Our annual list of the top 13 end-to-end relocation providers.
Its time again for The Bakers Dozen HRO Today’s annual list of the top 13 full-service relocation providers and, undoubtedly, one of our most talked-about lists of the year. Each time that we update one of the magazines annual lists, we try to include extra elements that add value for the reader by not only making the data more accurate but also providing additional data. This years Bakers Dozen is no exception.
The first year we published The Bakers Dozen, we interviewed 10 of the largest relocation providers for their impressions on market size and their top competitors. The list was received with much fanfare and some criticism (mostly from those relocation providers clamoring to be included in next years list.) The second year we published The Bakers Dozen, we interviewed 18 of the largest relocation providers and their clients, and asked them to provide data both on their relocation numbers and on those of their top competitors. The list was again received with much fanfare, readers especially like the input from users of the services and once again, some criticism. This time, it seemed that providers agreed with the overall rankings, but some still felt their total number of relocations were underestimated (a challenge in a market where little data is published and estimates can be off by a factor of 300 to 500 percent.)
So this year, our third year, we added yet a few more elements to the mix to try to come up with the most comprehensive, accurate data on the largest full-service relocation providers.
First, we surveyed 23 of the largest relocation providers, identified through research of databases such as
Second, we asked relocation providers to provide us not only their relocation numbers but also to rank their top 10 to 15 competitors both in terms of number of yearly full-service relocations and in terms of average market size. (The table below explains how that data was used to come up with our final list of top 13 providers.) Our thanks to the many companies who were kind enough to share their in-depth market research, sometimes in the form of very large and complicated Excel spreadsheets!
Third, we once again surveyed clients of these top relocation providers for their input on the providers best services, challenges facing HR executives in charge of relocation, and trends in the relocation market. We also asked the buyers and the providers what metrics they were using to track their relocation services.
All of this work, we hope, adds up to an even more comprehensive, accurate, and useful ranking of the top relocation providers for our readers. So without further ado, on to our third-annual ranking of The Bakers Dozen.
1. CENDANT MOBILITY
Annual number of Full Service Relocations: 115,000
For more than 50 years, Cendant has provided relocation services to corporate, government, and military clients. With a global presence across four continents, Cendant offers employee relocation helping individuals sell and purchase homes, transporting personal belongings, move management, temporary housing, and settling in a new location. And with a new office in
Services: Supporting more than 2,000 clients worldwide. Offer consulting, intercultural training, mobility management, global supplier management, reporting, program administration, and technology solutions for move management. Support for international and domestic relocation includes home sale and home marketing assistance, household goods shipment, property rental management, closing services, home finding and destination assistance, rental assistance, mortgage services, expense administration, policy counseling, consulting, and group move management. Specialized expertise in cross-cultural and language training and global workforce development. Integrated, scalable technology to support international assignment compensation. Relocation management services to membership organizations (members receive assistance with home finding and purchasing, home listing and selling, and moving and mortgage services.)
Most Important Metric: Cendant’s most important metric is simple: whatever metric is most important to their customers. That customer-driven metric varies from client to client. While delivery of outstanding client and customer service is an understood given in any service business, clients key priorities vary depending on their organizational culture and business objectives. For some, it may be controlling costs or delivering cost saving recommendations. For others, it will be integrity, flexibility, or the ability to service a broad global footprint. Cendant uses a rigorous Six Sigma process to identify the critical-to-quality (CTQ) deliverables for each client. Looking at the input overall, the key CTQs for 2004 were: Accessibility, being able to communicate real time with account management through phone or e-mail; Responsiveness responding to client requests for data, reports, updates, etc., in an agreed upon time frame; and Keeping Promises do what you say you are going to do all the time.
2. PRUDENTIAL REAL ESTATE & RELOCATION SERVICES
Annual number of Full Service Relocations: 45,225
Prudential provides global mobility management under their real estate network umbrella. They are involved in domestic and
global corporate relocation, military and government relocation, and consulting.
Services: Domestic Consulting, concierge, partner assistance, policy development, cost accounting, amended value sales, buyer value option, guaranteed home sale, home finding, mortgage, marketing, policy counseling, rental, temp living, and transition management. Global Consulting, candidate assessment, intercultural and language training, global workforce development, compensation administration, cost projections and management, ongoing assignment support, policy counseling, repatriation and reassignment, destination services, education consulting, partner assistance, tenancy management, visa and immigration, short-term assignments, global business briefings, and mortgage. Received high marks for their intercultural training, inventory management, home sale program, policy counseling, program administration global consulting, reporting capabilities, customer service, accessibility and
problem resolution, and realtor base.
Most Important Metric: Client retention (based on customer satisfaction and cost-effectiveness).
Annual number of Full Service Relocations: 43,213
With customized end-to-end relocation and moving services, SIRVA operates in 40 countries and has various partnerships in more than 175 countries. Their recent addition of a client technologies group will provide SIRVA customers with dedicated technology solutions and support. The end of 2004 saw the acquisition of Executive Relocation into the SIRVA network, creating a stronger platform for their services.
Services: Consulting Benchmarking, policy evaluation, cost analysis, program development. Relocation Management Expense management and tax evaluation; group move; internal training; lump-sum benefit administration; Web-based reporting and financial services; quarterly financial review; SLAs; lease cancellation; property management; appraisal values; home finding, marketing, buying, and selling; moving. Departure, home marketing, lease cancellation, agent recommendations, management. Destination Counseling, orientation, home finding, rental, temp living, partner career assistance, concierge. Global Solutions assignment planning and administration, relocation and repatriation, compensation and payroll, tax services.
Most Important Metric: Customer service and performance metrics top SIRVAs list. Their lean Six Sigma quality-assurance
program includes a dashboard of metrics developed for each customer. Through a series of Voice of the Customer roundtables, SIRVA determines which metrics are critical for each customer. Their customized reports are tracked internally and reviewed often with customers. This is a key metric that contributes to their 98 percent customer retention rate. In addition, other important metrics include relocation expense reduction realized for clients through detailed policy review and recommendations as well as the implementation of proprietary products and cost efficient processes.
4. WEICHERT RELOCATION RESOURCES INC.
Annual number of Full Service Relocations: 24,900
After experiencing its best year yet, Weichert continues to hold its own in the relocation market. The independently owned company provides service in more than 120 countries, offering a broad portfolio of capabilities, extensive global resources, enterprise-wide service, and integrated technology. Part of the larger Weichert Affiliated Companies serving the finance and real estate sectors, WRRI has a client roster of more than 500 customers.
Services: Assignment management; consulting; cross-cultural and language training; cost-of-living analysis; destination services; lump-sum and financial administration; gross-up processing; group move; home finding, marketing, and sale; household goods and inventory management; mortgage; payroll; policy consulting; property management; rental; repatriation; spouse career services; supplier management; tax services; temp living; tenancy management; visa and immigration.
Most Important Metric: Employee/client satisfaction and year-to-year client cost reduction.
5. PRIMACY RELOCATION
Annual number of Full Service Relocations: 23,394
With solutions that reach from the
Services: Corporate Program, policy consulting, cost projections, immigration, compensation/tax/payroll, expense audit reimbursement, repatriation, reporting. Real Estate home sale, property management, leasing. Destination, culture programs, cost of living analysis, orientation, temp housing. HR Consulting, policy development, candidate assignment, global business assignment, spousal programs, risk management, benefit administration.
Most Important Metric: Client rating of value provided.
6. ROYAL LEPAGE RELOCATION SERVICES
Annual number of Full Service Relocations: 17,000
Services: Consultingpolicy; group move; market, location, and property studies. Departurehome marketing and sale (with guaranteed buyout program); moving coordination. Destinationhome search and purchase assistance; rental; temp living; education, elder care, career, and community connection programs. International relocation programs including orientation and training. Accounting and administrative funds management and invoicing, supplier management, performance reporting.
Most Important Metric: Customer satisfaction, transferee satisfaction, and cost/policy goals.
7. GMAC GLOBAL RELOCATION SERVICES
Annual number of Full Service Relocations: 12,812
With a network that connects through global service centers and relationships in more than 100 countries, GMAC is one of the leaders in global corporate relocation and assignment management services. As a division of GMAC Home Services, the relocation arm is part of the greater General Motors family. GMAC provides domestic relocation program management, global assignment services, and strategic consultancy. More importantly, GMAC provides the tools and technology to allow clients access to current status reports on every employee in the GMAC system. In 2004, GMAC signed a three-year contract renewal with Hewlett-Packard to provide relocation services for HP employees and their families in more than 50 countries.
Services: Global supply chain management and transition management of assignees. Consultingresearch, policy development, joint venture, M&A, workforce reduction, other HR. Domesticcomprehensive program management for departure and destination including financial administration, plus GM vehicle assistance, mortgage, and credit services. Internationalrange of services for host and home locations to more than 110 countries.
Most Important Metric: 97 percent overall client satisfaction rating for 2004.
8. AMERICORP GLOBAL RELOCATION
Annual number of Full Service Relocations: 12,625
With partnerships in more than 150 countries, AmeriCorp handles full-service relocation services anywhere in the world, including assistance with departure, destination, logistics, and administration. Using their own software capabilitiesStrategic Technology Application for RelocationAmeriCorp provides document and financial management, messaging, reporting, estimating, research, and technical support for clients and transferees.
Services: Corporateeducation, policy development, benchmarking, recruiting and retention, reporting, group moves, cost of living analysis. Departurecounseling, needs assessment, lease cancellation. Destinationcounseling, needs assessment, orientation, career assistance, dependant care, pet transport, rental, mortgage, purchasing, home value program, closing assistance. Globalmove manager, single booking agent, freight, audit process. Internationalpolicy consultation, candidate selection, visas, tax and Social Security, property management, transportation of goods.
Most Important Metric: Measurable service and financial improvements for each client every year.
Annual number of Full Service Relocations: 10,375
This global relocation management company is supported by customized technology and systems, seasoned staff, and provides services that cover all aspects of both domestic and international relocation. TheMIGroup is owned by more than 40 members of the management team who provide involvement and personal commitment of the highest order.
Services: Domestic Relocationdomestic destination programs, real estate services, family assistance services, property management, expense administration; International Relocationsinternational destination programs, international moving, international risk management, international spousal career program, expense administration; Client Program Administration; Relocation Consulting.
10. HEWITT RELOCATION SERVICES
Annual number of Full Service Relocations: 10,000
2004 was the year of relocation M&AHewitt expanded their service offerings by acquiring Exult, who had acquired ReloAction the previous year. Hewitt prides itself on being a single-source contact for relocation; they are there from start to finish. Incorporating the ReloAction technology platform, Hewitt can deliver time and cost savings to their clients. The industry is actively waiting for what Hewitt can bring to the marketplace as they begin to expand their relocation services.
Services: Departuremarketing, market value purchase, home buyout. Destinationconsulting, home finding, renting, executive assistance, affordability analysis, mortgage. Administrationoutsourced administration, household goods management, temp living. Relocation Accounting (domestic)cost estimator, expense management, tax reporting, lump-sum administration, closing cost reimbursement, employee loan administration. Consulting (domestic)policy analysis, development, and review; group moves; training. Internationalpre-departure candidate assessment, cost estimate, work permit, home sale, cultural and language training, partner counseling. Otherongoing assignment support, repatriation, international consulting.
Most Important Metric: Transferee satisfaction.
11. PARAGON RELOCATION RESOURCES
Annual number of Full Service Relocations: 8,457
Since their inception in 1987, Paragon has assisted more than 100,000 families with their domestic and global relocation services. They cover
Services: Program Administrationinternational and domestic relocation; global and short-term assignment; recruitment; relocation benefits; home marketing, sale, and finding; property management; mortgage; rental; temp living; spouse assistance; outplacement; transportation of household goods; travel management; tax program. Global Relocationassessment surveys, communications, program and relocation center development, supplier selection, staff augmentation, training, global business entry and expansion management. Group Moveorganization re-engineering, move planning, employee demographic study, communications, orientation, business continuity planning, facility move management.
Most Important Metric: Client-service metric that includes: expense-processing time; household goods claims rates (on-time delivery rates, insurance claim ratios); direct homesale costs; overall service to customer; and client service ratings.
12. EXCELLERATEHRO (EDS & TOWERS PERRIN)
Annual number of Full Service Relocations: 4,500
ExcellerateHRO is the jointly owned HR business of EDS and Towers Perrin. Its Relocation and Assignment Services assumes complete process management responsibility for an organizations relocation operations by helping transferees find the right home, appropriate schools, day and senior care, recreation opportunities, and spousal employment. In addition, they address any cross-cultural and cost-of-living issues that may arise in each transferees new location. The company also offers consulting teams and can reduce the costs associated with moving household goods as well as the tax liabilities created from reimbursement programs.
Services: Global Relocation Management and Technology Suiteprogram administration, supplier selection and management, employee counseling, departure and destination services, expense administration, household goods and property management, group move, vehicle assistance, student relocation. Global Assignmentassignment management, visa and immigration, intercultural services, spouse support, language training, tenancy management, transit insurance. Consultingglobal policy consulting, benchmark studies, trends report, M&A and joint ventures planning, group moves, global HR strategy, and workforce planning.
Most Important Metric: Transferee satisfaction.
13. CORNERSTONE RELOCATION
Annual number of Full Service Relocations: 4,500
Delivering comprehensive relocation programs to corporations, employees, and their families since 1990.
Services: Consultingpolicy development and review, benchmarking, group move. Departurehome marketing, home sale. Destinationhome search, mortgage, temp living, rental, family assistance programs. Globalorientation, settlement services, home search, temp living, cultural and language training, consulting. Accounting expense management and tax reporting, funding, lump-sum administration, closing cost reimbursement. Administrationtransportation assistance and outsourced administration.
Most Important Metric: Client satisfaction and transferee satisfaction.
HR Executives In Record Numbers Attend HR Conference —
Top Issues Include Outsourcing, Diversity, Benefits & Technology
Milford, CT,April 20, 2005 NY HR Weeks conference directors today released recordattendee totals for the 2005 NY HR Week held April 12-14, 2005 at the New YorkHilton, making it the nations second largest HR event. Registered attendeestotaled 3,710, with conference attendees numbering 706. The totals represented a 32% increase overthe 2004 totals, and included a record 106 media attendees.
PricewaterhouseCoopers Trendsetter Barometer interviewed CEOs of 360 privately held product and service companies identified in the media as being among the fastest growing
PricewaterhouseCoopers Trendsetter Barometer interviewed CEOs of 360 privately held product and service companies identified in the media as being among the fastest growing
Firm Continues Growth of HR BPO Business, Signing Eighth Deal Since Close of Hewitt and Exult Merger
LINCOLNSHIRE, Ill. — Hewitt Associates (NYSE: HEW), a global human resources services firm, announced today that it will provide comprehensive HR business process outsourcing (BPO) services to PepsiCo (NYSE: PEP), a world leader in convenient foods and beverages. Financial terms of the deal were not disclosed.
Under a ten-year agreement, Hewitt will provide HR BPO services in the U
LINCOLNSHIRE, Ill.–(BUSINESS WIRE)–Feb. 14, 2005–Hewitt Associates (NYSE:HEW), a global human resources services firm, announced today it will provide human resources services to Marriott International, Inc. (NYSE:MAR). Under a seven-year agreement, Hewitt will provide human resources business process outsourcing (BPO) services, including workforce administration, benefits, compensation, recruiting, domestic relocation, and learning and development services to Marriott’s 133,000 employees
DALLAS, Feb. 14 /PRNewswire-FirstCall/ — Affiliated Computer Services, Inc., (NYSE: ACS – News), a premier provider of business process and information technology outsourcing solutions, announced today that it has been awarded a human resources (HR) business process outsourcing (BPO) contract with Delta Air Lines, the United States’ second-largest airline. The seven-year agreement is valued at $120 million.
Under the terms of the new HR outsourcing agreement, ACS will provide a broad range of human resource functions for Delta, including compensation and benefits administration, relocation services, recruiting, learning, payroll, HR Information Services, and employee call center services for Delta’s North American employees and retirees
The Industry’s Top Full-Service Relocation Providers
This list was developed by contacting 15 of the largest full-service relocation companies. Participating companies were asked to fill out a questionnaire providing data on their own services and on those of their main competitors. Numbers were averaged to come up with an industry average for each company that was then compared to the companys self-reported data. Although there was some variation between each companys self-reported number of employees transferred (usually higher) and the industry average (usually lower), there was no difference between the self rankings and industry rankings. Thus, the Bakers Dozen was determined
Last Years Rank: 1
Transferred Employees 2003: 82,000
Services: Supporting more than 2,000 clients worldwide. Offering consulting, intercultural training, mobility management, global supplier management, reporting, program admin, and technology solutions for move management. Support for international and domestic relocation includes home sale and home marketing assistance, household goods shipment, property rental management, closing services, home finding and destination assistance, rental assistance, mortgage services, expense admin, policy counseling, consulting, and group move management. Specialized expertise in cross-cultural and language training and global workforce development. Integrated, scalable technology to support international assignment compensation. Relocation management services to membership organizations (members receive assistance with home finding and purchasing, home listing and selling, and moving and mortgage services.)
CENDANTS BEST 3 SERVICES:
1. Ability to provide single-source,one-stop solution with total, end-to-end support for the mobility process
2. Self-service Web portals
3. Online, global T&E system
Prudential Real Estate & Relocation Services
Last Years Rank: 2
Transferred Employees 2003: 41,000
Services: DomesticConsulting, concierge, partner assistance, policy development, cost accounting, amended value sales,buyer value option, guaranteed home sale, home finding, mortgage, marketing, policy counseling, rental, temp living, transitionmanagement. GlobalConsulting, candidate assessment, intercultural and language training, global workforce development, com-pensation admin, cost projections and management, ongoing assignment support, policy counseling, repatriation and reassign-ment, destination services, education consulting, partner assistance, tenancy management, visa and immigration, short-termassignments, global business briefings, mortgage.
PRUDENTIALS BEST 3 SERVICES:
1. Cost tracking
2. Home sale
3. Policy explanation and familiarization to relocating employees
Weichert Relocation Resources
Last Years Rank: 3
Transferred Employees 2003: 23,000
Services: Assignment management; consulting; cross-cultural and language training; cost-of-living analyses; destination services; lump-sum and financial admin; gross-up processing; group move; home finding, marketing, and sale; household goods and inventory management; mortgage; payroll; policy consulting; property management; rental; repatriation; spouse career services; supplier management; tax services; temp living; tenancy management; visa and immigration.
WEICHERTS BEST 3 SERVICES:
1. Tax services
2. Expertise with home sales program
3. Reporting capabilities
Last Years Rank: 5
Transferred Employees 2003: 21,000
Services: Corporate ProgramPolicy consulting, cost projections, immigration, compensation/tax/payroll, expense audit reimbursement, repatriation, reporting. Real EstateHome sale, property management, leasing. DestinationCulture programs, cost of living analysis, orientation, temp housing. HR ConsultingPolicy development, candidate assignment, global business assignment, spousal programs, risk management, benefit admin.
PRIMACYS BEST 3 SERVICES:
1. Web-site technology
3. Expense services
Last Years Rank: 6
Transferred Employees 2003: 20,000 (With an additional 100,000 assisted through SIRVA moving companies.)
Services: ConsultingBenchmarking, policy evaluation, cost analysis, program development. Relocation Management Expense management and tax evaluation; group move; internal training; lump-sum benefit admin; Web-based reporting and financial services; quarterly financial review; SLAs; lease cancellation; property management; appraisal values; home finding, marketing, buying, and selling; moving. DepartureHome marketing, lease cancellation, agent recommendations, management. DestinationCounseling, orientation, home finding, rental, temp living, partner career assistance, concierge. Global Solutions Assignment planning and admin, relocation and repatriation, compensation and payroll, tax services.
Last Years Rank: 10
Transferred Employees 2003: 16,000
Services: GlobalCustomized Web site/Internet-tracking system, plan admin, candidate assessment, cultural and language training, home finding, household goods transportation, repatriation. CorporatePolicy review and admin, group move, tax grossups, equity advances and funding, expense tracking and reimbursements. DepartureMarketing assistance, buyer value option, home sales, household goods transportation. DestinationHome finding, mortgage assistance, temp living.
GMAC Global Relocation Services
Last Years Rank: 7
Transferred Employees 2003: 15,000
Services: GlobalSupply chain management and transition management of assignees. ConsultingResearch, policy development, joint venture, M&A, workforce reduction, other HR. DomesticComprehensive program management for departure and destination including financial admin, plus GM vehicle assistance, mortgage, and credit services. InternationalRange of services for host and home locations to more than 110 countries.
Royal LePage Relocation Services
Last Years Rank: New to list
Transferred Employees 2003: 13,000
Services: ConsultingPolicy; group move; market, location, and property studies. DepartureHome marketing and sale (with guaranteed buyout program); moving coordination. DestinationHome search and purchase assistance; rental; temp living; education, elder care, career, and community connection programs. InternationalRelocation programs including orientation and training. Accounting and AdminFunds management and invoicing, supplier management, performance reporting.
AmeriCorp Global Relocation
Last Years Rank: 8
Transferred Employees 2003: 9,000
Services: CorporateEducation, policy development, benchmarking, recruiting and retention, reporting, group moves, cost of living analysis. Departure Counseling, needs assessment, lease cancellation. DestinationCounseling, needs assessment, orientation, career assistance, dependant care, pet transport, rental, mortgage, purchasing, home value program, closing assistance. GlobalMove manager, single booking agent, freight, audit process. InternationalPolicy consultation, candidate selection, visas, tax and Social Security, property management, transportation of goods.
Paragon Relocation Resources, Inc.
Last Years Rank: 9
Transferred Employees 2003: 8,000
Services: Program AdminInternational and domestic relocation; global and short-term assignment; recruitment; relocation benefits; home marketing, sale, and finding; property management; mortgage; rental; temp living; spouse assistance; outplacement; transportation of household goods; travel management; tax program. Global RelocationAssessment surveys, communications, program and relocation center development, supplier selection, staff augmentation, training, global business entry and expansion management. Group MoveOrganization re-engineering, move planning, employee demographic study, communications, orientation, business continuity planning, facility move management.
PARAGONS BEST 3 SERVICES:
3. Employee relationships
Last Years Rank: 4
Transferred Employees 2003: 8,000
Services: DepartureMarketing, market value purchase, home buyout. DestinationConsulting, home finding, renting, executive assistance, affordability analysis, mortgage. AdminOutsourced admin, household goods management, temp living. Relocation Accounting (domestic)Cost estimator, expense management, tax reporting, lump-sum admin, closing cost reimbursement, employee loan admin. Consulting (domestic)Policy analysis, development, and review; group moves; training. International Pre-departureCandidate assessment, cost estimate, work permit, home sale, cultural and language training, partner counseling. OtherOngoing assignment support, repatriation, international consulting.
Last Years Rank: 11
Transferred Employees 2003: 7,000
Services: Global Relocation Management and Technology SuiteProgram admin, supplier selection and management, employee counseling, departure services, destination services, expense admin, household goods management, property management, group move, vehicle assistance, student relocation. Global AssignmentAssignment management, visa and immigration, intercultural services, spouse support, language training, tenancy management, transit insurance. ConsultingGlobal policy consulting, benchmark studies, trends report, M&A and joint ventures planning, group moves, global HR strategy and workforce planning.
Cornerstone Relocation Group
Last Years Rank: 12
Transferred Employees 2003: 4,500
Services: ConsultingPolicy development and review, benchmarking, group move. DepartureHome marketing, home sale. DestinationHome search, mortgage, temp living, rental, family assistance programs. GlobalOrientation, settlement services, home search, temp living, cultural and language training, consulting. AccountingExpense management and tax reporting, funding, lump-sum admin, closing cost reimbursement. AdminTransportation assistance and outsourced admin.
CORNERSTONES BEST 3 SERVICES:
1. Policy consulting
2. Total program management
3. Home sale assistance
How effective relocation outsourcing helped Agilent Technologies (a spinoff of HP) build a new, global company.
Its March 1999, and
As we prepared the business case, it became clear that leveraging the variable costs of an outsourced relationship, versus the fixed costs of internal staff, would save us money. Whether we were moving one employee, or 1,000, we had to deliver a complete, end-to-end, international solution. We simply couldnt devote our staff to the day-to-day management of this essential, but non-strategic, role.
Unable to justify the HR staffing levels we were accustomed to at HP, and aware that global relocation management wasnt a core competency, our team evaluated a dozen service providers, ultimately choosing Cendant Mobility for all relocation administration and supplier management. Cendant provided the crucial compliance know-how in each country where Agilent does business and enabled the HR team to focus on other responsibilities.
Outsourcing also allowed us to reduce by 422 percent the number of suppliers we had to manage. We now had only one supplier to manage. Not only were many of our previous suppliers already part of Cendants GlobalNet program, Cendant agreed to manage select, regional providers not in the GlobalNet program that we wanted to maintain in our cadre of suppliers. Many of our direct costs have decreased due to streamlined supplier management and better leveraging capabilities. We were also able to free up IT dollars for core, revenue generating activities by using our providers systems via our own intranet.
The ability to maintain a small internal staff has been a boon to HRs bottom line. As our outsourcing model stabilized, we were able to progressively reduce our internal resources. The current relocation team consists of three part-time regional relocation managers and an expatriate tax manager, each concentrating on vendor management, policy development, exception review, and escalation management.
Today, this team monitors service levels on a quarterly basis, evaluating employee and manager satisfaction via a Web-based survey, and consistently finds that the satisfaction level is climbing and, in some cases, is higher than scores received prior to outsourcing.
Open and frequent communication maintains our productive vendor relationship and outsourcing environment. The relocation managers meet with Cendant account managers weekly to discuss status reports, issues, and opportunities. We also have a monthly global meeting so that policy or process issues can be resolved.
Today, only four years after its inception, Agilent boasts a streamlined relocation team, integrated technology, marked cost savings, increasingly satisfied managers and employees, and an approach that flexes with the ebbs and floods of employee relocations.
By continuing to improve operations by leveraging external competencies and efficiencies worldwide, we are better able to focus on what we do best to retain and gain competitive advantages in the markets we serve. Success in outsourcing has meant success in our core businesses.
Lin Contino is the Global Relocation Manager for Agilent Technologies. You can contact her at firstname.lastname@example.org. Sarah Fenson is Leadership Communications Representative for Agilent Technologies.
Leading companies suggest their top relocation cost-saving ideas.
In todays economic environment, relocation budgets are not protected from the microscopic view of upper managements request for reductions. Companies are seeking creative methods to reduce costs including working with relocation consultants, outsourcing relocation functions, and researching techniques and ideas that present savings without diminishing service.
Runzheimer International, a consulting company with more than 70 years of experience in employee mobility, interviewed leading companies to uncover cost-saving ideas that are being presented to next-level management. If you are currently (or considering) outsourcing your relocation functions, working with a consulting firm, or just looking to make internal changes to save costs, you might want to consider these ideas.
POLICY EDUCATION AND LANGUAGE
The ultimate goal of a relocation policy is to facilitate the companys need to have a valued employee be productive in a new job in a new location by covering the costs associated with the move without over payment. Long gone are the days when no expense was too great if it made the transferee happy. Language in the written policy must set clear parameters in order to reduce over payment and to deter employees from negotiating for more money or assistance.
Relocation professionals should also consider extending policy education beyond the transferee to the hiring managers. One professionals training presentation included review of policy in relation to:
- Cost to relocate employees into the division;
- How inconsistency in delivering benefits creates concerns about discrimination; and
- Why an exception to policy may set precedence for future relocations and hinder the goals of the program.
The training was intended to stop hiring managers from making promises that would not be supported by the company.
INITIATING PAYMENT CAPS
Reviewing your most costly moves may uncover excessive payments to employees. Evaluating these costs may help determine potential caps, and determining a maximum amount for a particular benefit can reduce the companys cost while at the same time treating all employees consistently. One area to consider is loss-on-sale policy.
Loss on Sale
Home market values have continued to appreciate at a faster pace than inflation. As long as this trend continues, loss on sale will not be a topic of discussion. And since it is not currently an issue, now would be a good time to initiate a cap in the relocation policy.
Organizations may implement a cap equal to a percentage of home sale (original purchase), a percentage of the loss, or a flat amount. A common policy may state: Occasionally, due to economic conditions, property values decline. If this causes you to incur a loss on the sale of your existing home, Company may reimburse you for the loss. This vague policy indicates the company would pay for loss on sale regardless of the size of loss; it also does not address capital improvements. Table 1 demonstrates the financial ramifications of this. This is a simple calculation, and it does not address improvements made to the home during the five years.
If the relocation policy addresses loss on sale, clearly defines capital improvements, and notes maximum disbursement, not only is interpretation limited, financial liability is also reduced. A better policy may say: Occasionally, due to economic conditions, property values decline. If this causes you to incur a loss on the sale of your existing home, Company may reimburse you for the loss. Eligibility for reimbursement is based on: the property value at the time of purchase (established by a pre-purchase appraisal, or contract purchase price, whichever is lower); plus contributory value of capital improvements, if any; less the current market value (sale contract). The contributory value of capital improvements, as determined by the appraisers, may be higher or lower than the actual cost of the capital improvements. The maximum compensation for this relocation benefit is 25 percent of your annual pre-move salary. Table 2 shows the calculation for this more clearly written policy. The mid-level manager would be reimbursed for $21,500 and incur a $3,750 loss based on the company-calculated loss on sale. The executive would have a non-reimbursed $19,000 loss, based on the calculation.
Table 3 shows the same example using a percentage of home cost. In this case, the policy would need to be changed to read: Occasionally, due to. The maximum compensation for this relocation benefit is 10 percent of the contract purchase price of the home. In this example, the calculated loss-on-sale benefit for both the mid-level manager and the executive would be within the policy limit.
It is important to compensate for a loss on sale. This information is presented as an example of what organizations are reviewing to protect themselves in regard to the loss-onsale benefit.
CHANGING EXPENSE REPORTING
Replacing direct expense reporting with a lump-sum program is another way for companies to realize savings. A typical lumpsum program bundles all travel, meal, and lodging expenses associated with the home finding, final move, and temporary living benefits.
The typical transferee takes 8 to 12 weeks to relocate and often completes 6 to 12 expense reports. Add the approval process and the cost to prepare the check or direct deposit for the transferee, and a lump-sum program can eliminate both expenses and headaches. Companies interviewed who are not currently using a lump-sum program are looking to start during their next fiscal year.
Some Runzheimer clients who are currently using a Lump-Sum Program are implementing reductions. One company, who averaged $7,600 per lump-sum payment, recently reduced the number of temporary living days from 45 to 30 for homeowners and to 15 for renters. They also reduced the home-finding trip by one day. Because of these minor changes, they expect to reduce the average payout to $6,785 and save an estimated $125,000 in relocation expenses.
One major food processing company has changed their lump-sum program several times since the inception. They started with a calculation that was very generous and, over time, reduced components. The employees continue to be satisfied with the lump-sum amount provided.
Table 4 demonstrates changes made for the homeowner calculation for the home finding trip. Reducing the home finding nights by one was a minor change. Switching from a 5-star hotel to a different class also enabled significant savings. The size of the car was another minimal change that resulted in significant savings.
Table 5 identifies changes that were made to the temporary living portion of the calculation. A majority of the savings are due to the reduction in temporary living days. Efficient arrangements to ship the employees personal vehicle makes seven days of car rental more realistic.
Table 6 demonstrates changes made to the final move. The increase in the threshold used to determine when air travel may be used allows for savings on airfare. Also, the change from the IRS business mileage rate (37.5 cents/mile) to the relocation mileage rate (14 cents/mile) provides for a minor savings in this category.
Going forward, satisfaction among transferring employees should continue to be measured. As transferees are surveyed, companies must evaluate this program to determine if the policy is too lean or if they have an opportunity to make even further reductions.
Cost savings and administration ease are just a few of the benefits of a lump-sum program. Companies adding a lump-sum program may start by offering a choice to their employeeseither direct expense reimbursement or a lump-sum payment. After a test period, companies usually eliminate the direct expense option because a majority (more than 80 percent) select the lump-sum payment over direct reimbursement.
Companies considering initiating policy changes, payment caps, or changes to expense reporting (such as lump-sum programs) may want to speak with a relocation consulting company or service provider about establishing goals and implementing new programs. In an era of increasing globalization and projected declining trained workforce, no one predicts relocation costs will be moving anywhere but up.
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