Outsourcing relocation services shifts stress. But it doesn’t eliminate it.
By Dirk Olin
Moving is frequently cited as one of life’s most stressful events—right behind major illness, divorce, or the death of a loved one. It entails changes in houses, schools, and often the very cultural structures of everyday life. The kids can get upset. Major money is at stake. And you don’t want the only remaining photo of Aunt Edna to end up in a ditch off Route 66.
For corporations, the stress inherent in relocation is institutionalized within the HR department and usually in its relationship with an outsourced provider. At shipping giant UPS, that duty falls to John Deak. But there’s nothing harried or brittle in his tone when discussing his company’s relo program.
“We have a 30- or 35-year relationship with Cartus going back to when it was Cendant,” he says. “We went from partial outsourcing with them to a full arrangment in 2003. We looked at others, particularly to see if Cartus’s cost were in line, but we’ve been extremely happy with them. So, all other things being at least close to equal, we were not going to make a change for marginal cost savings.”
If you probed for Tom Zastudil’s assessment of his relo outsourcer in, say, 2006, things wouldn’t have sounded quite as sanguine. The director of staffing and international assignments for the Lubrizol Corporation, Zastudil oversees a workforce of just under 7,000—or roughly 50 times smaller than UPS. So he shuttles fewer employees annually than the hundreds under Deak’s watch. But his 60 yearly moves was causing its share of turmoil.
“Our provider had segmented so much of what they did that multiple people were handling a single account,” he says. “When your employee is worried about their spouse and their kids and their house price and their new location, it’s absolutely critical to have a single point of contact on the other end of the phone.”
Zastudil went shopping. And he found Weichert.
“The cost wasn’t all that different. And that wasn’t my top concern anyway. We’re very close to our employees. And things had gotten to the point where they were calling us about how bad their relo experience had been.”
“We’re very happy,” he says. “What we have that I get very excited about is that an employee can accept a position at a new location, and they now know that we do everything possible. It’s a win-win. And in this market, that’s important. We share the pain of a home price loss—not 100 percent, but they know that it’s fair. The physical move process is fair. They have a comfort level that we are doing everything we can.”
He concludes, “We definitely get many fewer calls from our employees than we used to. I’ve been at this for 12 years, and we once had a boutique firm that did this as well as anyone, but they went out of business. And we have found Weichert to be very close to that.”
Ellie Sullivan, director of consulting services at Weichert, explains how the relo world has changed in the past 18 months. “Loss on sale protections have shifted everywhere. There’s been a drop of 30 percent nationally on the Case-Schiller index. If employees have to sell today, and there’s a loss on sale, five years ago the cap was maybe $25,000 whereas now it’s up to $50,000 or $100,000, for a certain level of employee.”
Of course, as someone who’s been in the relo game for 30 years, Sullivan has seen the universe itself shift. “It’s all faster, cheaper, and more global,” she says. “Everything is instant. People need their info on the run, mobile, presented in a myriad of different ways. They expect a lot more access to web-based information and solutions. And at the same time—you know that ad where the guy says ‘I don’t want to pay a lot for this muffler!’—well, companies don’t want to pay a lot for relocation services, even for their most senior people, their most valuable strategic resources who return benefits to the company.”
And the past year?
“We have fewer relos now,” she says, “but more senior people. And new hires are not as demanding as a CEO or other more senior people.”
By contrast, Deak points out that UPS employees—who are in the shipping business, after all—have high relo expectations at almost every level of employment.
“Our employees are very demanding,” he says. “Think of the business they’re in. It’s not unusual for them to be seeking contact with a counselor three, four times a day.”
As for relo itself, Deak describes Cartus as a partner. “They have to be,” he says. “To meet the candidate needs, the provider has to understand our corporate culture. In this case, that means understanding our employee’s mindset.
We typically have a very small relo window—90 days—and after that UPS buys their house. It’s a rich package overall. Our goal is to get as many of our employees as possible into the top block of satisfaction responses on our post-move surveys. We strive to get that number up. And one thing that we know helps that is not just counselor availability, but frequent, active counselor contact —the provider calling the employee to update them on the close on the new house, the old house, the movement of household goods. And the kids—you have to remember that sometimes they don’t want to go. So no matter how smooth the operation, there’s always going to be a fair amount of hand holding.”
Weichert’s Sullivan explains that any relo provider worth its salt must always bear in mind the life-changing dynamic that underlies the service. It’s a sensibility that must be harmonized with the buyer’s corporate needs and projected in many cases even before a candidate becomes an employee.
“Right out of the gate,” she says, “one of the drivers is the whole brand of the experience that an employee or candidate might feel. Even, or maybe especially, with fewer jobs going around, companies want to get their first choice of candidates. So relo is a way to extend the employment brand. We’re now doing a lot of pre-decision sessions to help the company understand costs and why they want a robust policy, and on the candidate side that can mean providing test trips to their new locations and concierge services for as well—before the employee even becomes an employee. And once they become an employee, it’s all about the speed with which we contact the transferee and the quality and experience level they get from their counselor. They need reassurance that the counselor is an expert who cares, because they’re often experiencing a lot of different kinds of worry.”
In the current economy, she adds, she places a new primacy on expectations management: “There are three or four touchpoints. We have to help them if they have an unrealistic expectation of their home worth. The paper loss can be a rude awakening. We can’t change the value of the employee’s home, and in fact we have a fiduciary responsibility to the employer to value the home right. Then the speed of reimbursing costs comes in. Then household goods—the packing and unpacking process, loss or damage. You don’t want them saying ‘There goes the teddy bear thanks to that nasty driver.’ Fourth is getting them familiar with the destination. And all of this requires a very active counselor who can even preempt their concerns. Then you are far more likely to get a satisfactory experience.”
The benchmarks are clear. “The SLAs are overall cost, employee satisfaction, the metric of how many employees used our website, the expenses reimbursement turnaround, the property resale. We have mutual scorecards with clients, instead of a one-sided SLA, and we try to get them to join our client advisory process.”
And how does she think they’re doing?
“Well, it was Ken Blanchard who coined the phrase ‘ravings fans rate,’ and we’re pretty happy with our ravings fans rate.”