A closer look on how the current Corona crisis impacts international mobility and the relocation industry
We’ve heard many clients and partners talk about it, so how exactly will the Corona virus impact global mobility and the relocation industry?
It is safe to say that there already have been some short term effects due to interruptions in travel, expats that were called back from affected areas and the overall panic. But what about the overall impact? How does this impact international mobility in the long run?
We’ve heard many clients and prospects talk about the first measures they took to tackle the corona virus during the past 2 months. Some companies chose to freeze their planned international moves, while others took the more radical course of pulling back almost all of their expats. As you might imagine, the latter did lead to the necessary peak at some relocation and business travel agencies, which could be considered as a tiny plus for them.
The total sum might not be positive for the sector on the long run and there is the question of what will happen to all “frozen” or delayed relocation decisions. Will they be aborted altogether, or do they form a backlog of work for the relocation industry? And what about all those expats that were pulled back home in a rush? Companies do not place employees abroad without good reason. So a new peak in workload for relocation and business travel agencies later this year?
It doesn’t require a economics PhD to see that the corona panic is causing the next Economic Crisis, just take a look at the stock exchanges globally. And off course, this will have some long term ripple effects on the relocation industry too.
In times where international travel is under the magnifying glass as being one of the accelerators of the global spread, it made companies think twice about bringing in talent from other countries. Will this crisis have a lasting impact on future hiring decisions?
Another impact that cannot be underestimated, are the effects of unemployment rates. Just like the overall temp labor market, relocations have a direct correlation with shortages in the local talents. If this shortage diminishes due to an economic crisis, it becomes more likely that talents can (also) be sourced on the local labor market and therefore lower the need for source talents elsewhere.
And last, but not least, there is the matter of budgets. If the economy shrinks, budgets will likely join that trend. Cost savings become a major driver in managerial decisions during times of crisis. At Plannr.eu, we believe that technology can be the relocation agency’s best friend to increase cost-effectiveness and reply to their client’s demands.
There have been a series of interesting studies with regards to the impact of the economical crisis in 2008 (). As a result of changing shortages on local labor markets, the composition of the expat population slightly changed with an explicit increase of young Spanish, Greek and Portuguese professionals. Due to a lack of opportunities at home, they started to look outside their own borders. During the same period of time, the influx of other nationalities in Spain and countries got shifted too, due to this decrease in Opportunities. It is not unlikely that local service providers see a shift from inbound to more outbound expats in areas that get struck hardest by an economical crisis.
Will the current crisis in Italy be the precursor of an increased representation of Italian nationals amongst expats? And how will this affect the labor market in China?
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