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How can your Relocation Management Company help you in the recruiting process?

While your RMC is most likely not recruiting on your behalf, there are many ways they can assist in finding the right fit, culturally and financially.

 

The Candidate Pool –  As you gather your list of candidates, especially in those, hard to fill positions, you will usually need to look outside the immediate market place for talent.  One aspect that needs to be addressed is the associated costs of bringing the desired candidate(s) to the position location.  Before making an offer, have your RMC prepare a cost projection, to include the anticipated needs and costs, including the specific tax consequences.  This will help you see your options in an economic light.  It will also enable you to tailor your benefit package to address needs, while keeping the costs under control.Right Fit

The Counseling –  A jigsaw puzzle piece needs to fit.  But, the puzzle must also fit the piece!  In other words, when you have a candidate that would work well in the position, the candidate also needs to determine that the move is right for them and their family.  Your RMC can play a pivotal role in helping the candidate make their decision.  First, the RMC can counsel the candidate on the relocation program and benefits and show them how the process would work from beginning to end.  If they have specific concerns the counselor can come back to the employer with recommendations and viable solutions.

The Resources –  Be it a single candidate, or a group move, the RMC can help gather on the ground, local resources, such as Realtors, lenders, inspection agencies and more to help the candidate(s) get the answers they need to make an informed decision.

The Discovery Trip- The RMC usually has reputable resources to line up options for local tours, previewing homes, schools and other points of interest. By getting your service partner to arrange these services, you are more likely to get actionable feedback to aid in your negotiations.

 

As HR departments have taken on more and more responsibility, with fewer staff members, they need the assistance of their service partners to cover all the bases.  Utilizing your RMC in the pre-offer/pre-decision phase, is a very useful tool to assure a right fit; a cost contained process; and a positive experience for the eventual transferee.

 

Why Lump Sum is a Long Term “Slump”

Lump Sum Relocation PoliciesWith today’s new tax laws, the notion of cutting a check to a relocating employee to cover the relocation costs and reducing the amount of administrative work sounds like a reasonable plan. After all, now that just about every relocation expense is considered taxable income to an employee, you might as well cut a check and “gross it up” to help offset the employee’s tax liability.

However, there are three key reasons why lump sum programs will jeopardize your relocation program’s objectives.

Ongoing Administrative Adjustments

Once you figure out the amount that’s needed to move the employee, you just need to cut the check. Oh, wait a minute! That’s right, you need to figure out how to budget for specific transferee’s move. Then you need to research costs for the next regional move which is to a different location. OOPS! Don’t’ forget about the next move which is the same location as the first move, except now you are moving a family, and then the 4th move…. Ok, I think I made my point. If a company is using Lump Sum approaches, there needs to be ongoing research and adjustments to keep up to date on relocation costs so the company can distribute fair and reasonable amounts. Even if the corporation uses 3rd party services to provide the regional data, there is a significant amount of administrative work involved to update policies, manage the supplier relationships and consult with the transferees on the recommended use of their lump sum budget.

Loss of all Relocation Costs Data

Although Lump Sum programs give transferees full control of their funds and the flexibility to choose the benefits that are most needed, there is a price to be paid for not knowing how the funds are spent. As mentioned previously, understanding current relocation costs and trends help a company make future program adjustments. Without tracking systems or management of the lump sum spend, all knowledge about actual program costs will be lost.

In addition, as relocation programs continue to be evaluated in terms of performance, productivity and efficiency, there will not be enough adequate data available about how certain benefits may perform for different demographics of relocating employees. For example, did a certain benefit for relocating homeowners help make their transition easier than a renter population?  Understanding a deeper sense of how each benefit in a policy can impact a program will certainly give corporations the knowledge to make strategic decisions on policy development and cost containment. With a Lump Sum program, the ability to evaluate specific benefits across various move types is simply lost.

Lack of Support Equals Lack of Control

Now, for those who will argue with me that online Lump Sum services can help companies track costs, I will completely agree that this holds true. The use of online resources that may provide transferees with self-service options and a network of pre-selected supplier partners can certainly provide companies with accurate reporting on what services are being ordered and how funds are being spent.

However, as a long-time rule, the industry knows that just providing money to Transferees, and in some cases, Expatriates, is not going to make the relocation a success. Whether the transferee is a recent college graduate, middle management 1st time transferee or the current, typical industry profile (male, age 36-40, married, not a first-time transferee and moving for a lateral position), the use of relocation counseling is inherently the key to proving a full level of support for your employee.

As relocation administrators, we must all remember that the Lump Sum funds are still the “corporate dollar,” and as such, have a responsibility to make sure the funds are being used wisely and efficiently. The value of professional resources assisting them in understanding the relocation process, selecting service provider, raising financial considerations and simply offering best practices cannot be underestimated.

Taking a Higher Road

Although at first glance, the use of Lump Sum may offer both the employee and company  an easy solution for covering anticipated benefits, we have seen how “the grass isn’t always greener.” For companies who use Lump Sum or are considering the increase in this policy type, there is no opportunity to cut costs when projected need exceeds actual need.  Before going down this path, an employer might want to consider a managed cap approach.  While this type program is still flawed in determining an effective and equitable cap (typically by salary, job level, own/rent status or family size), it offers more structure and captures the actual expenses, which can be used for future projections.

 

So, if you are currently using or contemplating a Lump Sum approach, remember that it’s not a silver bullet. Don’t forget about the cost containment and efficiency that is realized through the utilization of a partner providing a vetted supply chain, real time reporting and best practices benefit auditing.  In the long run, through efficiency and reduced exceptions, their assistance will result in cost savings beyond that of simply writing a check!

Is it Time to Outsource Your Relocation Program

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The decision to outsource relocation services comes up for every company, once they begin to consider the time and energy they are spending doing a fire drill each time a move is authorized.   For small to mid-size relocation programs, a need might arise in order to free up limited internal resources. For larger companies with robust programs, the company may need access to a wider range of suppliers. There is a wide spectrum of considerations in deciding to outsource relocation services.  Outsourcing provides organizations with access to expertise, tools and resources they might not otherwise have. Outsourcing enables these companies to reduce costs and maximize their focus on other day to day business operations.

Initially, outsourcing a relocation program focused around the need to properly handle global assignments and compliant home sale programs, such as the Guaranteed Buy-Out (GBO), Amended Value Sale (AVS) and the Buyer Value Option (BVO).  In order to attract and retain company talent, relocation programs grew and became more sophisticated.  Additionally, employer’s HR departments found themselves strained and too short staffed to manage all the added soft services.   So, in the selection of a Relocation Management Company (RMC), it became more imperative to find a good cultural fit; a service partner that was more than just a processor.  They needed a company that would now address the personal challenges of the transferee and their family, in a manner consistent with their internal corporate culture.

 

The determination to keep a relocation program in-house verses outsourcing it, rests on a number of factors:

 

Scope of the Benefits

Right off the bat, if you are relocating 3-5 people, utilizing a lump sum program, it may be a little premature to hand the program off.  The cost that the RMC must recoup in setting up and administering a new program would be too great to absorb and cost prohibitive for the company to cover in fees.  A cost analysis needs to be conducted to justify RMC fees or any sub-vendor mark-ups.  The time to identify and vet service resources should also be considered in this process.

 

The Sophistication of Your Program

With the new 2018 Tax laws in place, the costs of mobility are increasing for corporations, due to many of the relocation related expenses no longer being excludable from taxation.  While there may be some appeal to moving away from a managed benefit program, opting for a lump sum solution, you must first take a close look at the objectives of your program and the competitive nature of the work environment for your employee talent.

When the lump sum program was conceived, it was traditionally provided to recent college grads or internal self-requested moves.  Today, if you are considering replacing a fully managed program with an arbitrary sum of money, you are likely adding back in inefficiency, productivity distraction, confusion, inequity and in many instances unnecessary stress for your transferee.  If you are in a competitive environment for talent, need your transferee immediately productive and undistracted, or, need to make the most bang for a buck, an outsourced program maybe for you.

 

The Strength of Your Current Staff and Service Partnerships to Meet Your Needs

For some companies, in managing their program in-house, there are typically, one or two experienced HR administrators with detailed knowledge of each move, the internal procedures, and the preferred company vendors.  As long as they are there and managing the program, all moves well.  But, what happens when they move on?  Typically, these programs are shifted every three to four years.  And, when they do, all the efficiency that was built and the understanding behind vendor selection, costs and exceptions are lost and need to be relearned.  It’s always in the company’s best interest to make sure that the skills and knowledge of the Mobility Administrator and/or staff is not “lost.”

 

Faith in Your Service Provider

As Steven Covey said, “Trust is the glue of life. It’s the most essential ingredient in communication. It’s the foundational principle that holds all relationships.”

If you are considering outsourcing your relocation services, one of the first priorities is to establish a communications plan, with pre-defined expectations. The lines of communications should be defined for key internal stakeholders including senior management, finance, Payroll, IT and legal departments should be a priority. Likewise, communications to employees via policies and other communications should also be arranged.

 

Ultimately, if companies come to the conclusion that from a financial and servicing stand point, that outsourcing relocation is warranted, the process of defining internal and outsourced roles may not be as daunting as it seems. If structured properly, with open lines of communications and accessible documentation, an outsourced program can be more effective, cost contained and responsive to your employee needs, without leaving you with that “loss of control” perceptions that might be keeping you from making the move.

Have you recently outsourced your relocation services program, or are you considering doing so?  Let us know your thought process.

Time to Take a Close Look at Your Data Privacy

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The General Data Protection Regulation also known as “GDPR” adopted in April 2016 and enforceable starting on May 25, 2018, is quite possibly the most important change in data privacy regulation in 20 years. So, what is this new regulation and how does it affect us?

 

The  GDPR is a European Union (EU) regulation  addressing data protection and privacy for personal information traveling in or through the EU.   In other words, this doesn’t only apply to organizations located in the EU, but all who transmit data from or to the EU. The GDPR aims primarily to give control to citizens and residents over their personal data and to simplify the regulatory environment for international business by unifying the regulation within the EU. The GDPR considers personal information to include any information about a real person, such as name, address, phone, email, websites, photos, medical information, birthdates, etc.

 

To be compliant, organizations need to provide evidence that personal data will not be shared with outside entities without the person’s consent.  Additionally, the individual must have the ability to opt-out of data sharing and be provided with free and accessible dispute resolution, from an independent recourse mechanism, should they feel their information is being shared unnecessarily and without their consent.

 

The GDPR also helps companies like XONEX provide our clients and their transferees with peace of mind that their data will remain safe in our hands.  As the concerns over privacy continue to grow, we anticipate more locations to require such assurances and remedies.  Therefore, we should be prepared to manage all data with the same scrutiny.  The GDPR compliance process is actually an excellent exercise to understand exactly what information is truly essential to assist your transferees or assignees, whether it is subject to the regulation or not.

 

The GDPR is backed up with stiff penalties for non-compliance. So, organizations committed to compliance must stay vigilant in their responsibilities.  Organizations found in breach of GDPR can be fined up to 4% of annual global turnover or €20 Million (whichever is greater).

 

As this extremely important regulation is about to come to fruition, it’s time to understand what steps should be taken.   Ask your relocation management company to provide you with an overview of the steps they are taking to ensure compliance.

 

Do you have any questions or concerns about the GDPR? If so feel free to contact your Chief Data Privacy Officer or your Relocation Management Company to determine next steps. As always XONEX is happy to review the steps we are taking to ensure compliance with you and help you understand this very important new regulation.

Group Move Considerations

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Strategic Planning for Group Moves

 

Group moves, whether they be for an entire office relocation, specific departments or other strategic reasons, are an enormous undertaking for any organization. The success or failure of the group move can have significant impact on the organization’s financial strength and operational efficiencies. Moving employees with minimal disruption and reaching retention goals are two key indicators of a successful group move.

To ensure the best planning approach to Group Moves, here are some key recommendations:

Executive Consensus

It is key to understand the decisions behind the Group Move and the objectives for the exercise. HR needs to have a full understanding of the various reasons, as there could be multiple, for the Group Move. The company might be seeking reductions in labor or facility costs or perhaps an opportunity to relocate the company to a more desirable market. Confirming the most important strategic goals will help define the policies and procedures for the Group Move.

Communications

The most important aspects of planning a group move is communications and time to manage the process properly. As early as possible, organization’s needs to identify the operational departments or personnel who will be relocated. Although not all the details will be available early on, it is critical to communicate the events and opportunity to the group as soon as possible. It is also important to educate and train managers about the group move before any communications so they are prepared to speak with their personnel. Finally, an organization should also have a communications plan in place for those personnel who are not participating in the group move to offset any concerns or fears during the initial announcements.

Group Move Mobility Policy

Group Move policies are not simply a package of existing relocation policies that are used for individual relocation. New policies must be developed to address the specific goals of the group move. Before creating policies, a company can gain insight into the employees’ perspectives through surveys to help identify specific needs or concerns and develop appropriate policy support. This information coupled with confirmed corporate objectives can be a foundation for building group move policies.

The most critical aspect of group move planning is having enough time to properly manage the exercise. Although these three areas are the foundation of strong group planning, there are numerous operational and communications steps needed within a fully-developed strategic plan. Projecting and managing costs, addressing the remaining workforce, managing supply chain partners and continued communications are all part of the multi-functional approach. As companies consider the objectives and challenges of a group move, developing a realistic timeline in the strategic framework will set the tone and likely success of the group move.

 

Tell us about your group move experiences.

 

 

 

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MIKE CANNING
VP, Client Services

RICK CALANNI
VP of Business Development Northeast Region

 

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