We're a Small Company: Is it Worth Outsourcing My Mobility Program?
As a Senior Director of Business Development at SIRVA, I work with companies representing all industries from just about every industry, all around the world. Despite the variety, there’s a common question that I hear from companies that implement a lower volume of relocations: If I’m only moving a few employees, does it make sense to outsource my mobility program?
The short answer is: Most definitely.
The cost of relocation is no small investment – often up to three times the salary of the individual being moved – so whether you’re moving two employees or 300 employees per year, it’s always wise to do so efficiently. What’s more, to ensure that the talent you’ve attracted stays engaged, offering a positive employee experience throughout the move is also key. Outsourcing accomplishes both due to a winning combination of expertise, the right technology, and innovative program support and services. Outsourcing all or part of your mobility program also strengthens mobility branding and offers benefits all stakeholders involved.
A Single Point of Accountability – and Minimized Stress
Relocating is a complex process, in which each milestone is dependent on the successful implementation of the milestones that come before. When handling a relocation internally, the mobility or HR manager is charged with wrangling multiple vendors, each with their own timelines and prioritization. Without the ability to integrate these vendors, internal relocation managers run the risk of being unable to troubleshoot before problems occur because those problems don’t generally present themselves until they have significantly escalated.
Meanwhile, if an employee is managing all or portions of a move, not only does s/he share this experience, but s/he also faces the added pitfall of being inexperienced regarding the many steps involved with relocation and any nuances specific to a particular region. Relocation is stressful under the best of circumstances; if problems arise due to unforeseen circumstances or a lack of knowledge, the employee is forced to focus on the move and its challenges – taking much needed attention away from his or her role in the new location.
Outsourcing your mobility program to an experienced Relocation Management Company (RMC) minimizes these concerns because all aspects of a relocation are managed by one person with a bird’s-eye view of a move’s timeline and activity status. The RMC consultant can monitor processes, proactively troubleshoot as deadlines approach, keep an eye on expected deliverables and employee responsibilities and provide transparency to stakeholders and the relocating employee. Operations are simplified, supply chain networks are employed to increase efficiency and utilize preferential pricing, and stress levels are managed for both the internal mobility manager and the relocating employee to allow them to focus on business partnerships and job engagement.
SIRVA, in particular, uses a unique digital platform called SIRVA Connect to take this concept even further. The involvement of every stakeholder (vendors, the employee, and the internal mobility manager) is integrated, allowing each to view the employee’s move status (as appropriate) from any digital device at any time. Actions, milestones – even expenses and billing – can all be tracked through the platform, but the company’s assigned consultant is always available to answer questions, intervene or make suggestions. Hi-tech, high-touch approach provides every employee with the guidance they need, a sense of awareness and engagement, and a positive experience overall. Ultimately, this contributes to a successful assignment and employee retention when that assignment ends.
The Elimination of Multiple Bidding Processes
Rather than having to employ lengthy bidding processes for multiple services via a self-managed program, HR and internal mobility professionals find it far easier to choose one RMC. The RMC can then choose the best vendor for each client based on what’s best for that client. Location, availability and regional or area expertise are taken into consideration. A wide variety of vendors and support individuals required for a move are already a part of the RMC’s network, allowing the internal mobility manager to focus on other priorities within his/her organization.
Savings Through Innovative Programs
Because seasoned RMCs deal with relocations in large numbers on a regular basis, they have perfected programs and processes that companies of all sizes can benefit from, wherever they are in the world. Organizations that utilize an RMC also benefit from preferential pricing that is available based on relocation volumes. There are many ways that RMCs, and SIRVA in particular, can help companies save money and run more efficiently. Let’s take a look at home sales as just one example.
If a company’s relocating employee base consists largely of homeowners and the company self manages its home sale program, it’s likely the company will provide each employee with a tax gross up following his or her move. The company, however, would also need to reimburse each employee – on average – with an additional 62 cents on every dollar to keep that employee “whole.” On a home worth $350,000 where the average closing costs are 8.5%, for example, those closing costs would be approximately $29,750. However, to assist the employee in a tax gross up, the company would have to pay an additional $18,450 for the employee to ‘break even.’ That’s a total of $48,200.
However, if a company chooses to outsource to an RMC, these costs can be reduced by utilizing something called a Buyer Value Option (BVO) home sale program. In a BVO program, the company assumes ownership of an employee’s home to release the employee from responsibility so s/he can relocate quickly. The company then, with the assistance and guidance of the RMC, markets the home. Because the company assumes ownership of the home there’s no need to pay gross up fees to the employee, saving the company that additional cost of 62 cents on the dollar mentioned above. Further, any expenses that are incurred are considered operating expenses rather than employee reimbursements, which adds up to more favorable tax results for the employer.
RMCs often provide proprietary programs that can assist companies in a variety of areas. At SIRVA, for example, we take the above home sale concept a step further by offering our clients risk protection for when home sales fall through. In a traditional BVO program, if a home fails to close the client, as the owner of that home, would assume all responsibility for any losses associated with that home, including mortgage payments, taxes, insurance, maintenance, and more. Via our innovative RiskGuard products, we assume ownership of an employee’s home so the company doesn’t have to. In addition to assuming all risks associated with an employee’s home, these programs provide companies with predictable real estate costs that become more easily budgeted for.
SIRVA Advantage Program
Clients of every size benefit from outsourcing with a RMC but, by working with SIRVA’s Advantage team (a distinct division at SIRVA comprised of trained account managers and front-line specialists) companies that move 30 employees or less per year can take advantage of a program that is designed especially for them.
- Extensive, quality services for all mobility program tiers
- High touch services for C-suite executives
- A collaborative audit and redesign of mobility policies to meet efficiency targets
- Customizable contracts that are created quickly and thoroughly: We provide you with only the services you need and you’re only charged for the services you use. (There are never hidden non-compliance fees)
Because small companies typically don’t implement a significant number of relocations on a steady basis, they don’t have an opportunity to establish the expertise or core competencies that are developed via the experience of sheer repetition. With this in mind, perhaps the most significant thing smaller companies benefit from by utilizing SIRVA’s Advantage program is the immediate access to the Advantage team and all that it comes with: years of lessons learned, global experience and cultural expertise, and a worldwide network of services and providers that are all managed under one roof. After years of implementing moves of all types to just about everywhere in the world, we’ve experienced just about every scenario imaginable. That experience benefits our clients on a daily basis, regardless of size and location.
If your company moves less than 30 employees a year, it pays to outsource your mobility program for all of the reasons listed above and more. To learn more about the many ways SIRVA’s Advantage program could benefit your company, please visit our Advantage web pages or contact me, at Jane.Yanosko@sirva.com.