• So If… Series – Part 5: Rethinking Outsourcing


    So, If  we try, can we find a better way to improve the relocation experience and more effectively manage the cost of relocation?

    The more businesses can increase assignment success rates and maximize human capital ROI, the more they can promote career advancement, nurture growth and fast-tracking of top talent, all leading to increased employee engagement and sustained business growth.

    If you truly trust external service providers to share your commitment to the attainment of these goals, then read no further…

    Are employers happy with service levels? Is the best solution to cost-effective management and service excellence for employees attained through complete outsourcing of relocation services, or has the time come for the pendulum to swing back towards a higher degree of control and personalized service that balances cost and outcomes?

    The results of the 2015 CERC Relocation Policy Survey tell us the following:

    Management: In the current North American relocation landscape, 19% of companies have totally outsourced and 57% have partially outsourced relocation management programs.

    Time:  Mobility managers are spending less than half of their time in the strategic support of business units, and the majority of their time dealing with day-to-day operational matters.


    Relocation Costs:               Domestic         Cross-Border       International
    Avg. Cost in 2015                       $57,000              $69,000                    $108,000
    Avg. Employee Income             $97,000              $120,000                   $164,000
    Relocation Cost/Salary                 59%                      58%                            66%

    In addition, approximately 12% of the total cost of traditional home sale programs in North America is spent on supplier and referral fees (Ward O’Farrell Consultants, 2017).

    Based on the above chart, we can make assumptions on referrals ad hidden fees as follows:

    Avg. per File:                            $6,840                   $8,280                       $12,960

    The employer can then use savings to engage an internal mobility specialist, provide more personalized service as well as a more robust and seamless mobility management program, from pre-move hiring/negotiation to post-transfer, at equal or reduced cost. Would employees and their families be better served by such a management model, supported by certain strategically chosen supplier-assisted high-touch services and flexible self-serve & on-line tools so valued by today’s resourceful transferee?

    What If… we step away from cookie-cutter relocation and define the optimal ‘in-house to-outsource’ model reflective of a company’s global mobility strategy aimed at providing the greatest value to its business units?  Would it be feasible to internally manage more of the process in order to improve services for our transferring families and generate savings through reduced hidden fees that would otherwise go to the relocation management firms?

    Maybe the time has come to review this highly visible HR program and work on finding a better way…