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When choosing a relocation vendor, proper planning and preparation can ensure that your company makes the right move.
Verizon’s relocation specialists place a high value on flexibility when choosing a relocation vendor. That’s because no matter how well-planned employee relocations are, unexpected events can happen. Take, for instance, the transferee who wanted to move what amounted to a flea market or the avid hunter who wanted 30 crates for his buffalo and exotic animal heads. Then there was the transferee who died in the middle of a move that involved a home sale.
“You really have to have a professional vendor,” says Kara Gregory, specialist, talent leadership and management, at Verizon in Basking Ridge, N.J., “because they have to know the real estate laws in that state and make sure they aren’t putting themselves or Verizon at any type of legal risk.” Gregory is responsible for administering the company’s relocation policy.
The need to deal with the unexpected represents one reason many HR professionals consider relocation outsourcing. According to Atlas World Group Inc.’s 2007
Corporate Relocation Survey,58 percent of companies outsourced relocation services in 2006. This was a slightly higher percentage than in 2005, with the difference driven by more small companies outsourcing some aspects of their relocations.
Larger companies outsourcing relocation dropped slightly from 2005 to 2006, but large organizations that do use third parties are outsourcing more services than ever, including claims assistance, audit and payment of invoices, shipment monitoring, expense tracking, and reimbursement and supplementary services. International organizations are much more likely to outsource relocation services than national firms (74 percent vs. 48 percent, respectively), and manufacturing and processing companies (66 percent) are more likely to outsource relocation than service companies (49 percent).
Finding a relocation vendor doesn’t seem to be hard work—after all, there are hundreds of companies offering such services. But how do you sort through the maze of choices to find the best one? That depends on the specific needs of your organization.
Clarifying Your Goals
If you are an HR professional for a small organization only moving a few employees occasionally, it may suffice to turn to the Yellow Pages to find a moving company. But organizations that move different levels of employees to a number of locations on a fairly consistent basis need more from their providers.
Until you understand the actual business goals and strategies of your relocation program, it’s going to be hard to set up a policy. Determine what drives the need to relocate people in the first place, and make sure those drivers are aligned to your business strategy. In many cases, says Scott Sullivan, senior vice president of global sales and marketing with GMAC Global Relocation Services in Woodridge, Ill., an employer should consider finding talent locally, both domestically and internationally. But there are also good reasons to relocate employees. For example, Sullivan notes, your business may move employees to develop them as senior leaders with international management expertise. “It’s not rocket science that you probably want to be more generous to the senior executives,” Sullivan says. Or, companies may initiate relocations to fill technical-skills gaps.
Employers often outsource relocation because it allows them to retool their relocation programs, enhance services or cut costs by reducing internal head count. Whatever your organization’s goals, you need to be clear about them before you talk with vendors.
Beginning the Process
UnitedHealth Group, a health insurance company headquartered in Minnetonka, Minn., recently completed its relocation vendor selection. The company goes through this exercise every few years to be sure it gets the best service for the best cost. The process starts with setting expectations.
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First, HR professionals take a look at the company’s relocation policy to see how it stacks up against best practices, says Thomas Valerius, vice president of recruitment services for UnitedHealth Group.
Shauna Ihle, vice president of human resources for Flowserve Corp. of Irving, Texas, a manufacturer of pumps, valves, seals and components to the process industries, recommends collecting feedback from companies most similar to yours. “Reach out to organizations that are known to do this well or that have gone through the pain and have learned from the process,” she says.
Ask relocation vendors to provide a list of companies similar in size to yours. Contact those organizations—not for the purpose of checking references, but to get an idea what other companies do. Sullivan suggests asking:
Another useful resource is the Worldwide Employee Relocation Council (ERC) in Arlington, Va. It has a library, and its representatives can help you network with businesses in your industry, says Maura Carey, vice president of strategic accounts with the relocation company SIRVA in Chicago.
Assembling Your Team
Depending on the components of your relocation program, you will need to bring together team members from different areas of the company. Ninety-nine percent of relocation responsibilities fall to HR, says Sullivan, but you need more than HR representatives at the table. UnitedHealth Group’s team consists of employees from recruitment, HR, procurement and finance.
Include representatives from information technology as well, suggests Rebecca Powers, principal consultant, human capital advisory services, with the consultancy Mercer in San Francisco.
Ihle advises including staff members from supply management and legal services, and making managers of relocating employees part of the decisionmaking process too.
Reasons for Relocating Within the United States.)
Sullivan says about 80 percent of the requests for proposals (RFPs) GMAC receives are poorly assembled and prepared. Go to two or three of the vendors you are seriously considering and meet with them before submitting an RFP, he says. Share ideas and visions with these vendors and ask them for opinions about how to structure your program.
This can also be a good way to test your RFP and make sure you have the right questions, says Valerius. “Before we went out with a formal RFP, we had a couple of relocation vendors in to tell us about their services [and explain] what the trends are in the market.”
Because the cost of relocation varies with the degree of custom-tailoring, Carey suggests creating several scenarios for suppliers to bid on. “Develop three to five scenarios across different policy levels to get a better idea of what your cost of doing business really is,” she explains.
Have vendors direct questions to one person on your relocation team and distribute the answers to all vendors, not just the one who asked the question, says Joseph Benevides, president of the ERC and senior vice president of global relocation services for Paradigm Real Estate Resources Inc. in Rancho Santa Margarita, Calif.
Relocation companies typically determine their prices on a per-service basis, depending on the portfolio of services requested and the demographics of the population of each client in terms of renters vs. homeowners, explains Benevides.
Rating the Responses
Before narrowing down providers to two or three and inviting them to give presentations, decide on evaluation criteria. Once selected, your vendor should be a strategic partner, proactively working with you and identifying trends in the industry as well as different technologies available to serve your employees better. A vendor also should tell you how to revamp your portfolio and services to save money, says Ihle. The services should be seamless to employees. Make sure the vendor is on solid financial footing and has a welldeveloped succession plan. Find out what happens if your account manager or any other key player leaves the company.
Service is still the most important criterion employers consider when selecting a vendor, according to the Atlas World Group relocation survey. Eight of 10 corporate decision-makers rated it as “critically important,” regardless of company size. Reputation and price came in second and third, respectively.
Customer service is the differentiator, says Valerius.
Relocation is a complex process with potential risk for the company in making sure their transferees are handled properly, says Sullivan. To check out a vendor’s customer service, arrange an on-site visit. UnitedHealth Group, for example, asks vendors to bring the person who will manage the account to the preselection presentation. After the presentation, members of UnitedHealth Group’s relocation team also meet the vendors’ staff who will be working on the account.
Meet the people who handle various services, such as home sales or accounting, says Sullivan. Check out the call center to see how its staff works with customers.
Meet with this team without the sales rep there, says Carey. Have the staff explain how they are trained and how they manage their workloads.
Making the Final Choice
Finally, of course, check references, says Valerius, by using the vendor’s client list. He also contacts clients the vendor doesn’t give as references. “I check the references they don’t give me. You learn a lot more,” he says.
Valerius suggests asking:
With diligence and proper planning, choosing a relocation vendor can be an opportunity for HR professionals to shine.
Nancy Hatch Woodward is a freelance writer based in Chattanooga, Tenn., and a frequent contributor to HR Magazine.
SHRM articles:Surprise, Surprise! (HR Magazine)
Keeping Information Safe (HR Magazine)
SHRM sample policy:Relocation operating procedure
Article: Navigating the Process Flow for Procuring and Maintaining Mobility Services (Employee Relocation Council)
Press release:GMAC Global Relocation Services Ranks Highest in Customer Satisfaction with Corporate Relocation Services (J.D. Power and Associates)
You Oughta Know
Answer these questions before requesting an RFP:
Why relocate employees?
Where are your current transferees located?
Where are your new markets?
What is the cost benefit of outsourcing your relocation?
What is your anticipated volume of transferees going to be in future years, both domestically and internationally?
Should you consider tiered services that offer different levels of relocation benefits based on an employee’s position with the company?
How do you want billing handled?
What does the vendor’s global footprint look like?
Are most of your transferees renters or homeowners?
What relocation services do you want the vendor to provide?
One Vendor or Two?
UnitedHealth Group uses two vendors, one for domestic and one for international relocations, says Vice President of Recruitment Services Thomas Valerius. Because both of the company’s vendors provide domestic and international services, they can back each other up in some unforeseen circumstances, such as when one of the companies gets taken over by another company or if transferees want to work with the other vendor because they have a problem with the first one.
Verizon, on the other hand, prefers having one vendor for both types of relocations because that way the vendor is familiar with the company, knows its policies and helps streamline the entire process. Flowserve Corp. also uses one vendor because it likes having a one-stop shop for its employees and because it gives the company more leverage with pricing, says Shauna Ihle, vice president of human resources.
Relocation Services to Consider
Here are some items you may want to consider when outsourcing relocation services:
For both domestic and international:
Shipment of household goods.
Home sale assistance, which can range from helping to market the transferee’s house to actually buying the house or offering mortgage assistance.
Lease cancellation services.
Temporary living assistance.
Lump-sum benefits administration.
Expense payment and administration.
Spousal and family counseling.
Letters of assignment.
Visa work permits.
Ongoing assignment administration.
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