5 Steps to Improve Employee Satisfaction with Corporate Housing

We have yet to relocate an employee who is excited about moving into temporary housing. Let’s face it, they want to be in their own homes, in their own beds, surrounded by their own belongings. Unfortunately, it doesn’t always work out that way. Things come up throughout the relocation – closings get delayed or employees can’t find new homes in the allotted timeframes. And in many cases, you need your employee to start in the new location as soon as possible.

Either way, temporary, or short-term housing is often necessary for relocating employees. Moving into corporate housing is not an ideal situation; however, this benefit can greatly affect the overall satisfaction and happiness of your relocating employees. Just knowing the benefit is available should something happen significantly reduces employee stress levels.

Ideally, we’d be able to time the relocation perfectly without the need to use temporary housing. And even though this doesn’t happen every time, it’s important to have a plan in place so we can make your employees’ relocations as smooth and stress-free as possible.

Step 1: Make temporary housing part of your relocation policy

Temporary housing comprised of 67% of all exceptions reported in our 2018 Mobility + Culture Benchmark Report. That’s a lot of employees requiring temporary lodging or extending stays due to unforeseen circumstances. This tells us that it’s a benefit not to be excluded lightly, especially if employee satisfaction is one of your top priorities.

Adding this benefit to your relocation policy offers you and the employee a multitude of benefits. The employee can use their time in temporary housing to become acquainted with their new location and avoid the pitfalls of moving into an area they don’t like. Your employee also benefits from not having to worry about any home selling or purchasing delays, as they will have somewhere to go if something should temporarily fall through.

Your company will also reap the rewards of including temporary housing in your policies. Exception reviews and management takes a lot of time – time that you could spend doing more important things. Additionally, you’ll be able to control cost by capping the temporary housing benefit and/or limiting timeframes based on your relocating employee’s needs.

Step 2: Learn about your employee’s needs

Speaking of employee needs, it’s important to remember that every relocation is different. Employees may have families, pets, disabilities, and/or lifestyles that require the use of specific corporate housing units. Before choosing a unit on your employee’s behalf, it’s imperative that their needs are learned. This process should be managed by your Relocation Management Company (RMC) through the employees’ dedicated Relocation Counselor. Part of the Counselors’ job is to learn what the relocating employee will need out of their corporate housing.

Do they have children?

Does the employee need to live within a certain school district for their children?

How many bedrooms are required for the family?

Do they have pets? If so, how many?

How many cars will need parking permits?

Does the unit need to be handicap accessible?

There is no one-size-fits-all solution when drilling down into what your employees need. At a bare minimum, the needs assessments ought to include considerations for reliable transportation, differences in family dynamics (for example, a two-child household versus a five-child household) and distance from the office. Accounting for these three basic needs goes a long way to ensure that employees are happier and more successful in their new roles.

Step 3: Location, location, location

Location is another huge consideration when selecting temporary housing options for your employees. No one wants to commute an hour and a half to work every day. Most employees like to live as close to their new office location as possible; however, the reality is, there are plenty of situations when it’s too expensive or just doesn’t align with your employee’s lifestyle.

The cost of housing is most problematic when deciding which location works best. It is best practice to cap temporary housing benefits, so a prime housing location close to the office may not suffice. It’s important to make sure your employees understand how close their temporary home will be to the office. If being closer to the office is important to them, explain that they may have to forgo included amenities.

Step 4: Don’t forget the amenities!

You want your employees to feel as much at home as possible while in temporary housing. After all, the less stress they experience at home, the less stress they’ll carry with them to work.

While learning about your employee’s needs, your RMC should also learn about what your employee’s want. What will make them feel most at home?

Do they want an on-site gym?

How about a dog park within walking distance?

Should the unit be close to available public transportation?

Learning just a few of the little details about the relocating employee will greatly impact their satisfaction with their corporate housing.

And it’s not just amenities for the actual relocating employee that we discuss. The needs and desires of their family must be considered as well.

Do they need to be close to a daycare center?

Would they like to live close to a public park?

What are the area schools like?

Step 5: Make use of your RMC’s network

After learning the full picture of your employee’s needs and wants, it’s time to select a temporary housing provider. If your RMC doesn’t offer a vast network of suppliers, they probably won’t be able to meet all of your employee’s desires when it comes to temporary housing.

An RMC should fully vet and offer multiple choices for your relocating employees. That’s why we focus heavily on vetting local corporate housing options. We want to help your employees and their families feel at home in their new location. By offering more options we are also able to provide more cost-effective solutions. At the end of the day, your employees should be able to choose the temporary housing unit that best matches their budget with their needs and desires.

U.S. Domestic Policy Designer

For companies who are looking to revamp their current policies, or build a new one, this designer builds a custom policy with answering just a handful of questions.

5 ways to improve your exception management process

Sometimes, no matter how detailed and inclusive your employee relocation policies are, you run into exceptions, or special requests from your employees. This might include wanting to bring children on house hunting trips, needing an additional month of temporary housing, moving a pet, or asking for an extension on household goods storage.

Unique circumstances arise before and during the move. It’s inevitable. That’s why most companies allow for exceptions to their policies.

relocation exception management

Our 2018 Mobility + Culture Benchmark Study discovered that only 28% of companies consider themselves as having flexible, easily adapting programs. The remaining 72% tend to stick closely to their outlined approach. Even though most companies are consistent with their relocation programs, 64% said they were more likely to make exceptions to their policies for relocating employees.

exception management

Exception management is a crucial component of any company’s relocation program. Policies are created to take into account the majority of a relocating employees’ needs; however, no two relocations are ever exactly the same.

Managing expectations minimizes exceptions

Before hiring a new employee or transferring an existing one, it’s important to thoroughly review and understand expectations between you, your relocation management company (RMC), and your employee. Taking a proactive approach to your employees’ unique needs and concerns is the most effective way you can manage exceptions. Your RMC should also take ample time to review the applicable policy with the transferring employee so that their expectations align with your programs parameters. Time spent managing expectations is time well spent as it will result in fewer policy exceptions.

Be realistic, knowledgeable, and flexible

Knowledge is everything in relocation. In the Mobility + Culture survey, we also asked respondents to provide the most common exceptions they were making. Here’s what we found:

%

Temporary Housing

%

Benefit/Time Frame Extension

%

Additional Household Goods Services

%

Household Goods Storage

%

Additional Allowances

Simply knowing the most common exceptions can help prepare you for future relocations. You’ll be more realistic when it comes to what you approve, and more flexible in what you offer.

Preparing for unforeseen events

No one can predict all possible outcomes of a transfer. What if the old homeowners are not able to close on their new house as quickly as anticipated? What if household goods are delayed for months by customs? Most employee transfer policies do not cover such instances because they occur so rarely.

However, on the off chance that something unforeseen does happen, your RMC must be able to quickly adapt and manage the situation. A closing delay could mean additional temporary housing, and additional temporary housing could mean additional household goods storage. The goal of exception management is to stay proactive and anticipate the employee’s needs before they even know what they are themselves.

Tracking and reporting

Only 64% of companies that make exceptions to their policies utilize technology for tracking. The ability to track and report exceptions, including ones approved prior to the transfer, provides your company with a baseline of realistic expense expectations. This also allows you to estimate the cost of future exception requests and make policy changes as a result.

Make policy improvements

We believe (and have seen through our own work) that keeping a close eye on exception trends within your program may allow opportunities for policy revisions, thus saving you the time-consuming task of processing the same exception multiple times. However, we found that only 62% of companies make changes to their policies based on exceptions. Policy recommendations and improvements should be ongoing and provided by your relocation company. This will ultimately help you control cost and attract and retain your best employees.

3 Truths About Outsourcing Your Relocation Program

As you know, there’s a lot that goes into relocating an employee – you have to coordinate the move, administer expenses, review and approve exceptions, audit invoices, and manage third-party suppliers.  You have to stay up-to-date on real estate market trends, immigration laws, and tax reforms. And all the while, you are responsible for truly guiding your employees and their families through the entire relocation process.  

It’s a lot. We get it.  

We have no doubts that you can handle the relocation process on your own, but you don’t have to. The relocation industry exists to help you provide your relocating employees and their families with the best – the best service, the best suppliers, and the best processes.  

relocation management

Partnering with a relocation management company (RMC) not only helps you get your best and brightest talent to wherever they need to be, it also: 

Reduces Risk 

You aren’t confined to just one moving company, temporary housing provider, or realtor because any RMC worth its salt will have a certified network of global suppliers available to you. No more online searches for untrustworthy companies, just quality vendors determined to provide you with fantastic service and competitive rates. 

Controls Cost

There’s a common misconception that hiring an RMC will cost a significant amount more than running your program in-house. However, the reality is, RMCs are constantly moving high volumes of transferring employees for multiple clients every year. This means they are building strong relationships with suppliers, receiving volume discounts that don’t change, even during peak season. You can also be assured your policies are reviewed regularly to avoid unnecessary dollars spent. 

Saves Time

In-house relocation programs tend to rely on multiple departments – accounting, payroll, recruiting, HR – all requiring a say in how the relocation is managed. In most cases, relocation isn’t their primary job function, and when this happens, oversights can occur, resulting in unforeseen delays. Overpayments, billing errors, and invoicing mistakes can all take additional time to sort out – time your employees just don’t have.  

Managing a relocation program is difficult enough without also having to review another department’s involvement. RMCs do one thing and one thing only: manage relocations. This means they can anticipate your employees needs before they even know what they are themselves. Your employees will experience more consistency in their relocation packages and you’ll enjoy having a simplified process.

 

At the end of the day, we all want the same thing – happy, stress-free, productive employees that are ready to get to work in the new location. And to get there, we need to make sure they get the white-glove service they deserve. Let’s face it, relocation is one of the most stressful events your employees and their families will ever experience. We can’t let them down. 

See what type of relocation solutions WHR Group can offer your program today.

Choosing the Right Home Sale Benefit: BVO vs Direct Reimbursement

The Guaranteed Buyout (GBO) home sale program is typically the highest-level home sale benefit a company will offer its relocating employees, as it guarantees a home sale for employees based on appraisal value. However, the risk associated with this type of home sale, considering the employee’s home is then taken into inventory to be resold, may not be the best option for your relocation program. There are two additional home sale options that present less risk for your company—the Buyer Value Option (BVO) and Direct Reimbursement (DR).
<img alt="bvo">,<img alt="WHR Group">

So, what’s the difference between DR and BVO?

 

The BVO program is similar to a GBO in that you will be purchasing the home from your employee. However, with the BVO program, you will only purchase the employee’s home if they secure an outside buyer first. The great thing about the BVO program is that your company and employee will experience the same tax benefits that you would receive with the GBO. This means the home sale cost can be considered a business expense for your company as opposed to taxable income for the employee. This can occur because it is a three-part transaction, which includes your employee securing the buyer, the company purchasing the home from the employee for the agreed sales price, and then your company will sell the home to the outside buyer. Your employee won’t have to pay for any home sale costs or attend closing.

 

With a DR program, your employees will be responsible for selling their homes on their own. They will need to secure the buyer, as well as pay closing costs and commission fees up-front. You may then reimburse the employee all or part of these costs depending on your relocation policy. The IRS considers this type of reimbursement as taxable income, so, in order to cover that additional cost for your employee, you will need to gross-up the reimbursement.

 

                           Pros                            Cons
Direct Reimbursement> No risk of bringing homes into company inventory

> No tax benefits for your company

> Additional cost of gross-up

> Employee responsible for all costs up-front (closing costs, commission fees, inspections, etc.)

> Employee must attend closing

> Longer relocation process

Buyer Value Option

> Tax benefits for your company

> Employee not required to attend closing

> Broker Market Analysis completed by two qualified Real Estate Agents

> Home sale could fall through, resulting in home going into inventory

 


How do you choose which home sale benefit to offer your relocating employees?

 

It’s really all about what is going to work best for your employees, your company, and your bottom dollar. While it may seem easier and less costly to have your employees sell their homes on their own and reimburse them later, this isn’t necessarily the case. You could be spending an exponential amount more using DR because of tax and gross-up

 

A concern many companies have with the BVO program is they may still have to take homes into inventory. So, why then would you want to offer a BVO when there is still that possibility? While there is a chance a home could go into inventory if a sale falls through, it is minimal. The BVO process typically includes two qualified agents completing Broker Market Analysis reports, a comprehensive marketing strategy created by your relocation counselors, and a full review of all offers with your employees to make sure the offer is bona fide. Your employee’s relocation counselor will then follow the offer through to closing to ensure everything goes smoothly.

 

 When a corporation reimburses an employee for relocation expenses, the IRS treats that reimbursement as ordinary income, taxing it at the rate dictated by the employee’s tax bracket.

 

       Direct Reimbursement          Buyer Value Option
Home Sale Price$300,000$300,000
Real Estate Commission (6%)$18,000$18,000
Closing Costs (2%)$6,000$6,000
TOTAL COST TO SELL HOME                                     $24,000                                     $24,000
Gross-Up Tax Assistance (40%)$9,600$0
TOTAL COST FOR CLIENT                                    $33,600                                    $24,000
   
CLIENT SAVINGS                                             $0                                      $9,600

 

The average home costs $300,000, which means if you are offering just 10 employees a home sale benefit, you could be saving roughly $96,000 annually by using a relocation management company and offering a BVO program.

 

 

The Pros and Cons of Going Out to Bid for a Relocation Supplier

So, you have made the decision to outsource your employee relocations to a Relocation Management Company, or RMC. If only that was where the work ended!

Now, you must choose the one RMC that best fits your workplace culture, employee needs, company budget, and any other criteria that you require in a supplier. With so many RMCs to choose from, the question becomes how do you find the right one?

relocation suppliers

The Procurement Process

When selecting a relocation supplier, it really comes down to two options: Going out to bid (competitive procurement), or selecting a supplier on your own (non-competitive procurement).

Procurement Option 1

Going out to bid, also known as competitive procurement or open tendering, occurs when you send out a bid request, typically in the form of a request for proposals (RFP). RMCs can choose to respond to your request and submit a proposal explaining their company, capabilities, and pricing. Once you receive the proposals, you will compare each against your most important evaluation criteria. This process can include multiple rounds of meetings or bidding.

Procurement Option 2

If you’ve already decided which RMC you want to pursue based on your research and previous communications, then you don’t need to open your search to other suppliers. This non-competitive procurement process, also known as sole sourcing, occurs when you choose an RMC without a bidding process. However, in some instances, a company will choose two or three RMCs to reach out to, resulting in a smaller, more intimate bidding process.

Each procurement process has its own pros and cons, so it’s essential that you choose the path that best suits your company’s and relocating employees’ needs.

Advantages of Going Out to Bid

  1. It encourages competition: Typically, when you go out to bid, you will have a greater pool of RMCs to choose from, and those responding are likely to offer you their best pricing right away. Another consideration is you may learn about other benefits or service offerings that you didn’t think to ask for initially.
  1. Advocates transparency: The idea behind the bidding process is each RMC will essentially lay all their cards on the table: They show you their pricing, services, and value-adds, and you choose a supplier based on those responses. This results in a fair selection process while offering you a clear vision of what is most important to your company.
  1. Easily compare different RMCs: Having RMCs follow a certain format, and each answering the same questions, allows you to easily compare answers and rule out any RMCs that don’t meet your immediate requirements.
  1. Fully vet your options­­: Creating an RFP lets you choose what you want to learn about the responding suppliers. This helps you fully understand what each RMC has to offer and allows you to ultimately choose the company that best fits your needs.

Disadvantages of Going Out to Bid

  1. It can be time-consuming: The bidding process can take anywhere from 2 – 6 months, or even longer, depending on your internal decision-making process. It also involves several intricate steps from RFP development to initial bids and follow-up questions to final presentations and on-site visits to help you make your decision.
  1. Associated costs: It will undoubtedly cost more to go through the RFP process than to simply choose an RMC to work with. The cost of developing the RFP, screening suppliers, reviewing responses, and follow-ups can take a toll on your company’s time and budget. Typically, a company’s relocation program accounts for 90-95% of the relocation “spend”, with only 5-10% being paid out to the RMC.
  1. Eliminating the wrong suppliers: There are many viable RMCs that simply don’t participate in competitive bidding opportunities. The reasons vary from high associated costs to having a different pricing structure that does not compare easily in an “apples to apples” review process. You could be missing out on an RMC that would be your ideal fit.
  1. Promises of unattainable pricing: For some RMCs, winning new business is more important than upholding your needs throughout a long-term partnership. These RMCs will solely bid for your business to undermine competitors, even if their proposed pricing is unattainable for their own bottom line. This can cause a headache during the implementation process, or result in a requested fee increase in the first or second year.

Choosing Non-competitive Procurement

If going out to bid doesn’t sound like the best option for your company, the other option is the non-competitive procurement process.

You can select a supplier you know will best service your relocation requirements based on your research and prior communications. This process really works best if you know one or two RMCs that already fit your needs and company culture.

This option also works best if you are working within a small window of time. You won’t have to review multiple in-depth proposals—just the pricing proposals from the RMCs of your choosing.

Next Steps

So, ask yourself, what is in the best interest for your company? Do you have the time to fully vet RMCs through a competitive procurement process, or do you need an RMC now? Do you have a couple RMCs already in mind, or do you need more information on other options out there?

Selecting an RMC is an important business decision for your company. You want to find an RMC that best meets your company’s needs, whether that be high-quality support for your relocating employees, lowest cost, the most advanced technology, or a combination of all three.