25/01/2000 - 21:00

Millions wasted on moving

25/01/2000 - 21:00


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AUSTRALIA’S top companies are wasting millions of dollars each year by adopting ad hoc senior staff relocation policies.

Millions wasted on moving
AUSTRALIA’S top companies are wasting millions of dollars each year by adopting ad hoc senior staff relocation policies.

This is the finding of Hamilton Watts International’s Australian Relocation Survey which covered eighty companies.

Main survey findings included:

• Millions of dollars being wasted through poor relocation policies and lack of continuity in management practices

• Relocation activities increasing in numbers, cost and complexity

• A growing number of Australian managers being relocated to Asia

• Middle management is on the move more than are top tier executives

• Australian business is beginning to recognise the importance of relocation management on their bottom line staff’s productivity and performance.

HWI director Peter Jenner said the findings of this survey mirrored the results of a similar undertaking two years ago.

“Companies are moving people more and more and it’s costing them more and more money,” Mr Jenner said.

“There has been a general increase in the movement of staff – largely due to globalisation.

“Companies have to move staff around to stay competitive.”

Mr Jenner said having a third party manage the relocation process could protect staff productivity and performance in new assignments.

“Professional relocation aims to minimise the disruption and uncertainty caused when staff and their families move to new environments – especially overseas,” he said.

“Encouragingly, companies have begun reappraising their relocation policies in the past two years in an attempt to achieve cost savings while providing value added services in the relocation process.”

Mr Jenner said the increase in staff movement had also shown the value of serviced accommodation.

In the Perth CBD alone, there are several serviced apartment complexes either proposed, under construction or in operation.

Mr Jenner said there had been an enormous increase in the use of serviced accommodation when relocating staff.

“In the past several years corporate Australia has woken up to the value of serviced accommodation when moving staff,” he said.

Serviced apartments give the guest most of the comforts of home on a fairly flexible leasing term.

Most feature kitchen facilities. This is particularly attractive to relocated executives with families.

It minimises the disruption faced until a suitable family home can be found.

The HWI survey found key issues for relocatees and their families include schooling, housing, lifestyle, their career after the assignment and cultural differences.

Since the 1997 HWI survey it was found there had been:

• A 66 per cent increase in mortgage interest differential allowance

• A 25 per cent increase in domestic relocation costs and a 33 per cent jump in international relocation costs

• A 36 per cent increase in rental or cost of living differential

• A 35 per cent increase in return trips to the former location

• A 23 per cent increase in

payments to employees for a loss on the sale of their former home

• Also, since 1997 there had been a 20 per cent increase in relocations to the US, a 14 per cent increase in relocations to the UK and a 13 per cent increase in relocations to Asia.

Nearly 60 per cent of companies surveyed reported an increase in the total number of domestic and international relocations – both in and outbound.

Inbound relocations continue to grow from Asia, the US and the UK including a 20 per cent increase in inbound relocations from the US.


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