You Say Relocation, I Say Mobility

The relocation services industry oils the wheels of an increasingly globalized and migratory world and has had to transform itself as times have changed.

Take a look at the relocation services industry in Taiwan and you can see writ large the effects of government policy, economic forces, and global mobility trends. The changing job description – from “moving company” to “relocation services” and now “global mobility teams” – emphasizes how this trade has changed with the times. Rather than just being responsible for transporting furniture and kitchenware from one house to another down the road, in another city, or even another country, these enterprises take responsibility for everything involved in transplanting an executive and his family.

The operation is as likely to include assistance with visas, cultural assimilation, and insurance as transporting physical goods. At the same time, the scope of services has expanded greatly to include help in finding a place to live, storing documents, language teaching, and transporting exhibitions or fine art. And the list keeps growing.

relocation-services-industry-taiwanWhile the term “mobility services industry” has not caught on 100%, “that’s essentially what we do,” says Dan Tattersfield, Taiwan country manager for Asian Tigers Mobility, which has 30 offices in 14 countries or territories and an annual turnover of more than US$115 million. “It differentiates from just moving household goods to a more service-oriented approach that includes hunting for schools, leasing cars, opening bank accounts, and arranging for insurance. The whole package, really.”

While major companies used to assign their human resources departments to take care of such matters, the job is now often outsourced to relocation companies because of their specialized services and local knowledge. “It’s definitely a trend,” Tattersfield notes. At the same time, there has been a shift away from shipping three containers of belongings, “along with the kitchen sink,” as part of the package when executives are sent from one side of the world to the other.

“Companies are more mindful of savings, so not offering employees the relocation allowance they used to means those willing to accept less are more likely to be offered the position,” Tattersfield says. “Typically they (employees) will take 500 pounds (227kg) of goods. What we are seeing is the number of shipments is holding steady or going up slightly, but the size of shipments is going down. This is what’s happening and I think it’s going to continue.”

The new business model is for major companies to have contracts with global relocation management companies such as Paragon Relocation and Brookfield Global Relocation Services, says Tattersfield. They then outsource to origin and destination agents. Put simply, they don’t have have the trucks or movers themselves, but they know someone who does.

Another change is that the individual on the move is just as likely to be Asian as Western, Tattersfield observes. “More than 50% of our business is Asians. A huge proportion consists of Taiwanese who were living in the States or elsewhere – they are the perfect candidates to return. It also includes Malaysian-Chinese, Hong Kong-Chinese and Singapore-Chinese. More and more international companies are going with Chinese speakers because of how well they fit in with the company’s needs.”

Taiwanese are migrating as never before – either returning from the United States and Europe, moving there, taking the short trip across the Taiwan Strait to China, or heading for another Asian destination. “Taiwanese are more mobile, more eager, and have fewer requests when assigned elsewhere,” says Tattersfield. “To bring someone from Taiwan back is often cheaper, as they don’t have as much stuff, they have family here, and don’t need relocation services like house finding. I often encounter a situation when a Taiwan person has been allocated a 40-foot container and instead of using up the allowance, they just take their clothes, a couple of suitcases, and the rice cooker because they will probably be living in a serviced apartment.”

Mover loading moving vanHis comments reflect broader changes in the political and economic landscape. In a 2012 profile, the Migration Policy Institute (MPI), a Washington, D.C.-based think tank, characterizes emigration from Taiwan as “driven mostly by the deindustrialization of the country’s interior and massive outflows of human capital and investments to China and ASEAN countries.” The report adds that “emigration to China, in particular, has become prominent in the past decade, though Japan and the United States remain major destinations for Taiwanese migrants as well.” Many major Taiwanese manufacturing companies now do much of their production in China and ASEAN countries, making Taiwan a base for international operations.

MPI notes that an outflow of talent, once seen as a “brain drain,” now tends to be a sign of economic development rather than cause for concern, as individuals return with heightened skills and newfound knowledge, often used to start their own businesses.

Queenie Huang, general manager of Crown Worldwide Taiwan Limited, says Taiwanese tend to be nimble and flexible, so when they move abroad for a job the company generally provides an allowance but lets the employees take care of housing by themselves. Obviously, this arrangement is not such a lucrative proposition for relocation companies as the traditional “expat package,” but it appears to be the wave of the globalized future. At a time when companies have been tending to hire locally, the ability of employees to adapt quickly to a new environment and enable cost savings helps to maintain international hiring as a viable option.

One of the most significant business trends to have affected her business, Huang says, is the number of Taiwanese taking up employment in China, particularly in Shanghai. After decades of total separation, Taiwan entrepreneurs stared investing in China in the late 1980s, to set up factories in the Pearl River Delta region for relatively labor-intensive operations. A second wave of investment followed after 2000, principally in the Shanghai area.

Yet, given the chance, Taiwanese prefer to live in Taiwan “because it’s a better environment,” says Huang. She adds that many people divide their time between the two sides of the Strait, returning to Taiwan for weekends or on holidays. Taiwan remains the permanent residence for most Taiwanese working in China.

As for moves into Taiwan, Huang says the volume was higher during the late 1980s and 1990s due to the large number of Western engineers brought in for major infrastructure projects, such as the Taipei MRT and Taiwan High Speed Rail. More recently, the country’s semiconductor business and high-tech industrial parks have attracted international talent.

According to sources in the relocation services industry, the volume of inward moves had been declining, caused by the global financial crisis as well as the lure of China. However, they report that an uptick has occurred in the past few years. National Immigration Agency figures for 2011 indicate there were about 12,000 American citizens and 10,000 Japanese who were permanent residents in 2011 and about the same number two years later. By January 2015, the numbers had risen, respectively, by roughly 1,000 and 2,500.

A major potential source of future growth for the relocation industry here is the China market, as the Taiwan government gradually eases restrictions on investment by mainland companies and work permits for their executives. Huang’s parent company, Crown Worldwide Group, was founded 50 years ago by the American Jim Thompson in a small office in Yokohama, Japan. Headquartered in Hong Kong, it provides transportation, relocation, logistics, and storage services from offices in nearly 60 countries, including China.

Huang says it is still difficult for Chinese passport-holders to get permission from the Taiwan government to live and work on the island. That policy, she notes, also discourages some Western and Japanese companies from setting up here, as a key factor for any company wishing to invest in Taiwan is how to integrate the Taiwan operation with its regional business plan. Another issue is the higher personal income tax in Taiwan compared with Hong Kong and Singapore. “Taiwan is a great country to live in – it’s got a good environment and is safe and friendly – but without the right conditions, people won’t move here,” Huang says.

She hopes the Taiwan authorities will do more to promote the island as an Asian hub. “This was the idea some time ago and the government really ought to look at it again,” she urges. With Hong Kong and Singapore still viewed by most multinational corporations as the ideal bases for business in Asia, Taiwan needs to up its game to be seen as a viable alternative, she says.

Jim Hill, general manager of Santa Fe Relocation Services Taiwan, says his company’s business tends to be more reliant on the state of the U.S. economy, rather than China or other regional markets. “We’re currently benefiting from a strong U.S. economy, which in turn increases the movement of Americans and Taiwanese.”

He reports seeing an increase recently in the number of expats – most of them single – coming for relatively short-term, project-based assignments. He adds that companies are reducing the relocation allowances they are offering, instead paying for relatively small sea or air shipments “and with very few extra perks.”

His observations jibe with the Cartus 2014 Trends in Global Relocation: Global Mobility Policy and Practices survey that shows families are less likely than before to accompany an executive being transferred, even for long-term assignments. Only 76% of assignments to emerging countries now include family members, a decline from 90% in 2012, at least in part because of cost considerations. One of the main reasons for a failed assignment is that the family is unable to adapt to the new environment.

Cost control was identified by 75% of the survey’s respondents as the top global mobility challenge, above immigration problems and compliance with local laws. While most of those surveyed said the quantity of overseas assignments had remained stable over the past two years, 50% said they expect to see more “mobility” in the next two years, though this includes short-term assignments and extended business travel in addition to longer postings.

Other findings from the survey are that the importance of local hires is receding somewhat, in favor of company individuals having the right training and background for the job in hand. This change could also mean that companies are often having difficulty finding the right talent locally. Meanwhile, language and cross-cultural training have been shown to be important factors in ensuring the success of overseas assignments. The survey found that 54% of expats assigned abroad are over 40 and that the top destination is the United States, followed by China, the United Kingdom, Singapore, and Hong Kong.

“Our clients are more and more requiring truly international relocation companies, which provide transparency,” meaning accountability and openness, Hill observes. “They also look to us to ensure they’re in compliance with local or international regulations.”

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