BenefitsEngaged Workforce

When a Relocation Tests the Boundaries of Policy

What happens when an HR organization face an unusual employee transfer not covered by outsourcing SLAs or company policy? For those who outsource, the answer may lie with the provider.

by HROT Staff

If relocating to a new job in a new town weren’t difficult enough for employees, employees face an even more unsettling prospect in today’s difficult housing market. With homes sales anemic in just about every region of the country, the weakening of the market has served as a double-edged sword for many transferees.

For first-time buyers, the soft real estate market has been a boon as they encounter lower prices, a huge inventory, and flexible sellers who are willing to offer extra incentives to close the sale. Unlike two years ago, prices have fallen and competition for homes has all but disappeared. Factor in the rising tide of foreclosures and it’s easy to see why transferees without properties stand to win big. On the other hand, for buyers who must dispose their existing home, the market couldn’t be worse. Employers are sharing the pain as losses from home-sale programs mount and inventory grows.

And the difficult real estate market is just one challenge many transferring workers and their employers face. From moving home goods to orientating family members to a new environment to managing reimbursement, employee relocation is an especially stressful experience for all stakeholders involved.

That’s one reason why many organizations turn to outsourced service providers for support. Working with client organizations to develop policy and coordinate transfers, relocation companies offer a spectrum of services geared toward just about every situation an employer may face, including slow home sales, moves to and from remote locations, and unique tax consequences.

A few unique Cases
But what happens when the challenges around a particular relocation are so unique that they fall outside the boundaries of policy and conventional protocol? In these cases, how can the sage advice of outsourced relocation service providers help employers address their employees’ needs as well as their own?

HRO Today contacted several providers to recall how they handled their most difficult cases and to describe how they collaborated with client organizations to better prepare them for similar scenarios in the future. What they disclosed was what many practitioners of HRO have come to realize: providers have evolved beyond simply being a vendor and now serve in broader, consultative roles to HR organizations. In other words, services performed sometimes stretch beyond the basic service level agreements specified in contracts.

Then again, providers increasingly are expected to take on value-added duties as a gesture of good faith. To truly be considered a partner to clients, relocation companies must demonstrate a willingness to provide support beyond the ones that they have contracted for.

An Executive Move

Take the case of the CEO of a fledgling technology company. According to relocation specialist Cartus, the executive, who asked not to be named, earlier this year entered the provider’s relocation program with one critical priority: to obtain the equity from his former residence for use on a new home. The only catch was Danbury, CT-based Cartus has only three days to do this because the executive had committed to closing on his new home.

According to the service provider, multiple factors further complicated what would otherwise be a typical request.
• The executive had already assumed his new position and was fully immersed in the demands of his new company;
• The three-day time frame was anything but typical; and
• The task of gathering and finalizing the necessary paperwork—including disclosures and mortgage information—was mostly incomplete.

According to Cartus, very little financial information was available, as even the title search had not been completed at that point. And because the CEO was knee-deep in running the company, coordination of the closing process was largely conducted through his assistant while he tended to day-to-day operations and a hectic travel schedule.

While not typical of most transferees, this case was also not rare because executive relocations often involve many of the same elements, although not under similar deadlines. With a plan already in place for these types of relocations, Cartus immediately assigned a consultant from its Executive VIP team, and a point of communication was established through his assistant.

Unfamiliar with real estate and the relocation process in general, the assistant was not surprisingly anxious at first, realizing the importance of the delegated task and the short time to accomplish it. But the provider’s consultant walked her through the entire process, explaining all the steps needed to achieve the closing.

A special task force was implemented to facilitate communications during and after business hours. This was especially critical because the customer’s spouse was traveling separately out of the country, which required additional ways to obtain signatures on all required paperwork.

When an estimate was requested to expedite the final equity process, the consultant worked with the Cartus accounts payable department to make sure funds were in place for the request—no small task given that the home’s equity totaled more than $3 million.

As part of the communication chain, the relocation consultant also had to confirm with the customer’s personal banker that the wire was received.
After three days’ of frenzied activity, the CEO was able to secure the equity needed to close on his new home without disrupting his work at the start-up business.

Cartus said following the closing the client gave the relocation specialist its highest service rating available for several reasons. Facing a tightly compressed deadline with a high financial requirement, the provider was able to pull together all the documentation and required signatures within three days despite the travel schedule of both the client and his wife.

Although this case might seem atypical, more than ever these days companies are seeing an increased need to provide executive-level support, according to Cartus officials. However, feedback from customers is often less than satisfactory. Industry observers say increased demands on productivity, shorter timeframes, and staffing demands are intensifying business pressures, particularly for those at the very top of the organization.

Add to that the sometimes complex requirements involved in a typical home sale, along with the psychological pressures of the relocation itself, and it’s easy to see why stress levels for transferring executives and their families have reached unprecedented levels, Cartus officials pointed out.

However, relocation providers have also developed executive programs designed specifically to address their unique needs and time demands. As demonstrated in this case, aside from the high financial threshold and the sometimes shortened timeframe, a particularly difficult aspect with any executive move is the absence of the client to participate because of work requirements. In these cases, it’s clear that extra hand holding is expected of the provider, especially because an executive’s negative experience may have a long-term affect on the relationship between the vendor and the client HR organization.

Doesn’t fit the mold

Relocation challenges are myriad in complex, demanding moves, but they can also crop up unexpectedly in apparently simple ones. That was the case in one relocation handled by HRO provider Hewitt, which recently helped an employee of Wachovia to complete the sale of his home in North Carolina after toxic mold was found throughout.

Mold in recent years has received high levels of attention as consumer awareness has grown and more home inspections include checking for mold. In most cases, mold remediation services are widely available, but according to Janna Marazita, a relocation consultant at Hewitt, the client she was assigned to lived in an especially remote part of North Carolina. Even though he was being moved to another office within the state, the biggest struggle they faced was a shortage of local mold remediation companies.

“He was having a difficult time to get anyone out there to do it. He got a few estimate that weren’t quite adequate,” she recalled, noting that the client grew increasingly concerned as time passe because there had been an offer on the home.

Marazita said the biggest challenge for the homeowner was finding a vendor willing to travel to the home and perform the work. Because the client, who asked not to be named, lived in such a remote part of the state and because the project was residential and not commercial in scale, there was little interest expressed by firms he contacted. She said the ones who were contacted were only interested in pursuing jobs for schools and businesses.

“He was very concerned because he had a buyer. He was unable to move forward with that buyer so he was afraid he was going to lose the sale. He was worried that he was going into the new location and would be stuck with a home in the old relocation,” she said, noting that Hewitt was contracted with Wachovia on an outbound basis only.

Relocation service providers are used to handling a cornucopia of move-related issues, including home financing, packing and moving, employee orientation, and many others, but mold, despite the real estate market’s recent focus, remains the domain of true experts. Most relocation specialists are vaguely familiar with the problems, but few are well-versed in understanding how abatement should be properly handled.

Marazita conceded that she had little knowledge about mold issues prior to being assigned the case, but following the home’s closing in September (she first received it around March of this year), she said she has in-depth knowledge about abatement as well as about the various types mold that can afflict a home.

“We got educated about mold and about how to partner more effectively with our buyer and bring more resources to our clients,” she said.

As part of that education, Marazita said Hewitt worked closely with its national mold remediation vendor to not only find a local abatement company but also help educate the client about all the steps necessary in handling these cases. She said as the relocation consultant on the case, her worked required one part detective work, one part project coordination, one part procurement management, and one part emotional support. As in any relocation, the stress factor is enormous, and she pointed out that keeping the client and his real estate agent calm during rough waters was as important as handling the logistics.

Deborah Donofree, operations manager at Hewitt, said this case was indicative of the evolution of relocation services. Pointing out that there are no “cookie cutter” solutions for today’s diverse cases, providers must work cooperatively with clients to handle unusual requests and circumstances.

When we face something not covered by policy, we will get together with clients and explain, ‘These are the ramification and costs and liability to you,’” she noted. And this may be one of the most important aspects of outsourcing to third-party relocation providers—being able to draw on their domain expertise and consultative skills.

Tags: Benefits, Engaged Workforce

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