Engaged WorkforceRelocation

Relocating Success

 As Brookfield Global Relocation Services digests its GMAC acquisition, company president Rick Schwartz positions the provider as a new global giant.
 
By Debbie Bolla
 
Rick Schwartz has been making moves for nearly 30 years. The industry vet in the relocation business started in real estate inventory disposition before working his way up to running and managing Brookfield Global Relocation Services, a 900-employee global firm with more than 40 offices throughout North America, the U.K., and Asia Pacific. Even though he’s had such a storied career, his initial ambition was to go into law or teach after graduating from Arizona State with a degree in history. But for Schwartz, variety is the spice of life, and that’s exactly what the relocation business had to offer.
 
“There’s a very powerful dynamic in this industry. I started at the grassroots level as a counselor on the front lines on a service team, and there I was exposed to so many different facets of the business,” he recalled. “Any given day you could be exposed to a financial issue, a service issue, a family counseling issue, an international issue. And getting to work with such varied and different companies as a service provider, I just found it fascinating.”
 
His tenure in real estate inventory disposition—selling the homes that were acquired during the relocation process—got him hooked. Schwartz found the business and its intricacies interesting and challenging. And timing had worked to his advantage as well. It was the mid-1980s, the industry was growing rapidly, and opportunities were abundant. Schwartz was offered the opportunity to move into a management position in operations in 1984 for Merrill Lynch Relocation. (The firm would later become Prudential in the second half of 1980.) Schwartz stayed with the company for 15 years because he had the chance to excel in several senior level positions and gain some control over strategic aspects of the business.
 
“Ten years ago when I was with Prudential, it was a big company, of which relocation was a small subsidiary [at the time]. This gave us the opportunity to establish our own culture and pursue strategies for success,” he said. “While I’m not aware of the current situation at Prudential, what we were attempting to do was to build a company culture around service, integrity, flexibility, and around the linkage between the kind of internal environment that we would be able to create as an organization and how that translated into high levels of service and the financial benefits.”
 
Schwartz was able to carry that philosophy to GMAC Global Relocation Services (GMAC GRS) in 2003 when he was brought on as president of the business. “I was able to draw on that past experience, and the knowledge of how best to work with a group of people and assemble a management team so we can meet the needs of the marketplace,” he said. 
 
Over the years, Schwartz has learned that success is two-fold. It first comes from developing and building employees who can deliver outstanding service to clients. He said he feels the internal environment for success is a company’s ability to recruit, hire, train, and retain key employees who can delivery day-to-day services at the highest level of customer service to individuals and clients. By achieving this, a company then has the opportunity to develop and maintain long-term clients whose loyalty will further grow the business relationship and a company’s reputation for excellence in the marketplace.
 
“Excellence not just from a service standpoint but also a cost management and cost containment standpoint—that’s what enables us to grow and profit in the long haul,” Schwartz said. “I carried the essence of that philosophy with me when I arrived at GMAC GRS in 2003. That combined with a great international footprint and an ability to deliver global programs in a flexible way to multinational companies has really spurred our growth through the past five years. We doubled the size of the company from 2005 to 2008, culminating in our acquisition by Brookfield in 2008.”
 
The acquisition made headlines in the industry. As former president of GMAC GRS, Schwartz had an insider’s view of the acquisition. The firm made the decision to pursue a sale of the relocation business. Enter Brookfield Residential Property Services. 
 
“Brookfield was already in the relocation business through their ownership of Royal LePage Relocation Services in Canada,” he said. “Brookfield was looking to expand the relocation business into the U.S. and overseas, and that’s exactly where our (GMAC GRS) footprint and marketplace were. It made for a perfect fit.”
 
The acquisition closed in the fourth quarter of 2008, and Schwartz said the company is moving aggressively to rebrand the two firms under the Brookfield Global Relocation Services name. He also noted that Royal LePage Relocation Services is more than just a sister company; it will be rebranded into the new company name later this year.
 
“We are operating as one company with more than 50,000 new relocation initiations around the world each year throughout the U.S., Canada, and internationally,” he explained. “The acquisition has given us a very strong financial partner in Brookfield Asset Management, which is very profitable and stable, which in today’s environment—especially in the relocation business—is a priority and a necessity. It’s a real strength of ours.
 
“Their ability to provide us with additional resources and support with a strong mandate for growth is incredibly exciting at a time when most relocation companies are being very conservative. Under the ownership of Brookfield, we are going forward very aggressively to attract new clients, support our current clients, and invest in even more technology so we can continue to grow and provide great service.”
 
Facing New Challenges
Schwartz conceded that its efforts come at a challenging time. When he spoke with HRO Today, the company had just finished a two-day client conference with discussions on how the global economy is shaping relocation practices. Both home sales and the number of relocations are down significantly.
 
“There’s no doubt that as homes become more difficult to sell, corporations are searching for ways to minimize the cost that’s incurred during the process. Clients are looking for ways to more readily dispose of inventory they do acquire,” he said.
 
This change in economic environment has caused relocation companies to rethink how they do business, and their role has expanded to include helping clients reshape policies. Schwartz said that businesses are asking themselves: Should we continue to offer a full buy-out program? Should we only cover some of the costs? Do we consider temporary housing? Or do we opt out of relocating and hire a viable worker in the new destination?
 
“Clients are struggling with how to balance these issues. As a company and an industry, we need to focus more on helping clients solve these broader policy issues and helping them balance these priorities. We need to do that as much as we need to be providing day-to-day transactions. More and more clients are looking to us to help with these policy issues,” he noted.
 
A growing trend Schwartz sees is that some clients are looking at revisiting a number of policies they had in place in the 1980s and early 1990s, when the real estate market was going through similarly tough times. Currently, companies face the loss of home value in the tens of thousands per property. They must rethink how much loss they can recover, but Schwartz noted that a few clients commented on the new housing initiatives in place through the Obama adminstration. These laws will hopefully spur home buying activity and make it a little easier for homes to move off the market.
 
Temporary housing is more alluring, but Schwartz warned about this option. “It’s not sustainable in the long term considering increases in travel expenses and funding accommodations. At some point it becomes cost prohibitive.”
 
Remaining Optimistic
But Schwartz doesn’t rule out 2009 as a profitable year for Brookfield. Gains may arise from its  international business, where activity levels will remain the same as last year.
 
“Our single largest office is in London,” noted Schwartz. “Our overall strategy is to be the leading provider of the full scope of international assignment management services. It’s a strong growing market in Europe and Asia. More and more companies want a single provider for their North American and international relocation needs. We are in a position to provide a full scope of services.”
 
So Schwartz remains optimistic. Being in the business 30 years has taught him that volume levels will return. He noted that many organizations still have very aggressive global expansion plans, and it’s just a question of how long they will defer them to weather today’s economic storm.
 
“We’re excited as a result of the Brookfield acquisition. We have a great global footprint, and a strong track record of providing excellent service,” said Schwartz, noting that the company twice has been recognized by J.D. Power and Associates as the “Highest in Transferee Satisfaction with Relocation Companies.”
 
“We’re very optimistic of the long-term success of our organization. Yes we’re in turbulent times but we have a very optimistic view in the long term. Better days are ahead,” he said.

Tags: Engaged Workforce, Relocation

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