Case Study: A Silicon Valley Giant Moves Mountains (and Employees)

How effective relocation outsourcing helped Agilent Technologies (a spinoff of HP) build a new, global company.

by Lin Contino, Sarah Fenson

Its March 1999, and Silicon Valley legend  Hewlett-Packard (HP) announces it will  spin off its measurement businesses to form  a new company, Agilent Technologies, Inc.  One of the thousands of decisions to be  made is how to relocate employees around the world  while not disrupting business. Add to the mix 422  relocation suppliers, 40 countries, a fixed budget,  and the loss of the virtual security and enormous  resources of HP, and youve got a good idea of the  challenge at hand. 

 

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. 

 

FAST FORWARD 

 

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  lin_contino@agilent.com.  Sarah Fenson is Leadership  Communications  Representative for  Agilent Technologies.    

Posted May 10, 2004 in Engaged Workforce

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