What’s Your Relopinion?

Before you announce that a corporate group move (or relocation) is taking place, it is important to be prepared. A part of that will be identifying the resources you will need. Consider all the internal departments that need to be involved or will be impacted by the move. Evaluate if you need to bring in outside resources to assist you in managing the move.

Too often people underestimate the complexity of a group move and the critical need to have the time to properly prepare for the move prior to it being announced. For those employees who are moving, as well as those employees who are not going to move, you or someone on the team need to have the answers to a number of critical questions such as:

Questions that need to be answered for employees who are moving:

• What organizational units and types of jobs will be involved?
• How many jobs will be moved? From where? To where?
• Has selection criteria been established? Will the criteria be publicized?
• How will transferees be selected and invited? What will be the administrative process for job offer and acceptance?
• Will transferees’ departure-area jobs be re-filled? If so, how?
• How many job openings in the new facility will be filled locally?
• Will there be new-hires to be relocated?
• Will group move relocation benefits expire at a certain point in time?

Questions that need to be answered for employees who are not moving:

• Why wasn’t I asked to move?
• Will I be offered a new job?
• Do I need to apply for it?
• When will my current job end?
• Will there be a stay or retention bonus?
• Is there a severance package?
• If a job opens up at the new location, can I apply for it?
• Can I apply for a job at another location?

Accurate and timely accounting of relocation expenses has a far-reaching impact on the overall performance and success of a corporate relocation program, to both the company and the individual transferee. An expense management process should support users without being burdensome, so they can concentrate on the other aspects of their jobs. Corporate relocation managers and/ or payroll managers should consider several key issues when evaluating the effectiveness of the expense management process in their companies.

Once a company has reviewed its current process and determined that improvements are needed, the next step is to decide how to make enhancements. In today’s business environment there are not many functions within an organization that are not a target for outsourcing, including expense management. And for a relocation manager, the decision to outsource this particular function will come with new questions that need to be addressed.

Questions to determine outsourcing readiness:

Is there an overall culture of familiarity with outsourcing transactional functions (e.g. benefits processing) that already exists within the company?

If the company has previously outsourced other functions, then formulating a plan to outsource the management of relocation expenses can be evaluated not only on its own merit, but can also rely on precedent and draw on successful processes that have been followed in the past. If this is not the case, then a transition project plan needs to be developed and approved.

Is this a core competency that the company has or wishes to retain?

Expense management is a very detailed process that requires an in-depth knowledge of the ever-changing tax laws and regulations at the federal and state levels. Part of the evaluation process is to assess the current depth of knowledge of the team and determine if it is adequate and can be sustained if team members change. In the end, the evaluation process may lead to questioning whether or not this is a function that should remain in-house.

To learn more about determining outsourcing readiness click here
 

1. Is there a customized, seamless integration with payroll?
    
2. Is there a documented exception management process with the ability to track and report exceptions by type, division, cost center, etc.?
    
3. Does the provider just “rubber stamp” exceptions, or is there a clear audit approach to policy compliance and approved exceptions?
    
4. Does it provide cost-of-living allowances (COLA) and lump sum calculations?
    
5. Is there a process in place for making timely and accurate payments on the employee’s behalf for recurring costs (temporary living, rent, etc.)?
    

We all know that real estate is local. However-in our current real estate situation-we are seeing more markets continue to see a slip in home sales with only a few who are reporting an increase. The National Association of Realtors (NAR) reports areas such as Colorado Springs, Colo., Sacramento, Calif. and Spartanburg, S.C. are experiencing double-digit pending sales gains compared to a year ago with a significant percentage of these sales attributed to investors who are buying foreclosed properties. So while some markets have seen tremendous growth in home sales compared to last year, others have seen contract signings slashed by as much as 50 percent.

The current real estate market for the typical residential home is still very much a buyer's market. Attractive interest rates, large inventories of homes for sale and lower-than-average sale prices make it a great time to buy. Sellers aren't so fortunate. In fact, some areas have seen home values drop so low that typically willing transferees are hesitant to take a corporate relocation because of loss-on-sale concerns or owing more on their properties than the current market value sales price.

According to a recent survey conducted by the Worldwide ERC®, the number one reason employees are reluctant to relocate is a direct effect of the troubled real estate market. The survey indicated that more than 95 percent of respondents reported "slowed real estate appreciation at the old location," as the reason their employees are averse to moving. This is a stark contrast from last year when only 16 percent cited the real estate market as the reason for their reluctance. Instead, high housing costs, high cost-of-living and family resistance to move, were top concerns.

"Today, it's an unfortunate fact that those true soldiers that have faithfully relocated every two to three years are cooling to the idea because of the economy and the fear that they will take a considerable home loss-on-sale," says David Barlow, SIRVA's senior consultant. 

Barlow advises companies that have not done so to consider implementing a loss-on-sale policy to remain competitive and to help their transferees with the reality of falling home values and sale prices. He also advises companies that already have a loss-on-sale policy to re-evaluate the loss-on-sale limit or cap to ensure it is sufficient in today's difficult real estate market.

It's no secret that the current real estate market has had a significant impact on the relocation industry. Companies have had to reevaluate and update their corporate relocation policies to overcome the challenges of the current market.

Barlow doesn't wager a guess on when the market will turn, but he expects companies will be working through the challenges of the current real estate market for some time to come.
 

The U.S. housing market is continuing to slow, and most economists and housing professionals predict the housing slump will linger longer than previously forecasted.

A downturn in real estate markets creates several challenges for employers' relocating transferees, the most significant of which is the growing number of homes that end up in inventory. This rise in home inventory leads to higher overall relocation costs and increased property management duties for employers.

Total home sale costs also become less predictable in sluggish real estate markets, and unpredictable home sale costs translate into unpredictable total relocation costs.

Relocation service providers (RSPs) offer several home sale programs, each with varying levels of risk, to help corporate relocation transferees. Employers should consider the advantages and disadvantages of each program to determine the level of risk involved, and those employers who want a predictable and low-risk home sale program should consider a fixed-fee program.

Learn more about the fixed-fee program.

On December 5, 2008, SIRVA announced the appointment of David Byers as the Company’s new chief commercial officer. Byers brings more than two decades of operations, marketing, sales and brand management experience from H&R Block and Foote, Cone&Belding Inc. to SIRVA.

“David’s deep knowledge base in financial products and services, and his experience in developing and managing brands will help drive our relocation services business,” said SIRVA President and Chief Executive Wes Lucas. “Similarly, his background working with distribution networks will bring tremendous value to our moving business.”

Byers was with H&R Block for eight years and progressed quickly through the ranks, from senior vice president and global chief marketing officer to senior vice president of U.S. operations, and most recently, chief operating officer of retail tax services. In these roles, he was responsible for H&R Block’s U.S. operations, sales and business development functions, which comprised more than 13,000 retail locations and 100,000 employees. Prior to H&R Block, Byers’ career included working for global advertising agency Foote, Cone & Belding Inc., Del Monte Corporation, and most recently, he served as chief executive officer of The Mutual Fund Store.

See Press Release
 

According to the Trippel Survey&Research LLC Seventh Annual Relocation Managers Survey: Relocation Management Company Industry©, SIRVA Relocation ranked second in overall performance and satisfaction among the industry’s top six largest relocation companies. The company achieved the highest scores among the six largest relocation providers in eight of the 24 areas surveyed, and it also placed as one of the top three providers in 22 out of 24 areas surveyed among the largest relocation providers. SIRVA Relocation LLC is a subsidiary of SIRVA Inc., a leading global relocation services provider.

“These results are a direct reflection of our steadfast commitment to providing our customers with unparalleled service and value every day,” said SIRVA Inc. CEO Wes Lucas. “Our goal is to be the most trusted and sought-after relocation services provider in the industry based on the work we do and solutions we offer. I am elated to see that customers are recognizing the value we bring to the table.”

Trippel Survey&Research conducted this survey—which launched September 12 and concluded October 1—with the goal of obtaining evaluations from corporate relocation managers regarding levels of satisfaction with firms in the relocation industry. More than 300 survey evaluations—representing 298 different relocation management companies—were received. The six largest relocation management companies in the survey accounted for nearly 75 percent of all evaluations returned.

Categories in which SIRVA Relocation achieved the top score included: Responsiveness and flexibility to your needs; Service recovery; Year-end tax reporting; Management reporting; Identifying trends and responding to them; Suggesting policy recommendations; Suggesting ways to reduce your costs; and Taking actions that control or lower direct real estate costs.

Selling homes in the current real estate market, with so many sellers chasing so few qualified buyers, has been hard on corporate relocation transferees and their employers. Last year SIRVA reevaluated the way it markets and sells homes in an attempt to lower real estate carrying and operating costs and reduce the financial risks of home ownership to clients. The results were impressive.  

After nine months, SIRVA reduced its number of homes in inventory by 86 percent--from 843 to 118 homes. SIRVA has also reduced its client's AVO home inventory by 60 percent year-to-date. SIRVA now has its lowest inventory level in almost five years. Jon Gilbertson, vice president of risk and quality for SIRVA, attributes the success to a new approach that emphasizes local market expertise and home marketing.

As part of SIRVA's new approach, the company reorganized its risk management team to focus on key components of the risk management process and break down each property individually to ensure it is marketed correctly. The group also enhanced its property performance tracking and improved the appraisal review process to ensure homes were priced accurately, thus minimizing loss-on-sale.

For more information about SIRVA's risk management program, please contact Jon Gilbertson at 763.525.3710.

On November 6, 2008, SIRVA announced the appointment of Sean Fernandez as the company’s new senior vice president, operational excellence, people and infrastructure. Fernandez brings 19 years of leadership, operations and consulting experience to SIRVA. He will report to SIRVA President and Chief Executive Officer Wes Lucas, and work from SIRVA’s office in Fort Wayne, Ind.

Fernandez is a proven global executive with an excellent track record in improving business performance and growing companies. Specifically, he has driven improvements in operations, quality and customer satisfaction. In his new role, Fernandez is responsible for overseeing SIRVA’s global operational excellence initiative, building strong teams and a high-performance organization and enhancing information technology capability. This position includes the development and implementation of key process improvements designed to drive customer satisfaction, cost efficiencies and improved quality.

“We are delighted to welcome Sean to the SIRVA team,” said Wes Lucas. “He is an outstanding leader and brings valuable operational capabilities, process improvement skills, product management and a proven ability to grow companies. I am confident that he will play an integral role in helping our company to serve our global customer base.”

See full press release

On November 6, 2008, SIRVA announced the appointment of Gordon Smith as the Company’s new chief financial officer. Mr. Smith, who will work from the Company’s Westmont, Ill., headquarters, brings more than 31 years of financial leadership experience from GE Capital and Asbury Automotive Group to SIRVA. He will report to SIRVA President and Chief Executive Officer Wes Lucas.

“We take great pleasure in welcoming Gordon to the SIRVA team,” said Wes Lucas. “A highly capable and proven finance executive, with outstanding financial leadership experience, Gordon is ideal to lead SIRVA’s financial areas as we build on our strong financial position, deliver outstanding service to our clients, grow our business and continue to create the world’s premier corporate relocation and moving services company.”

See full press release

Accurate and timely accounting of relocation expenses has a far-reaching impact on the overall performance and success of a corporate relocation program, to both the company and the individual transferee.

The company benefits in several ways when a “best in class” expense management process exists, including:

While globalization has opened many opportunities for business, it has created some significant challenges. One leading challenge for global managers is learning to understand and appreciate cultural values, practices, and various nuances in different parts of the world. Experts in international business agree that to succeed in global business, managers should be open to others’ ideas and opinions and have the flexibility to respond positively and effectively to practices and values that are oftentimes drastically different from what they are accustomed to. Cultural training has been shown to improve an individual’s relationships with host nationals and allows expatriates to adjust more rapidly to a new culture and an international relocation.

There are a variety of training techniques that prepare people for foreign work assignments. They range from documentary programs that merely expose people to a new culture through materials about the country’s sociopolitical history, geography, economics, language and cultural institutions, to intense interpersonal-experience training, in which individuals participate in role-playing exercises, simulated social settings and similar experiences in order to “feel” the differences in new culture. Successful cross-cultural programs can include the following:

Local business etiquette. Even the most veteran and prolific employee can have difficulty without an understanding of business etiquette in other cultures. For example, the U.S. tendency to “get down to business” is regarded as rude in Japan, where business transactions often have a greater personal relationship component. An employee who appears impatient with Japanese traditions designed to establish friendship and trust will have little success in business negotiations.

Cultural biases. International relocation assignees should always examine the way their own culture affects their perceptions of right and wrong, good and bad manners, values, dress, and other customs. Cultural training can improve understanding of the cultural forces that affect their own behaviors and help assignees learn how to adapt to new cultural demands and the international relocation.

Customized training. Additional training can include special modules to help the employee and his or her family with their own individual concerns. For example, if the assignee’s children will be attending local schools, modules and resources on education etiquette would be appropriate.

To learn more, please visit our resource library

On October 23, 2008, SIRVA was named to the 2008 InformationWeek 500, InformationWeek’s annual list of the most innovative users of information technology (IT) for the sixth consecutive year.

SIRVA was ranked 85th out of 500 on the list and was recognized for its use of inside Performance Management (iPM) applications. SIRVA uses Web-based iPM assessment tools to create scorecards showing its agents’ performance against corporate goals and their performance against a network of their peers, SIRVA can measure sales, operations, quality, branding, safety, claims and facilities.
See full press release

If you have a group move to manage and are seeking assistance, SIRVA Relocation is able to provide the following services:

Defining Objectives
SIRVA works closely with your Company’s management team to define the overall objectives of the move and ensure their implementation during the move process. As a part of our consultation, we will discuss the Company’s business and human resources goals and objectives, policy issues, the group move timeline, and factors to consider in the cost analysis and process development.

Relocation Cost Analysis
We provide expertise in analyzing the total cost of a group move by detailing the cost impact of policy decisions and local market conditions on both the Company and the employee.

Policy Design
SIRVA can incorporate your business objectives into an appropriate group move policy. A key component of policy design is the solicitation, review and analysis of your employees’ input via the employee survey that we will design to meet the needs of your employee population and the constraints your management has placed on the process. This information, along with policy and benefit guidelines, will result in a Group Move Policy Handbook detailing the corporate relocation program for your employees.

Employee Presentations
We have the depth of experience to assist the Company in securing the employee’s enthusiastic commitment to the move through a carefully planned and professionally presented program for the entire family. This program includes a complete overview of the new destination city and state, plus the ability for employees to ask questions and address concerns about the move. In short, we bring the experts in each resource area to the transferee.

Relocation Resource Center
SIRVA can prepare an on-site, on-going “Relocation Resource Center” for employees and their families, which provides information about the destination city’s schools, housing options, medical facilities, etc.

Information Kit
Each employee will receive a complete package of information about the destination city including, if appropriate, a video about the city. Employees will be assigned a personal relocation counselor who is available to answer questions, research any specific needs they or their family members may have, and arrange for individual home finding trips to the new city (if included in the plan).

Area Tours
SIRVA can organize area tours guaranteed to satisfy your employees’ questions about their new city.

Other services include:
• Home Marketing Assistance
• Home Purchase Assistance
• Home Finding Assistance
• Temporary Housing Assistance
• Spouse Job-Finding Assistance
• Employee Expense Tracking Administration and Tax Calculation Capabilities
• Mortgage Assistance
• Vendor Selection and Management
• Training Material and Programs