One Step Forward, Two Steps Back: The Evolution of Relocation Management
It’s always exciting to be involved in implementing positive change, you have a clear objective with a detailed plan outlining how it will be reached and you’re ready to go. We know from experience, however, that the well-known proverb “the best-laid plans of mice and men often go awry”, or at least its message, must never be far from mind.
Relocation management has experienced significant change over the past few decades. Have all the changes introduced achieved their intended objective? Some have, even though various influences may have shifted the trajectory somewhat, but many have not. The following are a few of the initiatives that have not turned out to be as positive as originally hoped:
The impetus toward outsourcing to relocation management companies (RMCs) was to allow businesses to prioritize their core operations and reduce costs by shifting mobility activities to service providers specialized in this area. Fast forward a few decades and some organizations are re-establishing in-house expertise to boost success rates through more personalized and higher touch service. They find that employees feel an extra sense of comfort knowing that they are supported by a fellow employee. In the end, some companies have concluded that many of the benefits of outsourcing do not outweigh the loss of control over the quality of service provided.
Referral fees (or network fees):
The concept is rooted in the real estate industry’s practice of compensating for referrals. Initially, RMCs, recognizing the minimal effort associated with this revenue source, passed the benefit on to the client in the form of reduced management fees. These days, with the practice having spread to most relocation activities, we find that RMCs have put themselves in a murky position where they are having to choose between an enthusiastic supplier willing to pay generous network fees to be taken on or one who simply offers the best quality of service. This puts them at odds with the interests of their client.
What was originally a cost reduction initiative has evolved into a feature within very complex fee structures which make it difficult to clearly understand who is benefiting from the arrangement.
Offloading the management of suppliers was viewed as a key benefit of retaining the services of an RMC. These days, with exclusive arrangements and committed supplier networks, RMCs have less control over service delivery. Suppliers are less likely to be fired, particularly if they have agreed to generous network fees. Outsourcing does free businesses from having to deal directly with suppliers but did the management element, i.e. quality control, get lost along the way?
With all the mobility expertise under one umbrella, businesses looked to RMCs to assist in the development of ‘best in class’ programs. Unfortunately, self-interest has become more prevalent as RMCs focus on streamlining work processes to help them generate more revenue. They may suggest policy wording that shifts work previously the responsibility of the relocation counsellor to the transferee, such as selecting the most suitable temporary accommodation supplier; a task for which someone new to the area is ill prepared. This does, however, liberate the counsellor to take on additional chargeable responsibilities…
Self-serve and lump sum programs:
A more recent development in employee mobility, these programs are intended to give transferees more choice in the allocation of their relocation spend and to save costs through reduced administration. All too often, we see these programs implemented with the assumption that employees will be able to handle the move effectively on their own. The minimal support in place for the transferred family often leads to mismanagement of funds and a difficult relocation experience. In these cases, the relocation either ends up failing or the employer has had to spend much more than intended to ensure the family is settled.
The above are examples of initiatives that were meant to transform mobility programs, but over time, have either failed to achieve or stay aligned with the original objective. It doesn’t take much analysis to realize that the important elements of project management appear to have been neglected: monitor, evaluate and recalibrate, when necessary. Is it time to insist on recalibration?