Keep on moving

Global Relocation Operations’ Robert J Rosing and Gail Plummer of Altair discuss the benefits of professional relocation services.

Relocating company employees may be an increasingly common practice in organizations across the US and the globe today, but it can be a stressful and costly experience on the part of both the organization and the employee. As a result, companies are increasingly recognizing the role that professional relocation services can play in removing some of the cost and risk burden, and in offering real returns.

Robert J Rosing, President of Global Relocation Operations, and Gail Plummer, President and CEO, Altair, go head-to-head to discuss how and why you could benefit from professional relocation services.

HRM. Why is it necessary when relocating employees to take on services such as your own – what are the potential pitfalls of trying to do it all in-house?
RR. There are three practical reasons why companies outsource the administration of relocation services. First and foremost is the ability of a relocation service provider to provide transferees with total support through a consistent and managed process that results in greater transferee satisfaction levels. Second, is their ability to leverage greater buying power and a staff of dedicated, trained relocation associates, which shields an individual client from the impact of variable costs. If a client moves 100 employees one year and only 20 the next year, how do they staff for this volume? A full-service provider is able to staff for those ebbs and flows of relocation volume. For a company like SIRVA that handles over 400,000 relocations a year, we negotiate better pricing and processes because of our size.

Third, from a strategic standpoint, companies have increasingly realized that not only can they outsource the work of relocation, but the accompanying risks as well. For most companies that lack the dedicated resources and expertise to properly handle complicated relocation transactions, trying to stay current on changing legislation and IRS rules around home sale is a tax and legal risk. And if a company does not completely outsource the home sale process, there are the risks and costs associated with home ownership, such as mortgage payments, insurance, maintenance and repair, and possible loss on the sale of the property.

It all comes down to relocation expertise and leveraging that in the right way. Companies don’t want to own homes, manage expenses for each transferee, or build a knowledge base to understand tax reporting or real estate laws. That’s not their business. Instead, they want a partner who is completely focused on providing the best relocation experience for the transferee and is able to bring clients the best practices in relocation from a variety of industries and types of companies at the best value.

GP. Companies are looking for HR solutions that deliver improved service results in support of their culture at reduced costs of delivery. Relocation is one such HR opportunity.

With the growing complexity of corporations today, their expanding employee profiles and the globalization of the employee base, HR disciplines including relocation require specific expertise and tools to effectively deliver service and cost-effective solutions.

These relocation and global assignment management solutions require core competencies in counseling, supplier management, cost containment, quality improvement processes and technology. Global information must be collected, managed and updated on topics such as legislative and regulatory changes, cost of living differentials, benchmark policies and practices, shipment practices and country tariffs or guidelines, visa and immigration, cultural differences, and local real estate practices. This expertise is typically neither part of a company’s core competency nor or a top priority for investment.

Relocation management companies allow corporations to focus on their core competencies and business, while receiving the benefits of HR deployment recommendations with improved employee and family support, enhanced global management tools and improved financial and operating performance.

The potential pitfalls of doing it in-house are the loss of outsourcing benefits, reduced operating performance, and a lack of expertise to make more effective policy and program management decisions.

HRM. So what considerations should be taken into account when selecting a relocation company?
RR. The selection of a relocation partner is not only a matter of corporate and cultural fit, but should take into account the strength of the provider’s capabilities and team. Basic requirements should include full service capability and range of products, expertise and longevity of the team, overall quality of delivery, and ability to deliver on the expectations of both customers being served – the transferee and the client.

Increasingly, however, customers are also looking at the overall value equation – is the relocation provider able to deliver year-over-year cost-efficiency without sacrificing quality and can they continue to improve productivity through ongoing process improvements? We are acutely aware of corporations’ drive to contain costs and operate more efficiently, and as partners we play a critical role in helping our clients achieve these business and financial goals. At SIRVA we do that by leveraging Six Sigma methodologies to identify and improve processes, by working with our suppliers to drive out needless cost and process inefficiencies, and by developing new and leading edge products that meet the evolving needs of our clients and their transferees.

Companies should also seek a partner who will challenge the norm and bring new solutions to the changing relocation landscape. Process improvement in relocation frequently results in less cost and equal or improved relocation benefits.

For clients to keep their relocation programs competitive and effective, they need to select a partner who is completely focused on relocation and has the capital and commitment to invest in resources and innovative solutions that will ultimately enable a client to help meet their strategic objectives.

GP. When selecting a relocation management company, you are selecting an HR partner that will, if successful, support your HR strategy and effectively execute related policy benefits. A successful selection process begins with a corporation understanding their current business needs and articulating their relocation objectives to potential relocation management companies. Generally, selection considerations can be grouped into three major categories: service effectiveness, cost performance and culture fit.

Service will include factors such as capabilities, capacity, quality, employee and client performance results, etc. Costs would include performance on delivering policy benefits, total relocation cost management, cost-effective policy and program recommendations and service fees. Culture fit is the ability to deliver effective services in a method and manner that reflects the priorities, values and style of their clients. Can they do that for you? How have they done that in the past? Prospective providers should supply a list of performance measurements and process results that companies should be requesting, as well as client references.

Additional considerations will also include the service company’s client base. Are they of similar size, industry and relocation program? How are the references? What clients (how many, industry, size, etc.) have cancelled their services in the last two years and why?

HRM. Do services such as your own follow a one-size-fits-all approach or tried and true formula, or are they more tailored than that?
RR. In order to achieve cost-efficiencies, certain aspects of the service delivery process must be standardized. Our quality commitment requires us to follow a process that achieves consistent results. In essence, it’s the formula.

On the other hand, when a company hires us, the mix of services and the way in which we work with their transferees is unique. In fact, our clients often tell us that it’s refreshing to work with SIRVA because we never take a cookie cutter approach and force clients into a one-size-fits-all solution. It’s incumbent upon us to know and respond to the culture and corporate philosophy of the client hiring us. Some might want a self-service approach, while others might want a high touch model. We empower our people on the frontline to listen to the client and look at ways to tailor service delivery to meet their needs without sacrificing the process. That’s what it means to be customer-centric.

On the global delivery side, the mix of what companies ask us to provide versus what they do themselves varies widely. Our products and delivery have to adapt to all situations across over 175 countries. It doesn’t mean, however, that we individually customize our fundamental processes for each client. Not only would it be cost-prohibitive, but it wouldn’t effectively leverage the quality processes we’ve tested and honed through our 25 years in business. There needs to be a reasonable balance

GP. Services are typically tailored to each client based on their specific culture, service package and HR objectives. We do not re-invent our company for each client, but have a set of proven services, methods and controls that are flexibly applied to ensure excellent service and cost performance. Essentially, for each client we change what we do, but not who we are.

The volume of relocations only alters the number of staff dedicated to each of our clients. It does not impact the service offering. The same set of services is available to our clients whether they move 20 or 1000s of employees each year.

Geography does change the service package. There are unique needs for employees and families going on assignment in another country. Compensation, tax, visa, immigration, language, culture, spouse and family support services are uniquely necessary for successful international assignments and repatriation.

HRM. What roles are advanced new technologies playing in enabling seamless relocations?
RR. Technology is an integral part of our service delivery model – both for transferees and clients. Our transferee application, MoveOurHome, provides syndicated content as well as specific information related to an individual’s move. We rely on our web-based system to augment the support our counsellors provide by giving transferees the tools to see every step of their move process online. Ultimately, the technology will eliminate the need for each transferee to have an hour-long introductory phone call and will allow those who prefer this approach access to information at their own pace.

Clients use our online application, ClientConnection, to streamline the administrative aspects of relocation management. They can access all data related to their relocations, create extensive client-specific reports and slice data in a number of useful ways to fit their needs. It also offers predictive modelling for setting up budgets and managing accruals and the tax implications associated with relocation.

Internally, we continually invest in technology to improve productivity. For example, we have moved away from the massive amounts of paper typically used to run a relocation services business and have leveraged document imaging and remote printing.

GP. Technology is having a significant impact on providing seamless relocations. It is enhancing the employee and family service experience and improving manager effectiveness. Real-time information, tools and communication methods are delivering solutions 24 hours a day, seven days a week in support of our professional staff and business relationships. Libraries of information, cultural tools, schedulers, expenses reports and personal status information are all available to every employee and family. Program managers have relocation cost estimators, budgeting, reporting, status, financial, billing and employee information online for their immediate access and analysis.

Relocation management companies also have tools to more efficiently and effectively manage program costs and employee service experiences.

Professionals can now manage program performance from anywhere in the world using customized web-based solutions, in almost any language, for relocations and assignments that occur within a country or around the globe.

HRM. Have you seen an increase in demand for your services and if so what do you think is driving that?
RR. Not only has there been an increase in demand for relocation services, but also an increase in the variety of requests we receive from clients and prospective clients. As more businesses are establishing offshore capabilities or expanding locations, they need expertise across a range of areas and geographical locations. Whether it’s US domestic real estate knowledge or growing areas like temporary domestic or foreign assignments, clients are looking for more specialized services to meet the changing needs of their organizations and their workforce.

The shifting landscape of global mobility is also a large driver of the increase in demand for worldwide relocation expertise. The approach to managing assignees is changing; it might be a short-term assignment overseas now versus a full expatriate package as in the past. The mix of services is different as a result. It might not include spousal benefits or a school search, but instead cover temporary housing, tax and payroll.

GP. There has been a significant increase in the demand for our services. Our client base continues to grow dramatically both in the addition of new clients and in the range of services that are typically purchased. Our current clients are also now adding administrative, financial and global services.

The increase in industry demand results from a number of factors, such as the increase in HR outsourcing, the complexity of relocation issues, the globalization of the workforce and the variety of employee deployment strategies including traditional relocations, short term assignments, temporary project deployments, etc. Additionally, the investment in technology and processes necessary to maintain a level of excellence in relocation service delivery is not going to be made in non-core services.

The growth in demand for Altair’s services reflects our continued investment in service, financial and technological solutions that are customized to each client’s HR objectives.

Our clients represent a diversity of business sectors and range in relocation volume from just a few US relocations a year to a few thousand relocations and assignments around the globe. They also represent companies from start-ups to Fortune 500 companies.

HRM. What kind of metrics can a client use to determine how successful or worthwhile investment in relocation services have been? Is there real ROI, or other less quantifiable benefits?
RR. Clearly, clients are looking for cost savings that can be dropped to the bottom line without having to cut the relocation benefits provided. And if a company has a disciplined approach to capturing their costs, they can quantify the savings from the investment in outsourced relocation services. Often companies will look at the ‘cost per move’, cost savings on tax gross up, headcount (FTE) reduction savings, time saved and the deferred cost of not having to invest in additional technology. They also might quantify the ROI of moving a person compared to the cost of a local hire.

Ultimately though, the quality scores measuring transferee satisfaction are critical. Companies still look to their internal customers to determine if outsourced relocation services are a success. That’s why we are focused on continually improving our 95 percent transferee satisfaction rate. Cost savings are important, but not at the expense of quality services for our clients’ most valuable asset – their employees.

GP. There are metrics that can be used to measure the effectiveness of relocation. How quickly (timeframe from relocation assignment to start-up) does an employee become effective at the new job? How effective (job performance) is the individual at meeting their job objectives in the timeframe projected? What were the impacts (prior department or business vs. current) of the individual on the operating results? How many employees relocated or on assignment, are still employed by the company one year, two years, three years and five years after a relocation or assignment (retention rate)? What is the total cost of relocation in comparison to operating result improvement and the alternative cost of hiring a person locally?

There are, of course, less quantifiable benefits such as developing high potential employees, completing projects such as M&A or product rollouts effectively, building a depth of talent, retaining employees that would not have stayed if not challenged or given unique opportunities and cost-effective deployment of employees in support of short-term needs or long-term performance. You can also track and report on if these employees had been added as succession planning candidates or been promoted or moved to other functions at a similar level.

HR and relocation information can be tracked and analysed to produce financial and operating returns. They can also be used to track workforce impacts. As a result, ROI can be measured as quickly and accurately as possible.

Robert J Rosing
President of Global Relocation Operations since October 2005, and previously President, Relocation North America from June 2003, Rosing brings more than 20 years of experience to the company. He joined SIRVA following the May 2002 purchase of the relocation services business of Cooperative Resource Services.

Gail Plummer
Altair’s President and Chief Executive Officer is also the majority stockholder of the company and, as co-founder, has successfully established a performance-based culture that develops merited partnerships with suppliers and customers. Plummer currently leads the development and execution of corporate strategy.