Message from the President

Greetings, and welcome to the inaugural issue of OneSource Relocation's quarterly newsletter, The Source. We are thrilled to launch our new forum through which we will share important industry trends, insightful analysis of current news, and thoughtful examination of issues affecting those with a stake in the global mobility industry.

Right now, global mobility is shifting and changing in ways which many in the industry have never before seen. Volume is at its lowest levels since 1962 (WSJ, April 2009). The real estate market is described as the most complicated in decades. Those responsible for the recruitment and retention of key talent within organizations are tasked with maintaining a strong work force while containing costs. To be able to make firm, decisive plans around these three areas takes a lot of guts.

Corporate relocation in an economic downturn typically peaks in activity at the beginning of the trough and again in the early stages of recovery. At the onset of a downturn, corporations are calling home key talent as farther flung locations contract. In the middle, when companies are hunkered down, looking for signs of true recovery, activity stagnates. Toward the end of a recession and as confidence, funding and need for talent in expanding locations begin to increase, volume picks up. In our opinion, many economic indicators signal upcoming recovery. However, in the meantime, companies should be thoughtfully examining their current relocation strategy.

It is the perfect time to address policies as well as vendor relationships while movement is somewhat abated. Taking the time to analyze the next chapter in the location of key talent now will aid in being able to implement a plan during the flurry of activity that will inevitably be spurred by recovery. We suggest building the internal now, when it's quiet, so that you will be ready to hire the right people at the right time in the right locations and not be waylaid by poor strategic preparation. Oftentimes, the response to either creating or reevaluating a relocation strategy when there is little activity is: "Why? I am not moving anyone." But, while volume remains low, it is during this time that plans should be made for action when the macrorecovery begins.

At OneSource, we recognize the importance of our role as an advisor to both our transferees and our clients. While this newsletter will provide a snapshot of items we think are significant, please let us know if there are things you have heard about which beg a little further clarification. We are here for you. And, we'd love to have The Source be just the first step in an ongoing dialogue about the issues that matter to you.

Eve A. Seib
President & Managing Partner

Policy Tips...

National mortgage lenders typically do not charge a mortgage origination fee. However they will often take the amount offered in a policy and apply it to discounting the interest rate.

It would be best to contract with a national lender that does not require an origination fee and remove the fee from your policy for new home closing costs. The savings may be used to reduce your bottom line costs or it can be used to cover other costs, which will help the employee sell their home more quickly (i.e. buyer's closing costs or decorating allowance).

Many policies allow for an origination fee of up to 1%, which can equate to significant dollars. If you have further questions about the mortgage side of your mobility program, please contact us at 678-581-2100.

Please visit the Ask The Experts section of our website to get in touch with your source for relocation information.

Relocation Alert

The Challenge of Chinese Drywall

Chinese drywall is one of the hottest issues in the relocation industry. As lawsuits build and environmental agencies try to determine the true health risks, industry professionals, clients and transferees need to be aware of the problem and practice due diligence in inspecting and handling homes where the presence of this product has been detected.

Chinese drywall corrodes copper wiring and metal appliances, usually emits a foul odor and may pose multiple health hazards. While an ammonia or rotten-egg smell may be the first sign of trouble, the odor varies greatly from home to home and the ability to detect the odor varies from person to person. A more reliable indicator is excessive corrosion of electrical wiring and appliances in the home; copper coils in air conditioning units are particularly susceptible. In addition to the obnoxious smell, the tainted drywall is friable, meaning tiny particles could break free from the boards and enter the lungs. In the absence of state or federal remediation guidelines—which may be forthcoming—remediation should be handled cautiously.

Most problems have involved homes built in the wake of hurricane Katrina, when U.S. producers could not keep up with the demand for new home materials. While the problem first surfaced in Florida homes built around 2004, more than 40 states have reported the presence of Chinese drywall; the product has been detected in homes built or remodeled as early as 2001 and cannot be linked to particular distributors or home builders.

According to recent reports in the Wall Street Journal, problems are escalating for homeowners. Many insurance companies are denying claims and canceling policies on homes containing the defective drywall. Insurers consider the problem to be one of material defect, a condition not covered by traditional policies.

OneSource Relocation is on top of the latest legal and environmental news. We will keep you abreast of the most recent developments and work diligently to minimize the risks for you and your employees. If you would like to learn more about this issue, you may wish to contact the Consumer Product Safety Commission (CPSC) or the U.S. Environmental Protection Agency (EPA). Please contact us if you have specific concerns about how this issue affects your relocation policy.

Relocation Trends

According to the 2009 Worldwide ERC "Transfer Volume Survey", between 2006 and 2007, overall U.S. domestic relocation volume dropped 4.0 percent and between 2007 and 2008 transfer activity declined an additional 3.4 percent.

During these years, new hire activity accounted for most of the decline dropping 11.3 percent between 2006 and 2007 and another 5.6 percent the following year. Current employee activity, on the other hand, declined only 2.3 percent overall during the same time.

For 2009, respondents project an overall decline in transfer volume of 16.6 percent from 2008. This projection includes a continued decline in current employee transfer activity, which is anticipated to be 12.4 percent below 2008 levels. The projection for new hire activity shows an even more significant decline of 25.4 percent.

Two-thirds of employees relocated in 2008 were current employees. In addition, 54 percent of transferees were renters and 46 percent were homeowners.

Partner Highlight

Interconex, Inc
A Global Leader in Household Goods
Freight Forwarding

Short term assignments continue to rise. According to national surveys, over 50 percent of survey respondents who used short-term assignments expected to see an increase in the next three years and over 30 percent expected short-term assignment volume to remain the same. The two main reasons cited for the increase in short-term assignments were to provide greater flexibility for employees and control costs for organizations. Among the most significant challenges cited during short-term assignments were family and personal issues and higher-than-expected costs.

Companies may be able to avoid some budgetary challenges by developing formal policies for short-term assignments in regard to shipping personal belongings. Interconex suggests taking a closer look at the suggested allowance regarding the shipment of personal belongs in the company policy. Two points are important for a company's policy: the size of the container allotted and the way in which the cargo is measured.

First, Interconex recommends the following:

• Adult = Type D air container
• Family = Type D air container plus Type LDN air container

The Results Are In:

50 Best Romantic Getaways*

Travel and Leisure Magazine explores 50 top destinations that make visitors swoon and couples fall in love over and over again. From desert hideaways to urban retreats; or if your palate is more suited to wine country, there is surely a destination on this list to pique the romantic in you.

For more romantic adventures click here

*www.TravelandLeisure.com