Trends in economics, immigration and mobility policy

SPEAKER: And you may have noticed, all lines are muted so we can reduce background noise on our call today. However, during our webinar, you will have the opportunity to submit questions if you do have any for our panelists. You can submit those at any time on the Q&A panel on the right-hand side of your Webex screen. You may need to click the little arrow next to Q&A to expand that to submit your question. And we'll address those at the end of our presentation today.

Following the session, in the next few days, we'll be putting together a summary of the presentations that were shared here today. And we'll send that out to all of you via email, along with a link to the recording of the webinar. And you can use that for reference, or feel free to share that with any colleagues who were unable to attend. And now, with that, I'm going to go ahead and turn it over to our host, Meighan, to get us started. Meighan, we can't hear you. Are you muted?

MEIGHAN DUTT: Sorry, I was muted.

SPEAKER: That's OK.

MEIGHAN DUTT: Rookie mistake.

SPEAKER: No problem.

MEIGHAN DUTT: But you could probably see I was talking. So good morning and good afternoon, everybody. Thank you so much for joining us. I'm Meighan Dutt. I'm a client relationship manager here at U.S. Bank. And I'm thrilled to be the one to introduce our three gentlemen that will be speaking today. I want to tell you a little bit about them and their background.

So first off, we're going to have Mark Zandi. Mark is the chief economist of Moody's Analytics, where he directs economic research. Dr. Zandi is on the board of directors of MGIC, the nation's largest private mortgage insurance company, and it's a a lead director of reinvestment fund, one of the nation's largest community development financial institutions, which makes investments in underserved communities. Moody's Analytics, a subsidiary of Moody's Corp., is a leading provider of economic research data and analytic tools.

Dr. Zandi is a co-founder of economy.com, which Moody's purchased in 2005. He is a trusted advisor to policymakers and an influential source of economic analysis for businesses, journalists, and the public. Dr. Zandi frequently testifies before Congress and conducts regular briefings on the economy for corporate boards, trade associations, and policymakers at all levels. He is a frequent guest on CNBC, NPR, Meet the Press, CNN, and various other national networks and news programs.

And after we hear from Mark, we'll hear from Bob Portale. Bob is an executive and relocation professional with more than 30 years of experience in the employee mobility industry. Bob has an extensive background in relocation and has held positions in operations management, account management, and business development. A transferee himself, Bob has relocated several times.

Bob joined RELO Direct as the president and CEO in 2006. Since joining RELO Direct, he has developed the company from a small, regionally-based provider to a robust, consultative global organization with a growing and diverse client base. Through the execution of his strategic business plan, Bob has developed RELO Direct into the partner of choice for global companies in the pharmaceutical, automotive, health care, technology, retail, and US government sectors, amongst others.

And then, we will hear from Dick Burke. Dick is the president and chief executive officer of Envoy. He is responsible for the development of overall company strategy, marketing, sales, finance, business development, and technology, while also managing day-to-day operations. He has vast growth business and management experience, as well as legal services insight.

Prior to Envoy. Dick served as president of apartments.com, where he managed its business operations, including sales, marketing, product development, production, customer service, and technology. During his tenure, the business attained record numbers in customers, traffic, and revenues.

So as you can tell, we have an expert and seasoned group to spend some time with us today. And with that, I will turn it over to Mark to present to us first.

MARK ZANDI: Thanks very much. It's good to be with you. Thanks for the two hours to speak. No-- only kidding. I've got about 15 minutes. So don't fear. Nothing worse than an economist for too long.

I'm going to do two things, quickly. One is just go over my baseline outlook for the economy, kind of in the middle of the distribution of possible outcomes. And then, second, we'll turn to the risks. And given your short focus on the downside risks, as that would be appropriate, I'll focus on some downside risks. OK.

You can turn to the first slide. And I think this nicely encapsulates where we've been and where I think we're headed. This is employment-- jobs, millions of jobs-- monthly, January 2019 through the end of 2024. You can see where history ends and forecast begins. That's the shaded part of the chart.

You can see the recession back March, April of last year-- very severe. We lost 22 million jobs during those two months, a GDP that fell 10%, almost on the nose, peak to trough. And for context, in the financial crisis back a little over a decade ago-- and I thought that was a doozy-- GDP fell 4% peak to trough. So it gives you a sense of magnitude.

You can see we've made our way back. We've recovered 17 million, approximately, of the 22 million jobs we lost. We're still down five million jobs. And you can see policy has been very important. Monetary fiscal policy has been very important in the recovery, going back to the CARES Act.

That was the first major fiscal support package passed in March of 2020. We got a pretty sizable relief package at the end of last year in December, about $900 billion in relief, and then, of course, the American Rescue Plan under President Biden in March of 2021.

And of course, the Federal Reserve has also been key to the recovery-- quantitative easing, short-term interest rates pinned to zero, credit facilities early on to support credit flows. So the policy support has been massive and very helpful in ensuring the economy's navigated the pandemic as well as it has.

You can see where, I think, we're headed. It's an optimistic scenario. It's not going to be a straight line. I think the economy-- and you'll get a sense of this in a minute-- still very closely tethered to the path of the pandemic. And with the rise of the Delta variant, that's done a bit of damage. But I do think there are good reasons to be confident that the recovery will continue.

The three key assumptions. One, that the pandemic, while it's still raging, is headed in the right direction. It seems reasonable that we're going to get additional waves of infections and hospitalizations. But I'm assuming that each wave is less disruptive than the previous wave. So by this time next year, as we move into 2023, the pandemic will be effectively winding down, at least in terms of what it means for the economy.

Second, I'm assuming we are going to navigate through the brinkmanship in Washington that's ongoing today and the next few weeks around the debt limit. Looks like the lawmakers are going to pass a continuing resolution to keep the government open.

But I'm also assuming we will get some additional legislative support, the Build Back Better Agenda. That would include $550, $600 billion in public infrastructure over the next 10 years. And on the table right now is a $3.5 trillion package of spending increases, tax credits for various social programs, and climate risk mitigation. I don't think that's going to get through, but I am assuming a $2 and 1/2 trillion package. So that's part of the outlook, as well.

And then, as you can see for the Fed, I do expect the Fed to begin winding down its quantitative easing, its QE, at the November FOMC meeting and wind that down by this time next year or late '22. And then I think we'll be in a position for the Fed to start normalizing short-term interest rates, which are at the Zero Lower Bound, by early 2023, when the economy, I think, will come into full employment, which would be consistent with an unemployment rate that's in the mid-threes. Just right now, we're just a little over five.

One other point about the baseline is long-term rates. Obviously, they've been pushing up here in the last couple weeks. 10-year bond is trading somewhere just north of 1.5%. I expect it to end the year at 1 and 3/4%, to be closer to 2 and 1/2% by the end of 2022, 3% by the end of '23, and to settle in, long-run, mid-decade, around 3 and 1/2%.

The funds rate will settle in long-run somewhere around 2 and 1/2%. So the spread will be about 100 basis points. But at least over the next 12, 18 months, the yield curve, the difference between long-term and short-term interest rates should continue to widen, which would be supportive, all else being equal, for the bank, for the financial system.

Obviously, a lot of other things going on in the outlook, which we can talk about in the Q&A. But I do want to quickly now turn to the risks. And if you turn to the next slide, this, I think, nicely encapsulates the risks. This is our risk matrix for the US.

Just to acclimate yourself to the matrix, the x-axis, the horizontal axis, is the severity of the shock, of the risk. It's kind of a net present value kind of concept. So it accounts for the severity of the shock and when in the future it's going to occur. The y-axis, the vertical axis, is the likelihood of that shock. Obviously, these are very subjective kinds of assessments. This is my assessment.

So for example, if you look at the southeast corner, you see Treasury Default. So that goes to the debt limit debate. Very low probability of default. In fact, I'd say, hopefully, it's close to zero but very low. But if we do default, that would be cataclysmic, so a very severe shock.

If you look to the northwest part of the chart, you see Forbearance Cliff. That's the ending, or the winding down, of various government supports-- the forbearance on mortgage payments, student loan payments. We ended the rental eviction moratoria, foreclosure moratoria. So that's going to happen.

The lawmakers may kick it down the road again, but that seems like a low probability, even at this point. Excuse me, it's a high probability that, at this point, that they're going to wind this down. But the severity of that shock is now relatively low.

I wouldn't have said the same thing six or 12 months ago. But we've been working through a lot of the problem loans. The number of mortgage loans, for example, that are receiving forbearance, I think, last time I looked, was about 1.2 million. And it's falling fast. That peaked closer to five million back last summer. So there's still a cliff but not nearly as scary-looking as it was not too long ago.

Then, of course, in the northeast part of the chart, this is a high probability and high severity. And that's additional waves of the pandemic. It continues to go to the point that the economy in the recovery is still closely tethered to how the pandemic unfolds.

So let's explore a couple of these risks in more detail, first, the pandemic and then what's going on with fiscal policy. And you can see I've highlighted those risks in the chart so you can see where they are. The government shutdown, that now looks like it's not happening at all, so a very low probability of that happening.

OK, so if you turn to the next slide, the pandemic, the pandemic is still a problem. The Delta variant has done damage in lots of different ways. You can see it here in terms of its impact on consumer confidence sentiment. These are just two different measures of sentiment, surveys done by the Conference Board-- that's the blue line-- and the University of Michigan-- that's the green line.

This is monthly data from January 2019. We just got the consumer confidence measure from the Conference Board yesterday for the month of September. You can see, and I've indexed, I've re-indexed these measures to equal 100 as of February of 2020, so pre-pandemic.

You can see confidence, no surprise, got nailed early on. We've been kind of struggling to get back. And most recently, confidence has really fallen back pretty sharply. In fact, as measured by the University of Michigan survey, which is more centered around personal finance questions, in August that's the lowest reading throughout the entire pandemic.

The Conference Board surveys held up a little bit better because that's a little bit more oriented to questions around the labor market, which is improving very, very quickly. But it, too, has fallen off pretty sharply. And you can see it in consumer spending, travel, has fallen back a bit. Restaurant-- the number of people going to restaurants has fallen. We actually saw employment in restaurants fall in August. I wouldn't be surprised if they fell again in September.

And, of course, the Delta has really re-scrambled, or jumbled even further, global supply chains, particularly because it's been a global issue, particularly in Asia. Southeast Asia, in particular, it hit hard. We saw a lot of chip plants, for example, shut down. And that, clearly, has been a problem for all kinds of manufacturing activity but particularly the vehicle industry, really nailed by the chip shortage, which has just been exacerbated by all this.

And then, the pandemic has also made it more difficult for people to go back to work. So we have a record number of open job positions-- 11 million. That's four or five million more than we had pre-pandemic when the labor market was pretty tight. But nonetheless, we're not filling them, in large part because of the pandemic. People are sick, or they're taking care of sick family members or taking care of kids or elderly parents. It's made it more difficult for them to take those jobs.

Again, my baseline is that we will see more waves of infection, but each wave will be less disruptive than the succeeding one. That's a key assumption. This is a risk. Obviously, the next wave could be ignited by a variant that is more contagious, more virulent, eludes our vaccines. And if that's the case, then my optimism is not going to come to pass. This is very important.

And then, finally, on fiscal policy, a lot going on here. Today's a big day. It looks like getting over a couple of the hurdles. First, I mentioned, it looks like we're going to avoid a government shutdown, at least for the next couple months. Congress looks set to pass a continuing resolution to provide funding beginning tomorrow, at the start of the new fiscal year. And there is a growing sentiment that the bipartisan infrastructure plan, the $550, $600 billion, 10-year plan, will pass today, which would be encouraging.

And that then leaves two additional things that need to get done over the course of the next three, four weeks. And the most important is the debt limit. The debt limit is this anachronistic law that was put into place a hundred years ago or so to try to force lawmakers to be more focused on fiscal discipline. It has not worked, and it's just created all kinds of havoc.

And if it's not increased-- there's a lot of uncertainty about this-- if it's not increased by as early as October 15, probably as late as early November, somewhere in there, the government will default. Someone will not get paid, whether it be a bond holder or social security recipient or someone in the military.

And that would be cataclysmic. So that's not going to happen, I don't think. It's a little bit tricky because it's going to be done in reconciliation with only Democratic votes. And that could get complicated. But I think that'll be increased.

But that'll do some damage. The brinkmanship is not going to help. And the fact that the Democrats are going have to do this alone means that, going forward, all debt limit increases are going to have to be done by the party in power. So this is going to make it even more complicated in the future.

Finally, if you turn to the last slide, the fiscal support packages, including the infrastructure and the reconciliation package. Just to give you a sense of what this means is this chart, which shows the unemployment rate quarterly Q1 2019 through the end of 2024 under different scenarios. This is based on simulations, or a model of the global economy.

You can see the blue line, that's what the unemployment rate would have been had there been no additional fiscal support under Biden, so no American Rescue Plan. So that shows that, in 2021, this year, unemployment would have no longer improved. It would probably rise a little bit. It'd be an uncomfortable year. We'd ultimately get on track as the pandemic winds down. But it'd be a much more painful kind of path.

The red line represents unemployment under the American Rescue Plan with no other support. And that shows the unemployment rate a relatively low level, but we don't get back to full employment, which, as I mentioned earlier, is around 3 and 1/2%. You kind of hang above full employment throughout the forecast period.

And then the baseline is the green line. That's the American Rescue Plan plus the infrastructure plan, which, as I said, I think will get passed today, and then a $2.5 trillion reconciliation package, which would include various spending on social programs and tax credits, the climate change.

And that would be 2/3 paid for over the next 10 years and roughly paid for over the next 15. You can see that allows the economy-- the green line-- to kind of settle in right on tarmac. That would be a pretty good picture. That's my baseline.

And then, just to round it out, if they go for the $3.5 trillion package on the table, that would be overdoing it. It would push the economy beyond full employment. Inflationary pressures would develop. Federal Reserve would have to respond. That would be kind of a classic business cycle and could end up in recession.

So that probably would be too much. So yeah, the baseline is we get the green line. The risk is we get something else that isn't quite as good and lands us in a less positive place.

OK, I'm going to stop there. Obviously, there are a lot of other risks consider, both on the downside and the upside. But I'll see if you have questions in the Q&A later in the conversation. So thank you.

MEIGHAN DUTT: Thank you, Mark. Really interesting stuff, and let's hope any future waves remain less destructive than Delta. So next up, we have Bob Portale. And he's going to talk to us about some mobility trends. I'll hand it over to you, Bob.

BOB PORTALE: Great. Thanks, Meighan. And you guys can hear me, correct? Terrific.

MEIGHAN DUTT: Sure can.

BOB PORTALE: All right. The first thing I'd like to really address and maybe just go in a slightly different direction than economics, and that is to really talk about this industry as a whole. And one of the things that I'm often asked, running a relocation company, either in my normal networking circles, friends, et cetera, people will say, well, how's business? And I think it's safe to say, for any of us in just about any industry, that answer would probably involve something to do with the pandemic in some way, shape, or form.

But I think it's also important to say that, as I've looked at this industry-- and I've been in it now for 30-plus years-- and really felt, prior to the pandemic, that I had seen just about everything that there was to see and that there was a lot of cyclical nature to our industry, boy, was I wrong. And so the way I would describe our industry today is really an industry in crisis.

And I don't use that word lightly, but it's an industry that's being impacted, truly, by everything from, obviously, COVID but all of the national and global economic impacts of it. Certainly, you've heard everything about supply chain and its impacts on everything, including relocation.

There's also an issue of talent. We've talked about in the news, we've heard about the Great Resignation and all of those things about talent and talent retention. And then, of course, real estate. It was a great year for real estate professionals. But it was also a year that provided a lot of stress.

But the most important impact to our industry relative to the stress and crisis that's being created really are the people themselves. And by that, I mean if you look at the state of the world today-- and actually, we had the great fortune, I think, of having a talk-- one of our deans of learning at our parent organization gave a great talk recently. And it was really around stress and mental health within the workplace.

And it got me thinking, really, a lot about relocation professionals are really, in a lot of ways, crisis counselors. They're dealing with transferring families in some of the most stressful times they can be under. Now let's think about people in general and the state of the world today.

We're dealing with a state of the world where people are living in a constant state of uncertainty. Even with the economic predictions that Mark provided before me, you could see that, again, there were variants there and variables there that would lead to possible areas of uncertainty. And that is something that absolutely translates throughout our population.

We're also in an area at a time of oppositional thinking. It's either left, or it's right. It's up, or it's down. It's right, or it's wrong. And that's creating, again, this conflict that's constantly happening. We're also seeing increased depression and anxiety. That's, again, throughout all segments of our population, whether it be the youth or the elderly, people are dealing with the factors of where we are today in challenging ways. And then, there's also just a general decreased frustration tolerance. We have less patience for others.

And so all of this is really putting downward pressure on a lot of the factors in actual counseling that takes place in our industry. So I'm going to hit on a couple of those things today. But obviously, supply chain disruption is one of those stressors. You can't turn to any news channel today-- and, again, as I was preparing for this presentation, I was laughing somewhat because a lot of the comments that I was hoping to make, well, there was a new news story, so I was able to grab that.

But the bottom line here is our supply chain is truly in crisis. And it's not just the port crisis, but certainly, that is part of it. If you're looking to transfer household goods and you're looking to do it overseas, it's going to take a long time.

You heard in my bio that our organization is a US government contractor. And one of the things that we have to do is transfer the goods of US government employees, where international transfers are still happening. And one of the requirements that they have, for example, is that these goods be shipped on US flag vessels.

Well, now, try to do that during a pandemic, during a situation where ports are closed or constrained, and you've got goods that have got to go from, say, ultimately from the US to the Bahamas-- not a very far journey. What's ending up happening is those goods are leaving the US, going to Spain on a US vessel, waiting for the next US vessel to take it back to get it to the Bahamas, creating massive, massive delays.

That's just one isolated example, but it's happening everywhere. All of our competitors are citing the same challenges. And again, it is exerting pressure on the overall process, the overall relocation experience.

You also heard, I'm sure, throughout the news that a lot of Americans are self-selecting and are moving. They're going to areas where they have found better cost of living, better education. And their companies have given them the freedom and the latitude to do that.

And in a lot of ways, that's a great thing. It's driven the real estate market, as we all know. But it's also, again, created additional volumes, additional challenges in the supply chain. Again, this great migration has been driven by what I'll call consumer-generated relocations. But ultimately, whether it's sponsored by a corporation or it's consumer generated, they are taking up bandwidth within that supply chain and certainly causing challenges along the way.

The stat that I read at the International Association of Movers said that there were over seven million moves last year-- seven million relocations. And that's up almost a half a million from 2019. So again, we're already dealing with an industry that was constrained.

One of the biggest pre-pandemic challenges was talent. Again, there has been a talent shortage in the American trucking industry for several years now. This pandemic has only exacerbated that. And so that has created, or led to, the next interesting point, which is, where do you find the talent? More and more, we're seeing-- again, depending on immigration policies, depending on all of those things that you see in the news-- where are we going to identify talent?

So the US, in some respects, particularly as it relates to cargo transfer, are looking for drivers abroad. Again, how readily possible is this? But the fact remains that there is a shortage, and it is impacting the supply chain.

So let's talk a little bit now about real estate. So as you might suspect, real estate has done pretty well over 2021. We've seen median sales price increases, as it says here, of 14.9%.

What is happening, though, is we're in a situation of FOMO-- the Fear Of Missing Out. And so, throughout 2021, we've seen the bidding wars take place. We've seen the values increase. It's been driven up, again, to not-previously-seen levels.

What is concerning, though, is that our months of inventory continue to decrease. There's been moderate recovery, seasonal recovery, that you might expect. Again, real estate is cyclical, so as you enter the fall markets, there is usually a bounceback of some type. But the fact remains is that challenge exists.

This slide here will depict that more directly to show, in 2021, for example, most recently, there were nearly three million units sold, yet only one and a half million units are available. And again, you can see that cyclical trend of that rusty orange line showing the seasonal nature as you go through the years. But what you're not seeing is a recovery of units.

So when you think about relocation, you've got more and more employees self-selecting their moves, moving on their own, not being managed by their corporate relocation programs. Those that are going through corporate relocation programs have very little inventory to choose from.

In addition, there has been a new entrance to the market, and that would be the entrance of millennials and younger-generation millennials. They've been predicted for some time now to enter the housing market. I'm here to tell you they're here. And so they're buying homes in great volumes and will continue to do so for the foreseeable future.

But what's also interesting is how this newer generation and the generations that will come after them will be utilizing technology to aid in the purchase of their properties. We know now that about 70%-- 76%-- of all searches are conducted by either their mobile or tablet device. That's all generations, all buyers.

But we also see that about 87% are still using real estate agents. So what it's saying is, while technology is certainly a driver in all of this, there is still a need for service professionals to guide and counsel throughout the process. So relocation, in general-- from our perspective, relocation management companies are counselors-- that need is still there. But the need and the speed with which that need is expected is absolutely increasing.

So when you think about, well, how are these searches taking place, I think this slide also depicts it well. It shows, again, that older millennials and younger millennials, by far, are using their mobile devices for the search of properties. So where I see all of this going is, again, as we think about the consumerization of services-- in particular, we're talking about real estate-- we also are seeing that the drive for instant answers, instant buying, is out there.

And as we talk about this constraint on real estate inventory, it's not surprising that the advent of the iBuyer has come to the forefront. And some of you may be familiar with iBuying. Others may not. And I'll just give you a quick download on it.

It is basically what the relocation industry has been doing since it started 40-plus years ago, and that is buying the property from the owner and turning around and selling it to the eventual purchaser, getting that homeowner out from under that property as quickly as possible. What makes iBuying a little different is those values are determined by algorithms versus appraisals versus real estate analysis, all of those sorts of things. They're using big data and algorithms to really come up with pricing and buyouts for these properties and then turning around and selling it in the marketplace.

There's an interesting video that's out there that got quite popular, actually. And it was a video by a Las Vegas real estate agent who basically said, beware of the Zillows. They're out there trying to buy these properties. And they're doing it to drive up the value of real estate.

And when I first saw the video-- again, it was gaining a lot of traction out there-- I laughed. I actually sent it along to some of my industry colleagues as kind of a ha ha for a Friday funny. And it wasn't long after I sent that out that the CEO of Zillow and some of the others that have been called out in this conspiratorial video was basically saying, does it make sense for a corporation to buy a property and attempt to raise the overall market value by buying properties and selling them for higher values?

Obviously, they debunked it. But what it really leaves us with is it goes back to my original point, which is there's a lack of trust out there among the general population around so many things. And this is creating challenges, again, for the traditional service providers who are providing the traditional services and, again, creating angst and stress where perhaps there wasn't always.

So when I think about the relocation counselors on the front line, I think it's important-- and we, as an organization, have looked at this long and hard-- is we already know that attracting and retaining talent will be a challenge. That, we are aware of.

But what has, again, I think, come to the surface for us is the immense amount of stress our frontline providers are under in, again, every facet of the relocation supply chain, dealing with, again, very demanding consumer or a very demanding-- and rightly so-- very demanding transferring family. And I think it's incumbent upon us to make sure that we create organizations that are open and aware of what's going on and providing avenues to address this as it becomes apparent. So that's my talk, and I will turn it back to Meighan.

MEIGHAN DUTT: Thanks, Bob. Great stuff, and it'll be really interesting, I think, to see in 2021 what that number of relocations ends up being, if it went up to seven million in 2020, of the moves, both self-selecting and corporate. So thank you for all that information. So we'll turn it, now, over to Dick, who's going to talk about immigration trends. Take it away.

RICHARD BURKE: Thank you so much, Meighan. Wonderful to be with everyone today. Thank you for having me. And Mark and Bob, thank you for great presentations and great softball pitches that can help feed me along. So the themes I was jotting down-- talent shortages, anxiety, uncertainty-- it sounds like the world of immigration.

This first chart is really just to give folks a sense of, notwithstanding how traumatic COVID has been and how disruptive the prior administration was with respect to immigration policy, both of those couldn't stand up to the persistent labor shortage for STEM talent. So about eight statistics here. Enormous percentages of countries and McKinseys of the world predicting labor shortages.

Two that really jump out at me right at high noon-- almost 80% of students and grad students in US universities getting master's or doctoral degrees in STEM fields are foreign nationals. And then, go to about the 4 o'clock position and think through those charts that Mark shared with us-- the precipitous increase in unemployment.

Look what happened to STEM unemployment. STEM unemployment started COVID at 3% and, a year into it, had fallen to 2%. And it's against that backdrop that I wanted to share five, six minutes' worth of information around immigration as potentially a way to address that talent shortage.

And interestingly, it can be the talent shortage for more blue collar jobs, like Bob was talking about, in trucking, which is getting quite a bit of attention these days, or the white collar STEM jobs, which is what Envoy does. So Envoy Global helps companies navigate the work authorization process across borders, about a thousand different customers from Fortune 40, promising startups.

And from that, and from a big survey we do every year, the results of which I'll share with you now if I can get this to move-- can you move the page, or should I? Oh, maybe moving it the wrong direction. There we go. So we help about a thousand different companies each year procure work authorization into the United States and into foreign jurisdictions.

And then we partner with Harris and Associates and poll close to 500 HR professionals every year. And those HR professionals are all in the United States, from the largest companies all the way down to small ones, coast to coast. And we get the lay of the land and the current thinking about immigration.

So the first question was, how important is sourcing foreign nationals to your talent acquisition strategy? We were a bit curious as to see what the impact of COVID would be. You think of COVID, two things that happened immediately were border closures and, secondly, hiring freezes.

And notwithstanding those realities, by the highest margin ever in our five years of surveying, foreign nationals were deemed more important than they ever have been to a company's hiring strategy. Again, I think it speaks to the very, very low unemployment rate for STEM talent and this chronic shortage of talent. So one takeaway is if you are struggling to fill positions, you're not alone. But consider the availability of foreign national talent to help address that deficit.

The next question, and this gets back to the anxiety and uncertainty that Bob was speaking about, imagine you're a foreign national in the last four or five years. You've been here. You've been terrified about whether immigration policy changes will make you return home, prevent you from living where you wish, working where you wish.

And so there was a drumbeat of support from foreign nationals, and demands from foreign nationals, for a green card, a green card deemed higher ground, so to speak, in the world of immigration, the ability to be here on a permanent basis. And you can see the impact of what happened from the prior administration and from COVID.

In 2017, about 66% of employers would start the green card sometime in the first three years. The most common path is you start with an H-1B. That lasts three years. And sometime during that period, they'd start the green card.

And now, you can see, fast forward four or five years, and a meaningful jump, from 66% to 81%, of companies starting that green card process early. Why? Labor shortage. Two, foreign national anxiety. And interestingly, within that 81%, a real acceleration to immediate green card sponsorship or within the first six months.

So takeaway number two, if you are in the HR department and you're struggling to fill jobs, beyond looking for foreign national talent, look at what your green card policy is saying. And if you're waiting too long, odds are another employer down the street might have a more aggressive or timely green card policy, which will put you at a disadvantage.

Next chart. There's always a question around green cards. How much do we pay? How much can we have of foreign national pay within the bounds of the law? And you can see an increase in the last few years.

86% of companies paying for everything, a little under half of them insisting on a payback provision, a clawback similar to what you would see in a tuition reimbursement plan. Questions on this-- we always encourage you to speak with counsel because there is some complexity around what can and cannot be paid for by the foreign national.

Moving right along, biggest pain points. I don't think this would be any big surprise. We were curious to see how COVID would impact this-- border and consular closures due to COVID-19. Again, a perfect segue from Bob about uncertainty, anxiety, frustration.

Next up, the anxiety directly-- increase in case denials. They increased fourfold during the prior administration. The current administration seems to be reverting more to the norm, which is a good thing. RFEs, which is a request for evidence, where the approving authority says, hey, listen, we need a little more evidence before we can adjudicate, those almost trebled during the prior administration. They, too, are coming back down. So some good news there.

Two minutes to go. This is a question we were curious about-- the move to remote, how would that impact immigration programs? And the challenges were ones that, selfishly, played to our advantage. Because you had the situation where people scattered to be with home, loved ones, family, friends.

You need to keep track of where your foreign nationals are because that work authorization is tied to a geography. So that was recognized, rightly, as a big concern-- ability to communicate, ability to collect documents, and then collaboration between the tax folks, the immigration folks, and the HR team. Again, we think what this points to is the need for utilization of technology to drive that collaboration and compliance in such unsettling times.

And we'll maybe call it here. One of the three biggest challenges, we covered that one. What would you like to see changed? Unfortunately, we don't foresee meaningful legislative action around immigration. So much complexity, concern around the Southern border, concerns about family-based immigration like DACA, employment-based.

So I think the standstill will continue. As a result, everything will switch over to the executive branch. But the good news is a lot of initiatives that employers would like to see can be impacted by the executive branch-- faster processing times, more visa options for work-based immigration. That could be done with an expansion of the green card program.

Visas to direct employers versus consultants. The consultants use the Infosys and Tata. The administration could do that, lowering government fees. They could do that. So some reason for optimism around the edges. But those expecting this Congress to be able to come up with sweeping immigration reform, I think, are being a bit aggressive and optimistic.

So I've got a few more slides, but I'm going to bypass them just in the interest of time. I suspect folks have questions following Mark and Bob's great presentation. So I'm going to hand it back to you, Meighan.

MEIGHAN DUTT: OK, great. Thank you. You're welcome to take another minute or two if you have something pressing you wanted to talk about.

RICHARD BURKE: Well, I'll go quickly. Canada continues to remain attractive-- no time zone issues, no language issues, very highly educated. If you're not in Canada or thinking about Canada, you're probably in the minority. That's something I would think about.

And then, as global travel resumes, what will be the drivers of that? And it will be, again, tied to the skills gap, the things that Mark and Bob were talking about. Happy to share the entirety of this survey with folks who'd like. And Meighan, I'll defer to you as to how we can get that out there.

But this is about 50 questions trended over five years. And folks who are administering mobility programs, I'd really encourage you to look at it. You can also find it on our website at www.envoyglobal.com. So back to you.

MEIGHAN DUTT: Wonderful. Thank you so much. If anybody has a kid going off to college, it's worth bribing them to go into STEM, for sure. Colleen, do we have any questions?

COLLEEN ROTH: Yeah, sure. So we do have a couple questions. Why don't we go ahead, and I'll look here. So one of the questions we have, I think, Dick, this might actually be a good one for you.

We had a question that was regarding formal green card policies and wondering about the defined criteria for new hires and/or permanent transfer sponsorship. So people are wondering what factors are included, such as cost estimates, top management approval, things like that, so just looking, I think, a little bit more for specifics around green card policy if you have the info on that.

RICHARD BURKE: Certainly. Well, thank you. Thank you for the question and, indeed, a good question. All the benefits the policies provide-- consistency, predictability, not reinventing the wheel, avoiding disparate impact to disparate groups-- apply here.

The advice we give is to work with an attorney, an immigration attorney-- that could be folks affiliated with Envoy Global or anyone else-- to devise a green card strategy. And that strategy should really be starting with the question, is your green card program designed to attract people or to retain people or both? And once you thoughtfully answer those questions, you will help fill out what the contours of your policy should be.

But some of the most common questions are, when will we sponsor? What approvals are required, going up the org chart, to secure? What costs will be borne by the company versus, to the extent permitted, put on the foreign national? Will we have a reimbursement, or clawback, provision? Those are some of them.

But you want to have consistency. Because again, getting back to what Bob was saying about anxiety and distrust and frustration, foreign nationals talk, naturally. And if you're treating them disparately, you're going to have a problem. So retain counsel. Have a policy in hue to it.

COLLEEN ROTH: Great. That's really helpful. Thank you. And I'd just like to remind everybody, if you do have a question, you can submit it in the Q&A panel on the right-hand side of your screen. I have another question here. It might be, Bob, maybe and/or Dick.

I think, Bob, you might have something to say about this. People just wondering, as we talked about the high cost of real estate and perhaps people wanting to work from home more, are you seeing or hearing anything around work-from-home policy changes or companies addressing employees' requirement or requests to work from home?

BOB PORTALE: Oh, absolutely. Certainly, we are seeing all of our clients are reviewing their policies holistically. And the most common response is they are going to a hybrid approach. So with that hybrid approach, there's still the concerns of work location, does it create tax nexus, all of that.

And that's definitely not my area of expertise. But I do know enough that it's something that it does need to be tracked. Having said that, though, from a corporate transfer volume, corporate-sponsored moves, we're not seeing the type of impact you might expect.

Because of the hybrid environment, that has somehow now translated into lower transfers. Because what we are seeing is those mission-critical jobs were mission critical prior to the pandemic and remain mission critical.

RICHARD BURKE: And all I'd add to that is, just as Bob points out the tax consequences, there are immigration consequences. So I alluded to them. Be mindful of that. One of the interesting observations, we did survey, will the ascendancy of work-from-home programs cut into the need for immigration?

And you could argue that, well, gosh, we'll just have the person work from India or China or Brazil. And the reality is the STEM shortage was deemed so persistent and real that work from home would not quell demand for sponsorship of foreign nationals.

COLLEEN ROTH: That's interesting and good information there. Thank you. And I guess I'm just kind of curious, Mark, I know you don't necessarily have insight into policy about work from home, but I'm sure you listen to a lot of calls from corporate leaders. Are you hearing anything about how work-from-home trends are impacting a company's profitability or any corporate leaders weighing in on their views on work from home?

BOB PORTALE: Well, it's mixed. I think there's very strong views on all side of the issue. But judging by overall corporate earnings, it's not having an impact. Corporate earnings are very, very strong and no indication that work from anywhere is having any impact on that whatsoever.

I mean, one thing that is going on is that, while wages and wage growth is strong and accelerating, productivity growth has also improved. So in terms of profitability, it's the difference between wage growth, labor compensation growth, and productivity growth. So if you have strong productivity gains, you can give your workers more pay and still maintain your margins and profitability. And so far, at least, that's what's been going on.

And in my view, remote work is here to stay. I don't think there's any going back. And I think it's just a matter of adjusting to it, going forward. And there's all kinds of adjustment issues and costs. But I think we'll figure those out.

We're only a year and a half into this, and we've made, already, a lot of progress, the Webex problems I had notwithstanding getting on. But we've come a long way. And I can imagine, a year and a half from now, we'll have made a lot more progress to addressing some of, again, the issues and the concerns.

But I think work from anywhere is here to stay. Just one quick statistic to give you a sense of that. Before the pandemic, net out-migration from urban cores of the nation's 400-plus metropolitan areas was about 250k. So 250k more people left urban cores for suburbs, exurbs, and rural areas than came into urban cores.

In the 12 months ending in August, it was 600k and no signs of slowing-- no sign of slowing. So that indicates to me that remote work, this is a fundamental shift in the way we're going to operate going forward. And I think it's a good thing. It's a positive thing for workers and for businesses.

COLLEEN ROTH: Absolutely. It's great. Meighan, we have no further questions if you want to wrap us up.

MEIGHAN DUTT: Sure, great. I think you all see in front of you our invitation. If any of you are attending the global symposium next month, we would very much like you to join us for a complimentary rooftop happy hour. You can hover your phones-- your camera on your phone-- over the QR code, and that will lead you to a website where you can RSVP.

It's a very exciting event. It's taking place at the Chateau Carbide at the Pendry Chicago on the 24th floor. It's just a five-minute walk from the Hyatt Regency. The Chateau Carbide is a stunning new rooftop bar in the iconic Carbide and Carbon Building. It's never been accessible before to the public. They just opened earlier this year.

So we very much look forward to hosting you at this unique and historic location. We will be following COVID-19 protocols for Chicago and is an outdoor event. So please download that QR code, and join us there, if you would. We'd love to see you. And thank you very much, gentlemen, for your time today.

RICHARD BURKE: Thank you, Megan. Thank you.

BOB PORTALE: Yes, thank you very much.

MEIGHAN DUTT: Great stuff.

COLLEEN ROTH: Thank you, Meighan. Thank you to our speakers. And thanks to all of you for joining. This concludes our session today, and we hope you all have a great rest of your day. You may now disconnect.