• Relocation: The Good, the Bad and the Ugly – Part 2


    With entertainment award season upon us, we remember one of the movie industry’s great westerns, The Good the Bad and the Ugly, inspiring us to provide our own take on the recent good, bad and ugly trends within the employee relocation industry from different perspectives: Part 1: Relocation service providers, Part 2: Suppliers and Part 3: Overall policy design.

    Part 2 Other Suppliers

    The Good

    * Suppliers are offering technological tools that improve communication and streamline processes, in some instances reducing the need for reliance on relocation management service providers; for example: destination information on web portals, shipment tracking, immigration self-evaluation tools, business travel tracking for tax purposes.

    * As a means of dealing with driver shortages, particularly during the peak periods, some moving organizations are rolling out container programs that allow the shipment of household goods through freight companies.

    * In addition, moving companies have been simplifying their complex tariffs to ease the auditing process and improve transparency.

    * The amalgamation of taxation and immigration service providers has increased the ability of a single point of contact for clients to manage activities globally and has improved integrated service offerings to their clients.

    * Immigration and taxation suppliers are offering fee structures that combine consulting services with transactional support, allowing corporations to reduce their overall costs in those areas.

    The Bad

    * Many suppliers are no longer speaking directly to corporations, but only through relocation management companies.  Suppliers may not receive a clear explanation of their client’s requirements, leading to misunderstandings and frustrations on the part of the client and the employee.

    * Corporations are reducing the number of relocations and, in some cases, limiting the level of assistance provided to transferees, resulting in fewer revenue opportunities for suppliers.

    The Ugly

    * Referral fee structures have created an imbalance in the distribution of expenses resulting in suppliers not receiving a fair share of the revenue for the level of service they are providing. Referral fees muddy the waters to the point where corporations have little understanding of the breakdown of relocation management company and suppliers costs, even in the case of zero-based contracts.

    *  The lack of protocols and controls regarding audit of moving shipments leave the invoices prone to error, weight bumping and over charging.  This is exacerbated by complex tariffs that allow for a multitude of additional charges, requiring increased administration on the part of corporations and resulting in higher move costs overall.