How a pre-decision program can save money and increase retention.
By Tim McCarney
A globally recognized food company was losing too many key new hires after making significant investments in relocating and onboarding them. The primary reason was that the employees couldn’t sell their homes, even when marketing periods were extended, and they would inevitably have to return to their original departure areas. In other cases, employees took the new jobs only to find out that they couldn’t secure financing to buy a home in the new location, leading to numerous costly temp living exceptions.
The company’s talent management division contacted WRRI to discuss the issue. In analyzing the situation, WRRI concluded that the typical appraisal/market analysis performed before each relocation was not painting the full picture. Specifically, three critical pieces of knowledge were missing up front:
• The realistic price that the employee could expect to receive
for his/her home;
• The current market conditions in the destination location; and
• The amount that the employee could afford to finance.
A New Approach
In response, WRRI developed a pre-decision program that enabled the client to obtain this information on behalf of the candidate, offering three options of varying cost, turnaround times and, level of detail—a full appraisal, a broker market analysis, or an automated valuation—depending on the circumstances or classification of employee. The program also included preliminary counseling, mortgage pre-qualification, a detailed “property fact sheet,” and other due diligence. Once this information was collected, WRRI would review and assess it, explain the financial impact to the employee, and inform the client’s HR department when the process was complete.
Before the program was green-lighted, the company had to address concerns regarding liability; specifically, it did not want to be perceived as using the financial angle as the sole factor in hiring decisions. WRRI worked with the client’s HR and legal teams to develop a process by which the employee was given a written offer, but advised from the onset not to formally accept or give notice to his current employer until the pre-decision process was complete. This was presented as an investment in the individual and his or her family to ensure that they had all of the necessary information to make such a significant decision.
The Hackett Group’s October 2009 report, Performance Study on Talent Management Maturity, helped bolster the business case for the new approach. “Those [companies] that really get the purpose of strategic workforce planning, workforce development, and organizational effectiveness posted earnings before interest, taxes, depreciation and amortization (EBITA) that are 18 percent better than peer group companies and a 54 percent greater net profit margin.”
Clearly, more than some slight improvements in efficiency were at issue:
• Based on the notion that companies focused on talent management could enjoy better bottom line performance, this client was able to leverage the process of pre-decision as part of its strategic workforce planning positions to achieve material cost savings and better profit and financial performance compared to its peers.
• The client’s attrition rate among employees completing the pre-decision program currently stands at zero.
• The client experienced a sharp decrease in requests for exceptions.
• New hires have a more positive onboarding experience, since
the company has invested time and money to assist them in their financial planning/well-being.
• The client has successfully mitigated duplication of recruiting efforts to fill the same position.
• The client has a more accurate budget defined at the onset of the relocation process.
It’s easy to say look before you leap. It’s much harder to truly plan for that leap—to gauge the footing at your point of departure, test the softness of your landing spot, and weigh the pitfalls and unanticipated consequences that might confront the jumper along the way. WRRI’s pre-decision program shows at least one technique for improving the entire experience, from departure to destination.
Tim McCarney is manager of marketing communications at Weichert Relocation Resources Inc.