Let Someone Else Handle It!

Outsourcing relocation services allows employers to focus on their core competencies, while relocation experts handle the move. As events around the world affect the economy and security and require corporations to take advantage of global opportunities, concerns about proper selection of employees for overseas moves, compensation and retention are being addressed by full-service relocation firms.

Choosing the Right Employees for a Move
Policy design is the major trend for corporate relocations in 2004, according to Kevin Kelleher, president & CEO, Cendant Mobility. "My discussions with clients often revolve around whether their relocation programs meet the changing needs of the employee that is moving."

Stephan Branch, executive VP of sales and marketing, SIRVA-Europe, agrees, saying, "Corporations are increasingly interested in selecting candidates with the right attributes to do an international assignment. When they start expanding into a location, they look at where their human capital needs are, rather than simply posting an assignment and waiting to see what happens."

Branch says, "Many corporations are finding dual-career couples with children aren't as willing to move overseas as couples without children. That is very different than the trend four or five years ago when companies were relocating the worker and his or her spouse/partner and children. The profile has changed because of cost, security and families not wanting to uproot themselves. Although we see more couples and singles relocating, they still need assistance in extensive lease negotiation and settling into their new environment."

International Relocation And Globalization
Kelleher says, "Globalization is probably the biggest challenge and change that we are seeing in the marketplace today. Companies are looking at getting their hands around the design of programs, and how many programs they look at country-by-country, whether the focus is cost, service or product expansion."

Branch states, "After 9/11, relocation as a whole came to a screeching halt, because corporations were trying to figure out how the terrorist attacks would impact their business. Over the last 18 months, we have seen a significant rebound in relocation activity."

Compensation and payroll administration is an expanding opportunity, according to Kelleher. "More of our customers are looking at technology to provide seamless payroll and tax administration. That is a complicated and unique financial proposition to ensure that all the people around the world are paid properly."

The Bottom Line and BPO
As far as relocation activity, Kelleher says that he is seeing a slow but healthy consistency with increases in relocations. He notes that the economic recovery is clearly creating a sense of optimism. "There are so many corporations today that are examining business process outsourcing (BPO). Many times relocation administration is one of the components that is outsourced. The magnifying trend or focus is the alignment between BPO and customer to deliver effective policy design," Kelleher concludes.

More corporations are focusing on the bottom line and taking out costs and fat anywhere in the organization. As a result, many service providers offer new ways to make the relocation process more efficient. For example, SIRVA brought visa and immigration processing in-house and combined it with move management and relocation services to ensure a seamless, connected process. Branch explains, "Employees' time is much better spent in the office rather than worrying about things such as signing leases, finding a quality place to live or figuring out where to get the best mortgage rates. If an employee who has to move his family to Hong Kong finds the perfect apartment but his visa isn't ready when he arrives, he isn't allowed to sign the lease. He ends up losing the apartment and his company is out tens of thousands of dollars for airfare and hotel for his family. That is more likely to happen when the company hires an outside visa and immigration company, leaving the chance for a potential disconnect." As a result, companies use full-service relocation firms to create a smooth transition at a tactical and strategic level.

Although employers are concerned about saving money, they also want to make sure the expatriate gets the best experience possible. Branch says, "If an expatriate moves without the help of a relocation firm, it is likely that he or she may leave the company within 18 to 24 months. Most employers want to make sure that they cover their investment, so they are using relocation services as a retention tool."

Betty Hintch is the editor of Human Capital.