38 th Annual Corporate Relocation Survey

38th Annual Corporate Relocation Survey Management Summary and Results Charts April, 2005

Table of Contents Section Slide Number Foreword…………………………………………………………………………………….3 Situation Analysis 3 Methodology 3 Management Summary…………………………………………………………………… 4-20 Corporate Profile 4 Factors Impacting Transfers 8 Policy Administration 10 Relocation Costs 11 Employee, Spousal & Assistance Issues 12 Transportation 15 International 16 Respondent Profile 20 Survey Graphs……………………………………………………………………………… 21-119 Corporate Profile 21 Factors Impacting Transfers 41 Policy Administration 45 Relocation Costs 53 Employee, Spousal & Assistance Issues 63 Transportation 79 International 93 Respondent Profile 108 2

Foreword Situational Analysis • Atlas World Group conducts corporate relocation issues research on an annual basis. This is the third year the study has been conducted via the Internet. Invitations to participate in the survey were sent to mailing lists of selected relocation-related publications and associations. In order to qualify for the survey, a respondent must: 1) have relocation responsibility and 2) work for a company that has either relocated employees within the past two years or plans to relocate employees this year. • For the 38th Annual Corporate Relocation Survey, Atlas World Group utilized OpinionWare, a software tool developed by SilkRoad Technology for building and conducting survey research on the Internet. Methodology • For the year 2005, 330 surveys were completed by qualifying participants online from January 26 through March 7. Multiple choice questions add to 100% (+/- 1%) due to rounding. Other questions totaling above 100% are due to multiple responses. 3

Management Summary • Corporate Profile • Forty-six percent of the companies involved in this study employ less than 500 salaried workers, under one-third (31%) employ 500-4,999 salaried employees, and under one quarter (23%) have 5,000 or more salaried employees. • Service and Manufacturing/Processing companies were the most highly represented business classifications in this study (44% and 36%, respectively). • Roughly half of participating companies are international (47%). Large companies (5,000+ salaried workers) surveyed are more likely to be international, as nearly twice as many large companies (70%) are international than small companies (34%). The percentage of mid-size firms indicating they are international dropped slightly from last year, from close to two-thirds (64%) of participating firms to around half (48%). • The median annual sales range for all companies involved in this study is $100-$499 million. The median annual sales range for companies with less then 500 employees is $26-$99 million, while for companies with 500-4,999 employees it is $500-$1 billion, and for companies with more than 5,000 employees it is over $1 billion. 4

Management Summary Corporate Profile (cont.) • Forty-seven percent of the companies surveyed indicated approximately the same number of employee relocations in 2004 as they did in the previous year. Forty-one percent indicated they saw increases over 2003 volume, while 12% indicated relocations decreased from 2003 levels. Unlike last year, company size appears to have been a factor in 2004 relocation volume, with about half of mid-size and large firms reporting increases, and the majority (60%) of small firms indicating 2004 volume was the same as 2003. Companies surveyed reported a median range of 10-19 employee relocations in 2004 (small companies reported a median range of 1-9, mid-sized companies 20-49, and large companies 200-399). • Around fifty percent of the mid-size and large companies surveyed had more money for relocations in 2004 as they did in the previous year. For small companies, about a third (34%) indicated that budgets had increased, with just 10% of all companies responding indicating their budgets decreased. 5

Management Summary Corporate Profile (cont.) • One-third (33%) of firms responding anticipate an increase in the number of relocations in 2005, which is the same percentage of those who expected an increase in 2004. Also, 32% of respondents expect relocation budgets to increase in 2005, which is similar to the percentage (29%) who thought so last year. Company size appears to be playing a role in projections for 2005 as well, with almost half of large firms indicating they expect relocation volume to increase in 2005, while less than a third of mid-size and small firms indicate they expect increases. • Similar percentages of firms to last year expect relocation volume and budgets to remain the same, and the percentage of firms that expect a decrease in these areas has also held fairly steady. Only 16% expect a decrease in relocation volume, the same percent as last year. Correspondingly, only 14% expect relocation budgets to be lower this year than last, down even slightly from the 18% of firms who last year expected decreases. 6

Management Summary • Corporate Profile (cont.) • Seventy-six percent of the companies surveyed have a formal relocation policy. Companies with 500-4,999 and 5,000 or more employees are more likely to have a formal relocation policy than are smaller companies (97% of large and 85% mid-size companies vs. 59% small companies). • Over 4 out of 5 (82%) of the large companies surveyed have a centralized relocation department, similar to 85% of mid-sized companies and 83% of the small companies. Most of the companies’ centralized relocation departments are responsible for managing domestic relocation programs (79%) and controlling household goods carrier selection (66%). • At 52% of the companies surveyed, the company is the sole selector of the household goods carrier for the employee’s move. • Thirty-two percent of the companies surveyed allow the employee some say in the household goods carrier selection, but employees of small companies are more likely have this option than those of mid- to large companies (48% of small companies vs. 21% of mid-sized and 16% of large companies). 7

Management Summary • Factors Impacting Transfers • Roughly eighty percent of respondents indicated at least one external factor had a significant impact on the number of employee transfers in 2004. Overall, the “lack of qualified people locally” (48%) was the top reason indicated, followed by last year’s top factor, “economic conditions” (40%). • The impact of “lack of qualified people locally” rose in importance from 37% last year overall. Additionally, significantly higher percentages of large (44%) and mid-size (49%) firms compared to 2003 (23% and 36%, respectively), agreed this had a significant impact on their relocation volume in 2004. • For large companies, competition also appeared to play a greater role in 2004 relocation. Over a third (36%) of large firms indicate one form of competition (domestic or international) had a significant impact on relocation volume last year, which is significantly above the twenty percent who indicated as such for 2003. 8

Management Summary • Factors Impacting Transfers (cont.) • This year, over half of firms, regardless of company size, indicated “growth of the company” as the top internal factor relocation in 2004. While “promotions/resignations” and “ corporate reorganization” are still the second- and third-place internal factors, the percentage of firms indicating “budget constraints” dropped significantly, regardless of company size. • For mid-size and large companies, there was a significant increase over 2003 in the percentage citing “increased production” as a factor in relocation volume in 2004 (20% and 25% vs. 9%, respectively). There was also a significant increase in the percentage of large companies citing “international expansion,” “expansion of facility,” and “acquisitions/mergers” as impacting 2004 relocation volume compared to 2003 (25%, 26%, and 32% vs. 8%, 14%, and 23%, respectively). 9

Management Summary • Policy Administration • Sixty-four percent of all companies outsourced relocation services in 2004. However, only thirty-nine percent of small companies outsourced, while 79% of mid-size companies and 87% of large companies outsourced relocation services. • The services that are outsourced by a third or more of companies responding are: • - Real estate sales (46%) • - Real estate purchase/marketing (42%) • Contract of household goods moving company (38%) • Counseling about the planning/details of moving (34%) • Arrangement of family’s transportation/accommodations (31%) • Orientation tours at new location (31%) • Seventy-eight percent of decision makers say that the Internet was used for relocation-related matters in 2004. The top use was to communicate via e-mail with relocating employees (71%), followed by researching relocation-related matters (45%). Close to two-thirds of large companies also indicated they used the Internet to access their relocation company website for reporting, completing online forms for transferees, and other services. • Companies vary on the amount of time they allow employees to decide on whether to accept a relocation offer. Nineteen percent (19%) of the companies surveyed allow one week or less to accept or decline an offer, 44% of the companies surveyed allow up to two weeks, and 19% allow up to one month to decide. • The majority (81%) of companies surveyed allow the hiring of spouses of current employees. Smaller companies, and this year mid-size companies, are somewhat less likely to hire spouses (77% & 78% respectively); while 93% of large companies said they allow hiring of an employee’s spouse. • Employees are allowed on average 4.9 expense-paid house-hunting days. Spouses of relocating employees are allowed an average of 1.5 expense-paid house-hunting trips. 10

Management Summary • Relocation Costs • The following are companies’ methods of reimbursement of moving expenses of TRANSFEREES and NEW HIRES: • If the TRANSFEREE or NEW HIRE decides to buy a home in the new location, over fifty percent or more of the companies surveyed indicate they will pay for the following moving services: • - 81% to pack all items • - 68% to move an automobile • 58% to more exercise equipment • If an employee decides to rent, roughly fifty percent or more of companies responding cover the following: • 60% offer home finding trips • 60% reimburse/pay for lease cancellation • 48% offer to move one or more automobiles 11

Management Summary • Employee, Spousal & Assistance Issues • The following is the makeup of those employees transferred in 2004. • Thirty-seven percent of companies surveyed indicated that the age range of their most frequently transferred employee was 36 to 40 years of age, and over seventy percent (72%) of the companies surveyed indicated some percentage of the employees they relocated were women. • Nearly 9 out of 10 (87%) of companies indicated some percentage of their relocations involved a trailing spouse who was a wife or female partner, while 3 out of 5 (60%) of the companies indicated that some percentage of relocations had accompanying husbands/male partners. • Forty-one percent of companies surveyed assist an employee’s spouse/partner in finding employment in the new location. Large companies have historically been somewhat more likely to offer spousal assistance, and this year the gap remained close last year’s results: 56% of large companies indicate they provide this assistance versus 32% of small companies. • Overall, the top method of spousal/partner assistance was finding employment outside the company (41%). However, large firms are more likely to pay a job-finders fee than small or mid-size firms, and mid-size and small firms are more likely to find a transferred employee’s spouse employment outside the company. 12

Management Summary • Employee, Spousal & Assistance Issues (cont.) • Over one-fifth (21%) of companies surveyed provide some type of elder care assistance to the transferee. However, the assistance that is provided by companies is minimal, with very few employers allowing the use of pre-tax dollars for outside care or providing moving expense coverage for the elderly relative. • 13% Provide a list of nursing homes and/or day-care centers • 7% Allow the transferee to use pre-tax dollars for outside care • 5% Move the elderly relative who will live with the transferee in the new location • - 2% Move the elderly relative who does not live with the transferee • Only 12% of respondents believe that an employee’s willingness to relocate is never affected by his/her spouse’s employment status, while 45% indicate this is seldom the case. However, 44% believe that an employee’s willingness to relocate is "almost always” or "frequently" affected by the employment status of an employee’s spouse, still significantly above over 2001, 2002 and similar to the last two years (42% in 2003 vs. 42% in 2002, 17% in 2001 and 25% in 2000). Q.31 – Frequency of Employee’s Relocation Being Affected by the Employee Status of His/Her Spouse 13

Management Summary • Employee, Spousal & Assistance Issues (cont.) • Most (71%) respondents said that declining the opportunity to relocate does not hinder an employee’s career. Over half (56%) indicated they had employees decline the opportunity to relocate in 2004; however, only 38% of respondents from small companies indicated this was the case, while 67% of mid-size and 87% of large companies said they had employees decline relocation. • Around 9 out of 10 (87%) respondents said that the number of employees who declined relocation offers did not change between 2003 and 2004. Six percent said that the number of employees declining relocation offers in 2004 decreased and 8% said it increased. • Reasons employees gave for declining relocation in 2004 were: • - Family issues/ties (76%) • - Spouse’s employment (49%) • Cost of living in new location (48%) • No desire to move (43%) • Personal (non-disclosed) (37%) • Housing/mortgage concerns (25%) • Could hurt career (3%) • Other (5%) 14

Management Summary • Transportation • Overall, 61% of companies have contracts with household goods carriers: 38% of small companies, 78% of mid-size companies, and 81% of large companies. • Of those companies surveyed who indicated they had standing contracts with household goods carriers, the average was 2.1 standing contracts with household goods carriers (similar to last year’s 2.2). • About two-thirds (66%) of companies surveyed with carriers under contract specify which carriers are preferred. In 2004, the percentages of companies indicating preferred carriers differed slightly by company size (76% of small versus 62% of mid-size companies and 61% of large companies). • The most important attributes when selecting a carrier indicated by companies surveyed were*: • - Service (85%) • - Price (56%) - Reputation (56%) • - Claims Processing (48%) • - Local Agent(s) (44%) • - Technology (29%) • The most important attributes when evaluating a carrier indicated by companies surveyed were*: • - Service (86%) • - On-time delivery (80%) • - Employee feedback (74%) - Price (62%) • - Claims processing (52%) • - Extra services (33%) • * Top 2 box rating (% of respondents who indicated the attribute was “critically important” (a “9” or “10” on a 10-point scale)). 15

Management Summary • International • Forty-six percent of companies surveyed relocate employees internationally: 30% of small companies, 47% of mid-size companies, and 74% of large companies. • Over one-fourth of these companies indicate they expect increases in international relocation volume in 2005. Small companies are more likely to expect decreases, mid-size and large firms are more likely to expect increases in international relocations. However, over half of companies, regardless of size, indicate they expect 2005 relocation volume to remain unchanged from 2004. • Responding firms indicate roughly one-fifth (19%) of 2004 relocations were temporary (less than 12 months). Overall 23% expect the number of temporary assignments to increase, but these expectations are driven mostly by large and mid-size companies’ expectations. The majority of all firms, regardless of company size, expect unchanged volume in temporary international assignments in 2005. 16

Management Summary • International (cont.) • Of the companies surveyed who move employees internationally, respondents indicated the following additional considerations are part of their international relocation policies: • Additional tax considerations (61%) • Additional leave time (includes at least one visit to US or CAN) (52%) • Allowances for children to attend certain schools (50%) • Intercultural and language training (48%) • Increased allowances for permanent storage (48%) • Additional leave time (47%) • Higher rental housing allowance (32%) • Higher moving allowance (32%) • Extended per diem charges for hotel (21%) • More communication equipment (phones/laptops) (14%) • More leniency on insurance coverage (11%) • Other (6%). • The most important attributes when selecting a carrier for international shipments indicated by companies were*: - Service (89%) - Scheduling (70%) - Reputation (62%) - Price (61%) - Third Party (48%) - Technology (39%) • * Top 2 box rating (% of respondents who indicated the attribute was “critically important” (a “9” or “10” on a 10-point scale)). 17

Management Summary International (cont.) • Only 58 percent of companies who relocate employees internationally indicate they outsourced an international relocation service in 2004 (down significantly from 70% in 2003). Of those companies who outsource relocation services domestically, 70% indicate they do so internationally (down from 82% in 2003). • Differences in outsourcing domestically carried over to the international side by company size, as small companies (28%) are much less likely to outsource international relocation services than medium (67%) and large (76%) firms, and medium and large companies report outsourcing a greater variety of their international relocation services than small companies. 18

Management Summary International (cont.) • Over half (54%) of companies do not use electronic data interchange (EDI) interface capabilities on international shipments. • Almost 3 out of 4 companies (76%) offer no assistance to internationally transferred employees’ spouses/partners in finding employment in the new location. • Overall, 47% of companies that move employees internationally reported no international relocations were declined or failed in 2004 (80% of small companies, 46% of mid-size companies, and 21% of large companies). However, 21% of companies responded they did not know why an international relocation was declined or failed in 2004, with mid-size to large companies (23% and 33%, respectively) reporting not knowing more often than small companies (4%). 19

Management Summary • Respondent Profile • Most respondents (76%) work in Human Resources/Personnel departments. There were a variety of different positions held among those who completed this survey – from managers (25%), directors (30%),vice-presidents (16%), and relocation administrators (9%), as well as a myriad of other positions, including a few presidents, department heads, supervisors, coordinators, and others. • A majority of the respondents regularly read trade publications (94%). The most popular publications were*: • - HR Magazine (63%) • - Human Resource Executive(57%) • Mobility(28%) • Employee Benefits News (24%). • Fifty-six percent of the total of employees interviewed belong to a relocation-related association, and over eighty percent of responding employees at large companies belong to one of these associations*. * Note: the responses to these questions may have been influenced by the respondent lists used to gather data for this survey. 20

Corporate Profile Q.1 – Business Classifications of Companies Participating Less than 500 Salaried Employees 500 – 4999 Salaried Employees Total 5000+ Salaried Employees 21

Corporate Profile Q.2 – Is your company… Total Less than 500 Salaried Employees 500 – 4999 Salaried Employees 5000+ Salaried Employees 22

Corporate Profile Q.3 – Participating Companies Annual Sales for 2004 Total Less than 500 Salaried Employees 500 – 4999 Salaried Employees 5000+ Salaried Employees 23

Corporate Profile Q.4 – Number of Salaried (Non-Hourly) People Employed by Company 24

Corporate Profile Q.5 – Number of Employees Relocated in 2004 By Company Size (Salaried Employees) 25

Corporate Profile Q.6 – Compared to 2003, did the number of employees you relocated in 2004… Total Less than 500 Salaried Employees 500 – 4999 Salaried Employees 5000+ Salaried Employees 26

Corporate Profile Q.7 – Compared to 2003, did your 2004 relocation budget… Total Less than 500 Salaried Employees 500 – 4999 Salaried Employees 5000+ Salaried Employees 27

Corporate Profile Q.8 – Compared to 2004, do you anticipate that the number of employees your company will relocate during 2005 will… Total Less than 500 Salaried Employees 500 – 4999 Salaried Employees 5000+ Salaried Employees 28

Corporate Profile Q.9 – Compared to 2004, do you anticipate that your relocation budget in 2005 will… Total Less than 500 Salaried Employees 500 – 4999 Salaried Employees 5000+ Salaried Employees 29

Corporate Profile Q.9a – Number of Employees Relocated in 2004 Within the U.S. Less than 500 Salaried Employees 500 – 4999 Salaried Employees Total 5000+ Salaried Employees 30

Corporate Profile Q.9b – Number of Employees Relocated in 2004 Between the U.S. and Canada Less than 500 Salaried Employees 500 – 4999 Salaried Employees Total 5000+ Salaried Employees 31

Corporate Profile Q.9c – Number of Employees Relocated in 2004 Between the U.S. and Mexico Less than 500 Salaried Employees 500 – 4999 Salaried Employees Total 5000+ Salaried Employees 32

Corporate Profile Q.9d – Number of Employees Relocated in 2004 Between the U.S. and Another Country Less than 500 Salaried Employees 500 – 4999 Salaried Employees Total 5000+ Salaried Employees 33

Corporate Profile Q.9e – Number of Employees Relocated in 2004 Within a Single Foreign Country Less than 500 Salaried Employees 500 – 4999 Salaried Employees Total 5000+ Salaried Employees 34

Corporate Profile Q.9f – Number of Employees Relocated in 2004 Between Two Foreign Countries Less than 500 Salaried Employees 500 – 4999 Salaried Employees Total 5000+ Salaried Employees 35

Corporate Profile Q.10 – Companies with a Formal Relocation Policy* By Company Size (Salaried Employees) * % of companies answering “Yes” 36

Corporate Profile Q.11 – Who Selects The Carrier for Employee Moves Total Less than 500 Salaried Employees 500 – 4999 Salaried Employees 5000+ Salaried Employees 37

Corporate Profile Q.12 – Companies Who Administer Employee Relocations from a Centralized (Corporate) Department* By Company Size (Salaried Employees) * % of companies answering “Yes” 38

Corporate Profile Q.12a - Does your company’s centralized relocation department… * Total *those who answered “Yes” to Q12 / excludes those who “don’t know” 39

Corporate Profile Q.12a – Centralized Relocation Department Duties by Company Size* By Company Size (Salaried Employees) *those who answered “Yes” to Q12 / excludes those who “don’t know” 40

Factors Impacting Transfers Q.13 – External Factors Having the Most Significant Impact on the Number of Employee Relocations in 2004 Total 41

Factors Impacting Transfers Q.13 – External Factors Having the Most Significant Impact on the Number of Employee Relocations in 2004 By Company Size (Salaried Employees) 42

Factors Impacting Transfers Q.14 – Internal Conditions Having the Most Significant Impact on the Number of Employee Relocations in 2004 Total 43

Factors Impacting Transfers Q.14 – Internal Conditions Having the Most Significant Impact on the Number of Employee Relocations in 2004 By Company Size (Salaried Employees) 44

Policy Administration Q.15 – Length of Time Employees Have to Accept a Transfer Offer* Total Less than 500 Salaried Employees 500 – 4999 Salaried Employees 5000+ Salaried Employees * excludes those who “don’t know” 45

Policy Administration Q. 16 – Companies that Allow the Hiring of Spouses of Employees* By Company Size (Salaried Employees) * % of companies answering “Yes” / excludes those who “don’t know” 46

Policy Administration Q. 17 – Respondents were given a list of possible outsourced relocation services in 2004 – the answers received indicate that… Total Services Outsourced Total Percent Outsourced 47

Policy Administration Q. 17 – Services Outsourced to a Relocation Service or Brokerage Firm in 2004 By Company Size (Salaried Employees) 48

Policy Administration Q.18 – Respondents were given a list of possible relocation-related uses for the Internet in 2004 – the answers received indicate that… Total Internet Uses Total Percent Used 49

Policy Administration Q.18 – How the Internet was Used for Relocation-Related Matters in 2004 By Company Size (Salaried Employees) 50

38 th Annual Corporate Relocation Survey