Making Sense of Alternative Housing Support Options
Global mobility programs are evolving to recognize shifts in population demographics, cost rationalization priorities and shifts in customer and employee preferences related to the nature and delivery of support elements. Consideration for alternative housing support options are a direct result of this evolution, and many organizations are weighing the benefits and challenges of including these options as part of the formal mobility program, particularly as employees take more responsibility for coordinating relocation-specific services.
If you are a mobility program owner, it is likely that you have had inquiries from customers and/or employees about alternate housing. Initial thoughts may be to approve these options based on ease of use and familiarity of process, however it is important to consider the compatibility of these options with your global program.
Traditional Temporary Housing
The traditional model for helping employees secure temporary housing has been to use a vendor [e.g., Corporate Housing Manager, Relocation Management Company (“RMC”)] that acts as the point of contact to source available short-term, furnished housing. The vendor oversees the management and coordination of housing, as well as escalations and payments. The vendor ensures that the housing providers meet a set of stringent criteria to ensure a quality and safe experience, including background checks, location evaluations and building security assessments; if the employee encounters challenges, the vendor works with the temporary housing provider to resolve issues and manage the overall experience.
Self-serve options such as Airbnb1 started as a way for “hosts” to share a room in their home for a fee. This model has quickly grown to include “hosts” who rent out entire apartment buildings and/or houses around the globe. Self-serve options are not reserved solely for short term stays, but also provide options for long term rental accommodations. The employee, rather than a vendor, has responsibility for managing bookings, payments, issues and escalations directly with the provider.
Traditional Temporary Housing vs. Hotel vs. Self-Serve Housing
The table below is meant to help illustrate the differences between common housing options:
|Traditional Temporary Housing||Hotel||Self-Serve Option|
|Type of Housing||Furnished Corporate Apartment||Hotel Room||Varies|
|Best Use||30+ days||1-7 days||1-30 days|
|Booking Commitment||Minimum of 30 days||Per Night||Per Night|
|Booking||Corporate Housing Vendor or RMC||Employee
*Cancellation policy varies by brand
*Host may cancel up to 7 days pre-arrival
||Varies by brand||
|Security/Duty of Care||Background checks
Building security assessment
|Varies by brand||
Unknown/varies by host/location/property
|Payments||Company or RMC||Employee||Employee|
|Issue Resolution||Corporate Housing Vendor or RMC||Employee||Employee|
|Supply and Demand||Moderate impact||Moderate impact||High impact|
|Seasonal Impact||Low impact||High impact||High impact|
Mobility Program Impact
The company’s culture and philosophy usually play a big role in determining the compatibility of alternate housing solutions with the global mobility program.
Some mobility programs are moving towards a self-serve approach that allows employees to oversee and directly manage the sourcing of housing. While this option adds flexibility and choice for employees, there may be elements of increased risk/security considerations and decreased experience; organizations can address risk/security concerns through appropriate vetting by security teams.
Organizations should also consider the ever-changing regulations that impact self-serve housing options. In several locations, “hosts” are now required to obtain permits and/or licenses to serve as a housing option.
Guests may experience negative perceptions from neighbor property owners, property managers (building managers) and/or homeowner associations (HOAs) derived from the belief that the temporary housing option reduces property values – some HOAs/property managers may have restrictions against the use of housing in this manner.
Cost is another important consideration. Self-serve options may not always be a more cost-effective alternative to traditional temporary living. Corporate housing vendors and RMCs can drive down costs by negotiating rates based on volumes, although there are some instances of recognized cost savings in expensive locations.
Companies who are considering the inclusion of self-serve housing options for their mobility program should evaluate the following:
- Company’s philosophy on duty of care and overall employee experience
- Managed approach vs. self-serve options
- How will escalations be managed?
- Will the company get involved in resolving the issues?
- Risk tolerance
- How much risk will the company take on?
- Do the benefits of a self-service model out-weigh the risks?
- How will costs be managed?
- Who will make the payments?
- How are costs contained?
How SIRVA Can Help
The landscape of global mobility continues to change rapidly but our goal at SIRVA remains the same – to stay on top of the ever-changing practices to provide our clients with knowledge and power to help make the best decisions for their companies and relocating employees.
SIRVA can assist in a variety of ways from complete outsourcing of temporary housing coordination to expense reimbursement in a self-serve model. We will work with you to define and implement the process that best fits your needs.
We will continue to keep you updated on the latest information and provide you with the guidance you need to successfully manage your mobility program. To learn more, please reach out to us at concierge@SIRVA.com or your SIRVA representative.
1 Airbnb is a registered trademark of Air Bed and Breakfast, Inc.