Recent Tweets

Follow Me on Twitter

Powered by Twitter Tools

Strategic HR

Articles on how HR can take a more strategic approach towards relocation management.

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

batonhandoff

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.

Three Tips to Manage Stress at Work

There are a lot of amazing things about this time of year; holiday parties, family time, festive food, you get the drift. But, while all is merry and bright outside the office, HR often feels swamped and extra stressed as we near year-end so today, I thought I’d send you folks in HR some extra TLC and offer a few tips to manage stress at work as we wrap up 2017.

Why an RFI is More Important Than an RFP

As a seasoned sales professional in this industry, I have worked on my fair share of RFP exercises spanning both small and large opportunities across corporate America. It still amazes me that in this world of emojis, texts and Instagram, it takes a monolithic research assignment to choose a business supplier partner. As much as I respect a diligent research process for purchasing any product or service (for both consumers and B2B), I think the industry has taken its eye off the ball when it comes to focusing on the three main reasons to work with a specific partner – Team, Culture and Achievements. Unlike traditional RFIs that seem to ask a range of general questions, focus on these three key areas.

The Difference Between Tier 1 and Tier 2 Supplier Diversity Spend

Companies privy to the importance of implementing a Supplier Diversity Program seek to expand their programs to include both Tier 1 and Tier 2 spends. So what is the difference? Let me break it down a bit today.

Supplier Diversity: What & Why

We all know that supplier diversity is important, right? But ask yourself … do you really know exactly what that entails and more importantly, do you understand WHY it’s so vital for a percentage of a company’s annual spend to be centered on diverse suppliers? Simply put, a supplier diversity program is a business program that proactively encourages the use of minority-owned, women owned, veteran owned, LGBT-owned, service disabled veteran owned, historically underutilized business and Small Business Administration (SBA)-defined small business concerns as suppliers. Okay, that makes sense, right? But what’s this all about and why is it important?

3 Issues HR Will Face Throughout 2017

 

Each new year brings new obstacles in the workplace. It’s inevitable as both the workplace, the people in it and the people who run it shift and change with time. Last year was no picnic for HR and upper level management and 2017 will not be without its issues either. Below are three hurdles HR can expect to run into throughout the coming year as well as solutions to power through.

Employee Retention Pitfalls after Relocation

We’ve talked quite a bit on this blog about payback agreements. Oh, the payback agreement. We both love it and hate it at the same time. Is it a necessary evil? Perhaps. We certainly don’t believe that companies should spend thousands, if not hundreds of thousands, of dollars on a relocation if there is a risk that the transferee will resign before the contracted period is up. Putting aside financial concerns for just a moment, however, I think we need to take a closer look at why payback agreements are so prevalent (94% of companies require them) and if there is a better, more effective way to ensure that talent stays on board after a transfer or assignment.

The Benefits of Relocating Transferees in December

I know that your busy relocation season is usually over the summer. Your transferees’ kids are out of school, so moving them to a new city is easier without having to pull them from the middle of a school year. But companies change and grow all year long.  Business doesn’t stop because of winter weather or holidays – at least not for more than a few days. While your company may not relocate quite as many people over the winter months and the holiday season, that doesn’t mean you don’t have transferees mid-move, looking for a new home in a new city. Luckily, there are several benefits to both relocating and buying a home at the end of the year.

Search

MIKE CANNING
VP, Client Services

RICK CALANNI
VP of Business Development Northeast Region

 

Site Tags

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |