Posts Tagged ‘Business Relocation’

The Changed Realities of Corporate Relocation: Part One

Tuesday, March 6th, 2012

Recent research regarding corporate relocation has shown five new realities that have impacted and will continue to impact corporate decisions regarding relocation. Two main areas of consideration are workforce availability and real estate development.  When it comes to the current workforce, the realities are all over the place. The population is getting older but more ethnically diverse. Household incomes are lower and more polarized. The 2000’s was the first decade on record in which real median household income declined.

More than a third of U.S. adults held post-secondary degrees in 2008, up from only a quarter in 1990. This has been an important factor that helped propel U.S. economic growth. Unfortunately, the 2010 Census indicated that younger adults in urban areas are not following suit, which is a disturbing trend that could seriously impact the skill set of the workforce. Emigration from metro areas also continues, growing at the rate of three times that of the urban core. This factor will continue to have a significant impact on corporate moving and associated real estate development.

Another reality of the future U.S. workforce is that the last decade was the slowest decade of population growth in 70 years, slightly less than the 1980’s and significantly below the 13.2 percent growth rate of the 1990s. A golden lining to these developments is that the Sunbelt continued to be the beneficiary of the most growth. The lower 9.7 percent rate could be attributed to a variety of factors including homeland security concerns and an economy in recession that drives workers back to their original homes.

Corporate Relocation to the Far East

Monday, February 6th, 2012

Corporations have been flocking to the far east for the past few decades due to cheap labor costs, friendly governments and lax environmental regulations. The specific countries that businesses are moving to, however, seem to be constantly shifting. China remains a stronghold of cheap plastics manufacturing and some high tech. Taiwan was once a juggernaut in high technology manufacturing but has been eclipsed since the rocket like rise of the mainland. Countries like Singapore and Malaysia have had a long steady presence of foreign firms that have helped those countries develop modern cities.

Manufacturing is not the only thing moving to the far east. With increasing education standards and more college graduates than ever, far east countries are producing an unprecedented number of engineers and designers. This means that American corporations are exporting more than just low skilled labor, they are transferring entire design and engineering departments to places like China and Singapore. Increasingly U.S. employees are acting as ambassadors or communications officers for companies that have shifted nearly all of their production processes across the Pacific ocean. Corporate relocation to these areas of the world sees no sign of slowing in the near future.

What Are the Types of Corporate Relocation

Wednesday, January 25th, 2012

Moving jobs overseas is a big talking point in the ongoing presidential campaign. The most talked about sector of the economy that is involved in these corporate relocations is the manufacturing industry. This is because the manufacturing industry has seen a huge exodus of jobs to places in Southeast Asia, Mexico and Latin America. But manufacturing isn’t the only sector of the economy that is sending its operations overseas. Jobs like customer service, engineers and even creative positions like design and writing have found news homes in other countries.

While international relocation of corporate operations is the most popular topic, many facets of business are moving within the United States. These domestic corporate relocations are really just a microcosm of overseas relocations. Businesses tend to move from places with high labor and operating costs to places with low labor and operating costs. This is why many companies move operations from places in the Northeast and California to cheaper and lower taxed areas like the Midwest and Texas. The regions receiving these businesses typically have lower unemployment during recessions and a much higher growth rate during good economic times. If one thing is true, however, is that no place booms forever, as new places always pop up to compete on prices and taxes.

Corporate Relocations Continue

Sunday, December 18th, 2011

Corporate relocations to all parts of  the world have been going strong for the last several decades. Corporations relocate for a variety of reasons including reduced costs and access to superior labor sources. Where corporations decide to relocate, however, continues to change year to year. Southeast Asia, Mexico, and South America in particular have seen tremendous growth in the last decade.High tech companies in particular have been looking for areas of the world rich in cheap labor with lax taxation and friendly governments.

Relocating your business or corporation domestically or internationally is a very strenuous and complicated process. Relocation requires a whole slew of preparation and adherence to the local laws and regulations. When it comes to the physical transport of your business goods, look to a global relocation service that works in corporate relocations. They can help arrange the efficient transfer of all your materials to your new location so that you can focus on more important things like employees and customers.

Corporate Relocations within the U.S.

Thursday, October 6th, 2011

When people think of corporate relocation they often think of companies moving their operations overseas. While this is a common practice amongst many U.S manufacturing operations, companies often relocate their white collar centers and headquarters within the borders of the United States. They do this to take advantage of lower taxes and costs while still retaining the skills of the highly educated American workforce. Popular states to move to include Texas, Arizona and many other warm weather states that are attempting to attract more businesses.

Businesses can have a lot of difficulties relocating their headquarters even if they foresee drastic reductions in costs and increased profits. Many workers will decide to move wherever their jobs move to, but depending on the incentives offered for relocating, many will choose not to. This means that these companies should expect to have to hire and retrain a significant portion of their white collar workforce. With unemployment as high as it is, this may not be as bad a position to be in as it might be in a normal economy.

Many companies are moving to locations where they feel there is more of a friendly business atmosphere for their operations. They are also trying to take advantage of higher educated work forces in places where there are well regarded colleges and universities. Corporations are also attracted to places with general lower costs of living as it allows them to pay their employees less without affecting their lives negatively.

Reasons Corporations Relocate Operations Overseas

Saturday, September 24th, 2011

Corporate outsourcing to international countries has been a popular topic amongst the public and politicians through the past decade. A lot of people may be confused about why companies might relocate their operations overseas. Below is a short list of common reasons given for corporate relocations.

Labor Costs – most workers in international countries will work for less money than their U.S counterparts. This is because cost of living is typically much less expensive overseas and the labor force is not used to increased standards of living.

Taxes – many countries attempt to attract businesses by offering them low tax rates and a generally friendly business environment. Many countries even offer themselves out as sort of a tax haven where corporations can park their money without being chipped away at by the federal government.

Regulations – many companies claim that they move their operations overseas because the regulations are more reasonable in other countries. Manufacturing practices that would not be allowed or that would be penalized in the U.S are allowed to take place without restrictions in some countries.

Talent Pools – a lot of businesses complain that there are simply not enough qualified applicants for open positions within the United States. Whether this is true or not is difficult to measure statistically, but companies will often move to China or India to harness a high tech workforce.

Focus on Core Business – moving manufacturing overseas can allow a company to focus most of its attention on core business aspects like sales and marketing in order to increase revenue and profits.

Reduced Costs – corporate relocations ultimately come down to reducing costs and making more profit, as that is the primary motivator of all for-profit businesses. Relocating overseas has that benefit for many corporations, and they will continue to do so until that benefit expires.

Survey spots more Global Relocation Trends…

Sunday, July 17th, 2011

The latest global relocation trends survey report from Brookfield GRS makes interesting reading for those managing assignees in Brazil, China, India or Russia. The following extracts are taken from it.

When asked to identify the three countries that were emerging as new assignment locations, 15% of respondents ranked China as the most common new destination, followed by India (13%), and Russia (6%). These three countries also were the top three destinations in last year’s report. Furthermore, with only one exception in the history of this survey (when it was ranked in second place), China always has been the most commonly cited emerging destination.
When asked which three countries produced the greatest assignment difficulties for international assignment programme managers, China was cited by 23% of respondents, followed by India (15%), Russia (10%), the US (6%), and Brazil (5%). China, India, Brazil and the US have been among the top six destinations that presented the greatest challenges to program managers since the 2003/4 report, and China has always been cited as the most challenging.
When asked which three countries produced the greatest assignment difficulties for expatriates, China was cited by 20% of respondents, followed by India (15%), Russia (9%), Brazil (4%), and the US (3%). For the fourth consecutive year, the US has appeared on this listing as a leading ‘challenge’ destination, a designation it never held before the 2003/4 report. China, India, and Japan always have been among the top seven destinations that presented the greatest assignment challenges. Finally, with one exception (when it was ranked in second place), China has always been cited as the most challenging destination for expatriates).