippedthem with the support and structureto air what could have sent thempacking their suitcase, heading home,and incurring an immense expenseboth to the company and to them-selves as they would have had to dealwith a failed assignment.

What turned this family’s adven-ture into a successful internationalassignment?

Moving Causes UpheavalArriving in a foreign country

entails more than just learning theforeign language. For anyone whohas moved, even to another house inthe same neighborhood, you knowthe upheaval created by decidingwhat goes, what stays, and what getsthrown away. That is the physical sideto moving. Then there is the emo-tional side to going through this pro-

Moving Abroad?

Don’t Forget to Pack Your Brain

B Y M A U R E E N B R I D G E T R A B O T I N , G M S

What is it that makes expatriates feel like fish out of water, and

what are the best ways to acclimate to new cultures and ways of

life? Rabotin says that when the time comes to go on international

assignment, prepare yourself physically and mentally with realistic

expectations by understanding how your brain functions. This

preparation, beginning with self-awareness, will put the adventure

into a more positive light and put you on the path to success.

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cess. A nostalgic journey of trying tounderstand why we accumulatebelongings and what they mean tous. Their monetary value often isminimal compared to their sentimen-tal value.

When this trip down memory laneis completed, the boxes filled,labeled, and piled high for themovers, a personal journey of prepa-ration starts a new upheaval, thistime emotional. From the practicalside of how to set the stage for good-bye events, closure for projects sud-denly interrupted by an overseasopportunity, and family reunionswith unending questions and com-ments—“lucky you,” “why are youleaving?” and “when can we comeand visit?”—to the intangible side of

why you may experience an emotion-al roller coaster. If this is the firstinternational assignment, the honey-moon stage tends to be prolongedwith unrealistic expectations thateverything will be like it has beenback home.

Good intentions by family andfriends have a role in your successfultransition, which should not beunderestimated, starting with theimportance of having family andfriends visit after you have settled in.As you get your bearings, you sub-consciously prepare the arrival ofguests as you plan for their visit. Theopportunity to play tourist onceagain in your new hometownincreases your attention of where youare and what you would like to share

with loved ones. With that as a firststep in your action plan, let us take alook at what is driving the emotionaltides.

Emotions are influenced by a men-tal state that arises in response tohow one appraises a situation, theactions taken, and the reactions pro-duced, rather than through any con-sciously focused effort. This continu-ous processing of information isaccompanied by physiologicalchanges in the brain.

Returning back to our family fromthe Midwestern United States, theirarrival in a small town in the south ofFrance seemed to be the ideal oppor-tunity for growth, both professional-ly and personally. For the assignee,his role of turning the local sitearound meant restructuring the com-pany. For his wife, her dream of pur-suing her earlier studies of theFrench language and a passion forFrench cuisine were definite motiva-tors in accepting the assignment.Their sons did not necessarily sharethis enthusiasm as their entry intoadolescence already had begun. Theirlife in the Midwest had everythingthey could hope for: the youngerson, a star player on the junior highbasketball team; a new girlfriend forthe older son. After much persuad-ing, the boys were convinced that thefamily would try it for a year, and ifthey were not happy after that, repa-triation was always possible.

Arriving in early August and nothaving had a preview trip to choosehousing, they had agreed to stay in ahotel until they could find appropri-ate accommodations. The first day atthe hotel pool had the mother spin-ning in circles. Topless youngwomen lounged around the pool asher teenage sons gaped in awe. Forher husband, his introduction to the


http://www.delsuites.com


http://www.worldwideerc.org/Events/Pages/gws10.aspx


company structure lacked exactlythat. After agreeing to attend a pre-sentation with a new client, he wasastonished to find that the executiveswere still writing the script to theirpresentation 10 minutes after themeeting should have begun. Duringour cross-cultural training, therecounting of these and otherepisodes led us down an interestingpath on how they had prepared forthis journey.

A Fish Out of WaterRecent research in neuroscience

amazingly is proving the true mean-ing of the expression, “to feel like afish out of water.” Years of experi-ence engrave memories in our brainof how, why, and when we do whatwe do. With repeated practice, con-stant familiar environments, andunending habits of daily life, we tendto arrive at a mindless state of exis-tence. “Mindless” as in the oppositeof mindful—that state where we exe-cute everyday obligations withoutmuch thought as to the how, why, orwhen of it all. Then suddenly we findourselves uprooted, much like thisfamily from the Midwest.

Our brain is on alert as it tries toretrieve a sense of tranquility. A feel-ing of stability escapes us. What isdifferent becomes more pronouncedas we try to understand its implica-tions in comparison to our expecta-tions. What we believed to be accept-able ways of behaving become ques-tionable. What we accepted as truthsseems to turn out to be misled con-victions. Who are we? Our identityappears to have vanished as no onerecognizes who we are, where wehave been, and why we seem so con-fused. This state can be explained byan erratic meandering of neuronsbuilding new information highways.

Burrowing deep into our brain sys-tems, they carve out new pathways toexecute, stabilize, and provide forfamiliar patterns. This contributes tothe feeling of fatigue.

During this transition period, ourbrain actively needs our attention.When we are jolted into seeing whatsurprises or shocks us, researchers inneuroscience are now teaching usthat we can train ourselves to chooseour reaction.

Developing MindfulnessBy developing mindfulness, the

ability to focus our attention and beextremely aware of our environmentwith all our senses: what we are feel-ing, seeing, hearing, thinking, andsmelling, we increase our neuroplas-ticity, the adaptability of the brainneurons. From this point on, we canthen choose how to regulate ouremotions. One of the best strategiesfirst described by Victor Frankl in hisbook, “Man’s Search for Meaning,”is today referred to as “cognitivereappraisal”—our capability tochange how we think about what ishappening to us. When we learn howto recognize and label the emotionssurging through our body in speedsof milliseconds, “we can reinterpretthe meaning of the event in a waythat changes in emotional impact,”according to Dr. Kevin Ochsner inhis article “Staying Cool UnderPressure: Insights from SocialCognitive Neuroscience and TheirImplications for Self and Society,”published in the February 2008 issueof the NeuroLeadership Journal.”

In this article, the processdescribed enables us to understandthe different stages that occur whenwe generate an emotion. This partic-ular cognitive strategy—reappraisal—involves reframing or reinterpreting,

adopting or accepting, normalizing,reordering, and repositioning, whichcan be simplified in laymen’s terms asa 4-A command process of analyzing,adjusting, aligning, and adapting.Trying to avoid or suppress initialemotions through distraction hasbeen shown to make things worse inthe long run.

When we analyze the situation, wecan adjust our response, align it withwhat is culturally and personallyacceptable, and adapt our reactionsaccordingly. By redirecting our initialshock of what is different throughmindfulness, we modify the process,thus changing a negative judgmentinto a positive curiosity. How is itthat this is acceptable behavior? Whatshocks me and why? What do thesepeople value that seems to contradictmy subconscious values? How can Idevelop a perspective that is moreacceptable of this situation? Can Isimply choose to avoid this situationin the future?

By redirecting our emotional stressand culturally calibrating our reac-tion, we avoid an emotional outburstknown as an “amygdala hijacking” ora reaction labeled as “going limbic”in “Your Brain at Work,” by DavidRock. When the time comes to go onthat international assignment, prepareyourself physically and mentally withrealistic expectations by understand-ing how your brain functions. Thispreparation, starting with self- awareness, will put the adventure intoa more positive, bright light as youspeed ahead on the road to success,for everyone’s benefit; the company’sand the assignee’s.

Maureen Bridget Rabotin, GMS, is a certified global executive coach, founder ofEffective Global Leadership, Paris, France, and a member of the MOBILITY GlobalEditorial Advisory Committee. She can bereached at +33 6 6354 1225 or [email protected].


http://www.worldwideerc.org/gov-relations/Pages/index.aspx

It is well known that moving isconsidered one of the moststressful undertakings in an indi-vidual’s life. For many, just the

thought of relocating can elicit dreadand trepidation.

While the challenges that areinvolved in relocating any interna-tional assignee cannot be eliminated,they can be managed by employingbest practice methodologiesthroughout the process.

One of the main challenges forcorporate accounts and/or cus-tomers of the international house-hold goods moving and storageindustry is trying to compare thelevel of service and quality offered byvarious service providers. In layterms, the customer should be ableto compare apples to apples whenmaking the educated decision thataccounts for the price of the serviceoffered, as well as the service qualityand reliability.

On a fundamental level, theremoval and transportation of the

assignee’s physical belongings is themost visible part of that process.Applying sound quality-orientedparameters to the service providerselection process will go a long waytoward affecting a quality move and apositive experience for the transfereeand his or her family.

Improving on a Global StandardFAIM Certification (see sidebar on

page 90) sought to develop a mea-surable means by which to elevatethe level of service that FIDI’s mem-bers were providing to their corpo-rate clients. To improve on the stan-dard, FIDI embarked on a top tobottom review, as well as collectedfeedback from corporate customersand clients concerning what they saidwere the most critical aspects indelivering this service to their inter-national assignees.

The result, FAIM 2.0, incorporat-ed the advanced requirements oftoday’s mobility policies, while simul-taneously strengthening the FAIM

Certification operational and servicequality best practice methodology.

The new FAIM standard is the cul-mination of multi-year processes thatdrew on the knowledge and expertiseof some of the industries most expe-rienced and innovative executives, aswell as the extensive experiences ofthe consumers of those services.

In addition to addressing environ-mental, as well as corporate socialresponsibility policies, one of thetrends driving the re-evaluation ofcertification, especially for FIDI, isthe need to incorporate additionalcustomer-focused policies andrequirements. While feedback fromcustomers and recommendations forimprovements were incorporatedthroughout the new FAIM standard,two modules in particular have incor-porated customer-focused require-ments that have a direct affect on aFIDI member’s FAIM certification.

Quality moving services requiretimely and prompt delivery of ser-vices. Timely reaction to any contact


B Y B O R I S A . P O P U L O H

One of the overwhelming challenges in selecting an international householdgoods moving and storage provider is that it is so difficult to compare the level of service and quality among all potential suppliers. Populoh addresses thesechallenges and how they apply to the new FIDI certification.

Responding to Change in the Business World Through Industry-specific Quality Standards

pupoloh1_MOBILITY 5/10/10 3:23 PM Page 2




or inquiry from a customer willensure professionalism and customersatisfaction. Furthermore, customerfeedback is the ultimate measure-ment of customer satisfaction and,therefore, the success of a quality ser-vice system. FAIM 2.0 has devotedan entire module to this aspect of themobility process and the policies andprocedures associated with collectingand monitoring customer feedbackare an integral part of the FAIM cer-tification process.

While the advancements of thenew FAIM standard extend beyondwhat can be outlined here, its key

features will provide a glimpse intothe restructured methodology ofsome of its strategic components.

New Key ChangesIssues of financial security and sta-

bility have been on the front page ofevery global newspaper for the lastfew years. Therefore, incorporatingmore rigorous financial requirementswith more frequent review of mem-ber companies’ financial conditionhas been a main focus of FAIM 2.0.Financial concerns are closely fol-lowed by those regarding security,which are addressed by the incorpo-

ration of new operational securityrequirements in conjunction withbusiness continuity elements into thenew standard.

The last thing a corporate accountand/or customer wants to have toworry about is whether his or herservice provider will be around tocomplete the job for which they havebeen hired. FAIM 2.0 addressesthese concerns through strict finan-cial monitoring of its global membercompanies. With FAIM 2.0, the con-tinual annual monitoring of thefinancial health of FIDI membercompanies has become one of themost integral requirements of FIDImembership. FIDI member compa-nies must meet and maintain specificfinancial ratios for liquidity and gear-ing to order.

Another significant aspect ofselecting a qualified transportationservice provider is to be aware of theprovider’s policies regarding thephysical security of the goods beingtransported, as well as the security ofthe data that is associated with thatand every other move. All FIDImember companies must have specif-ic policies that protect employees andthe public, the customer’s goods anddata, as well as the assets of the busi-ness against risks and hazards. FIDIaffiliates, as part of their FAIM certi-fication procedures, must demon-strate awareness of potential risks anddetail their risk management proce-dures and preventative action toensure safety and security of theirservices and operations.

Evolving business practices andcustomer requirements also havebrought environmental and corpo-rate social responsibility concerns tothe forefront of decision-making pro-cesses. Consequently, ways to mea-sure and ultimately reduce environ-

The FAIM Standard

T he FIDI Accredited International Mover (FAIM) standardwas developed in conjunction with one of the world’s

leading management consultants. FAIM requires everymember company of the FIDI Global Alliance to undergo aphysical onsite compliance procedure administered by anindependent third-party management consultant. Thesecompliance procedures and associated operational auditsare not just performed as a company qualifies for FIDI mem-bership, but are an ongoing process that includes follow-upcompliance procedures every two years.

FAIM goes beyond a physical inspection of a membercompany’s operational faculties. Every FAIM-certified member company of FIDI undergoes a rigorous managerialand operational review that covers a broad spectrum ofbest practice parameters for the industry, including auditedfinancial security and stability; facilities, equipment, andmaterials requirements; staff knowledge and core compe-tencies; quality of management processes; documentation;insurance and risk management; legal compliance; andproactive customer feedback management.



mental effects have been made anintegral part of the standard, as haveconsiderations for good corporatecitizenship.

One of the main points that cameout of FIDI’s working sessions withcustomers was the importance thatmore corporate accounts and individ-ual customers are placing on soundenvironmental practices as well ascorporate social responsibility. Toaddress these important issues, FIDIincorporated specific requirementsand guidelines into FAIM 2.0. Onthe environmental front, FIDI mem-ber companies are expected to showleadership in managing the effect oftheir operations on the environment.Each certified member company isrequired to have a documented envi-ronmental policy that outlines its

individual procedures concerning therecycling of packing materials, as wellas waste produced by office and fleetoperations. In addition, the policiesmust outline steps taken to conserveenergy and reduce emissions in itsoperations, warehouse, and officeactivities.

The issue of corporate socialresponsibility is important to FIDIand its global membership. There -fore, ensuring that services to cus-tomers are provided through condi-tions that respect basic human rightsand that follow an ethical conduct isessential. FIDI member companiesmust demonstrate commitment toensure their company and serviceproviders deliver services while fol-lowing a social compliance policy andcode of conduct.

Beyond these key issues, the newstandard encompasses an increasedfocus on qualified staff with anemphasis on training and continuouseducation. In addition, improvedrequirements for responsiveness andcommunication, coupled with theintroduction of quality metrics foroperational self-assessment, also havebeen added.

The functional focus of the newFAIM 2.0 standard will remain theprogressive monitoring of evolvingrequirements of both the customers’and service providers’ needs torespond to the changing needs of theultimate consumer: the internationalassignee and his or her family. Boris A. Populoh is managing director ofFIDI Global Alliance, Brussels, Belgium. Hecan be reached at +32 2 421 4751 or [email protected]


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Following the announcement ofsub-prime lending practices inAugust 2007, the housing industryin the Seattle, WA, metropolitan areatransitioned from a seller’s to buyer’smarket and absorption rates fellbelow 20 percent for 30 straightmonths in a market where stability ismeasured at 25 percent. With the collapse of the financial

markets in September 2008, absorp-tion rates fell to 10 percent inDecember 2008, the lowest levelsince I started tracking the statisticsin 1985. Absorption rates measurethe strength of the market. A shifttoward stability was experienced in2009; however, the supply of inven-tory pumped with short sales, fore-closures, and a buyer pool thatsought below-market purchases con-tinued to deflate the housing indus-try, and property values declined at arate of up to 2 percent monthly(average 1 percent) during the two-year period between January 2008and December 2009. The absorptionrate was reported at 28 percent forMarch 2010, the first sign of marketstability in two and a half years.March absorption rates typically out-perform any month each year asnoted in four of the past five years.One month does not make a market;however, statistics indicate the hous-ing industry is moving toward stabili-ty. Housing markets closer in to the

urban core and employment centershave measurably lower declines inhome values, while those fartherfrom employment and services thatexperience an over-supply of newconstruction and short-sale competi-tion have felt the declines more sig-nificantly. The low-end markets have per-

formed better than higher pricedhomes in most neighborhoods driv-en by low-interest rates, tax incen-tives, and the anticipation thathomeownership never again will be

this affordable. The high-endmarket is driven by investmentportfolios and business growth.Business activity is slowly grow-ing in the region. Unemploy -ment, reported at 9.6 percentfor February 2010 in the PugetSound region, is double its lowin 2007 and a point aboveFebruary 2009. Although theDow is reported at more than11,000—4,000 points above itslow in 2007—buyers of higherpriced housing are unsure thatthis market is at its bottom. High-end sellers have the capability tocarry these homes for a longer peri-od of time and have been reluctantto lower asking prices. Accordingly,the two are at odds and few salesoccur. It is evident from the graph the

housing market is gaining momen-tum. Most say that the bottom isbehind us, the economy will stabilizeduring 2010, and home values maykeep pace with inflation assuminginterest rates remain relatively stable.There is pent-up demand in high-end homes and buyers will enter themarketplace as more sellers becomerealistic in their asking prices andshow a willingness to negotiate pricebased on demand rather than salesrecorded three years ago. Developers and builders are posi-

tioning themselves in the new hous-ing market, which has transitionedfrom “bigger is better” to affordable.They are acquiring lots at prices notseen in 10 years, offering affordablehousing to the community. The mid-to upper-level new construction mar-

ket is considered as high-risk invest-ments and, as the housing stock isabsorbed, it will experience a short-age of inventory within some 12 to24 months assuming investors/developers do not respond to antici-pated demand. Seattle is poised for economic

growth. Concerning housing, thereal issues are affordability and jobs.As interest rates rise, fewer prospec-tive buyers will qualify for new hous-ing, forcing sellers to offer greaterconcessions in a thin profit market orbuyers to settle for less. Wages havedeclined and unemployment contin-ues to rise. Job creation will stimu-late all areas of the economy. Thefederal tax credit, an incentive tofirst-time buyers, expired at the endof April. The sense of urgency it cre-ated for many buyers no longer isavailable. With the incentive gone,market activity is anticipated to slowin the short term.

Alan L. Pope, SRA, CRP, of Alan L. Pope& Associates, Inc., Redmond, WA, can bereached at +1 425 882 0608 ext. 101 or e-mail [email protected].

RAC Report

Regional Market Summary: Seattle, WA, Metropolitan AreaSTATISTICAL SNAPSHOT

Today One Year Ago Change

Unemployment 9.6% 8.5% +12.9%Months of Supply 5.46 9.97 -45.2% Annualized Sales Volume 16,022 15,991 +0.2%Annualized Average Sales Price $455,950 $527,322 -13.5% Average Days on Market 78 73 +6.8%

MARKET AT A GLANCE

Economic Climate: Slow Improving

New Construction: Positive Growth at Low End

REO Activity: High at Low End

Supply: Oversupply (Lowest Level in 3 Years)

Demand: Increasing Since 2nd Quarter

Market Direction: Improving Close to Urban Core

Market Mood: Optimism Toward Affordability

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sweeps nearly 7,000 sources includingmajor newspapers, business maga-zines, web sites, wire services andindustry publications to find the mostnoteworthy news focusing on globalworkforce mobility issues. The editorialstaff reviews over 15,000 stories perday and prepares an executive sum-mary of the most significant articles tobe delivered to your e-mail inbox.

May 5, 2010

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An Afghan Lesson in Supply and Demand Los Angeles Times (04/22/10) Fleishman, Jeffrey There is a strong demand in Afghanistan for pri-vate schools as underfunded public schools can-not meet the country’s need, and while manyentrepreneurs are rushing to fill the gap, thereare problems with fraud and poor teaching stan-dards. The Ministry of Education is only fivemonths old, and is trying to crack down on fraud-ulent schools. “The number of opportunists isdeclining,” says Najeeba Nooristani, who over-sees private schools. There have been more than280 schools opened in the past three years, indi-cating the country’s desire to move beyond therepressive Taliban era but also highlighting thecurrent government’s inability to fuel that change.At the Zarghona public school, many of the stu-dents do not have chairs, textbooks are dated,and new students are being turned awaybecause there are not enough desks. The streetsare crowded with signs advertising privateschools, but Safia Jan, principal of Zarghona,says most of them are empty facades. Many donot teach proper Afghan history, and often areinfluenced by outsiders who offer to fund theschool if certain curriculum is taught. (http://www.latimes.com/news/nationworld/world/la-fg-0422-afghan-schools-20100422,0,2927158.story)

House Hunting in ... Macao New York Times (04/28/10) Vandam, Jeff Property prices in the Macao region of China havebeen rising since 2002, when the governmentbusted up the gambling monopoly of Stanley Hoand allowed foreign companies to build casinos.Prices dropped about 30 percent after the financialcrisis, but have been steadily climbing since thenand are now as much as 20 percent beyond theirpre-crisis level. New infrastructure, including a pro-posed light-rail system, is likely to send prices evenhigher, experts say. There are no restrictions onforeign buyers in Macao, and about 15 percent ofbuyers are foreign, most of which come fromAustralia, Canada, and Britain. All purchasesrequire a 3.15 percent stamp duty and about onepercent of the value in notary fees and deed regis-tration. A five-bedroom three-bath luxury apartmentis going for $1.42 million, and property tax iswaived for new buildings. (http://www.nytimes.com/2010/04/28/greathomesanddestinations/28gh-househunting.html?pagewanted=print)

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High Expatriate Satisfaction Could EncourageMove to Finance Jobs in Hong Kong AstburyMarsden (04/23/2010) A new survey of British expatriates living inHong Kong finds that they believe their qualityof life is better than their U.K. counterparts.The NatWest International Personal BankingQuality of Life Report found that 89 percent ofrespondents said their life was better in HongKong and the number planning to return homefell to 19 percent from 26 percent in 2008.Salaries in Hong Kong were about 20 percenthigher than in Britain, and 90 percent ofrespondents said they were financially secure.The average salary increase in Hong Kongwas 19 percent, highest of all countries studiedin the report. (http://www.astburymarsden.com/news/832/High-expatriate-satisfaction-could-encourage-move-to-finance-jobs-in-Hong-Kong/)

Nigeria: As Jonathan Signs Local Content Bill Into Law allAfrica.com (04/26/10) Shosanya,Mohammed Nigeria’s Acting President Goodluck Jonathan signed a local content bill into lawlast week, a law which aims to bring morelocal oil and gas companies into the country’s$300 billion industry. The goal is to grow localcontent to 70 percent by requiring thatNigerian companies be given first considera-tion in the award of oil blocks, oil filed licens-es, oil lifting licenses, and all other contractsin the industry. During the bidding process allcompanies must submit a Nigerian contentplan to show compliance with the new law.Any multinational company in the industrymust keep at least 10 percent of its profit inNigerian banks, and only Nigerian insurancecompanies may insure oil and gas companiesunless the Nigerian insurance commissionsays there is insufficient capacity. When thereare not enough qualified Nigerians to fill certain positions, the company must supplytraining, and for any job held by a non-Nigerian, the operator must provide a succes-sion plan that allows Nigerians to understudyan expatriate for no more than four years,after which the Nigerian will take the position. (http://allafrica.com)

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Frankfurt is the Rhine-Main region’s largest city andboasts a commanding skyline, a large internationalairport, a busy main railway station (ICE trains

throughout Europe), and a diverse culture. All this helpsto make Frankfurt an increasingly popular and accessibledestination for expatriates and their families. In fact,Frankfurt is one of Germany’s most cosmopolitan citieswhere people from approximately 180 different countriesmake up more than one-quarter of the population.

Frankfurt also is Germany’s leading city for internationalprofessionals—with 144 foreign banks, 127 internationalairlines, 85 foreign consulates, and 59 foreign chambers ofcommerce. More than 3,000 foreign companies are locat-ed in the Frankfurt area, and Frankfurt is home to theEuropean Central Bank and the German Stock Exchange.

Frankfurt has emerged as a leading center of financeand commerce and, as such, there is a high volume ofmobility in and around this area. Frankfurt is one of thesmallest metropolitan cities in Europe and has a hugenumber of expatriates all competing for the same desiredlocations, property types, and schools,.

HousingThe housing market in Frankfurt is competitive. This is

not only a result of the large number of expatriates look-ing for rental properties, but also because of the tendencyfor locals to rent. Seven out of 10 “Frankfurters” rent,and this results in high demand for quality properties,which far exceeds the availability on the market.

The most popular residential areas are Westend, theDiplomatenviertel, the Holzhausenviertel, parts ofSachsenhousen, and the Dichterviertel. There are otherareas worth considering, such as Bornheim andBokenheim, which offer good value for money but areslightly further away from the center.

Regarding cost of living, Frankfurt and the Rhine-Mainregion rank in the middle of the international scale. Theamount of rent charged reflects the location and condi-tion of the property—age, standard of the building, andthe surrounding infrastructure all affect the rental price.In central Frankfurt, where the commute to work is gen-erally short and access to schools, shops, and transporta-tion are good, the average apartment will cost between13 to 18 euros per square meter for an unfurnished apart-ment. Bearing in mind the average two-bedroom apart-ment would be 70 square meters, the monthly rental fora good standard property would be €1,200 a month.

Most rental properties are apartments as opposed tohouses and are rented without furniture and withoutappliances, light fixtures, built-in wardrobes or washingmachines, and the like. This could pose problems for peo-ple on short-term assignments who do not want to go to

the expense or effort of fully furnishing an apartment.Occasionally, apartments can be found with built-in-kitchens and bathroom accessories, but these are rare andcommand a higher rental price. We would recommendorganizing furniture rental for assignees who are movingto Frankfurt and rent an unfurnished apartment for sixmonths or more.

SchoolingFrankfurt is well equipped with international schools

but, like housing, the demand for schools is high. Inter -national schools are expensive, with tuition fees costingwell over €18,000 per year. It is crucial to think aboutthis especially if the mobility package does not includeschool fees.

The other choice is to enroll in a local German school.This can facilitate the integration process in a positiveway, but also can cause problems if the German languageis not understood or spoken, Another challenge worthconsidering is that the German school day is short andconsists mostly of morning lessons with children goinghome in the early afternoon. This can be difficult if bothparents are working because they will need to make extrachild care arrangements.

Understanding German CultureBecause of Frankfurt’s geographical situation in the

center of Germany, as well as its historical developments,“Frankfurters” are used to non-residents and are mostlyvery welcoming! Still, it is polite (and useful) to be famil-iar with some of the customs, etiquette, and German lan-guage. It is important to determine if the mobility pack-age includes an intercultural training program becausethis small element could be the difference between a suc-cessful transfer and a failed one. We would also recom-mend taking German lessons because many local peoplewill have only limited English ability. In the workplace,however, English is widely spoken.

No representation or warranty (express or implied) is given asto the accuracy or completeness of the information contained inthis publication, and, to the extent permitted by law, PricoaRelocation Ltd, its members, employees, and agents do not acceptyou or anyone else acting, or refraining to act, in reliance on theinformation contained in this publication or for any decisionbased on it without obtaining specific professional advice.

Employee Mobility Issues in Frankfurt, Germany

Anna Barker is communication and information manager for forPricoa Real Estate and Relocation Services, London, United Kingdom.She can be reached at +44 (0) 208 9961200 or [email protected].

Oliver Clapham is managing director for Clapham GmbH RelocationService, Frankfurt, Germany. He can be reached at +49 (0) 6198 585280 or e-mail [email protected].

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