Relocation Services Archives

You Know that You Need an Employee Relocation Management Company: What Should You Do Next?

by WHR Global | Jan 6, 2023 | News

Choosing a new Relocation Management Company (RMC) to manage your global mobility and relocation program can feel like a daunting task. It’s important that you choose an RMC that best fits your workplace culture, employee needs, company budget, and work style. You’re not just buying a service or product; you’re also buying a business partner that is an extension of your company and is representing you in the marketplace. You’re also buying a culture, personalities, and processes. You are hiring a company to manage and/or provide services for the most important asset in your company, your employees. So much of the time spent in a traditional bidding process is before a company even speaks with potential suppliers to learn about the supplier’s mission, values, goals, objectives, vision, hiring standards, and key personnel.

When selecting an RMC, it comes down to two options: Going out to bid (competitive procurement) or selecting a supplier on your own (negotiated sale). In this short article, we’ll discuss the following:

What are the pros & cons of going out for bid & what is the most efficient and cost-effective way to go out for bid?
Negotiating with a preferred supplier instead of going out for bid.
Things to consider.

Pros & cons of going out for bid & what is the most efficient and cost-effective way to go out for bid?

Pros

Encourages competition & allows comparison: You’ll have a greater pool of RMCs to choose from and compare. Having RMCs follow a certain format by each answering the same questions allows you to easily compare answers and rule out any RMCs that don’t meet your requirements.

New service offerings: You might learn about other service offerings that you didn’t think to ask for initially.

Fully vet your options: Creating a Request for Information (RFI) and a Request for Proposal (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.

Cons

Time-consuming & costly: The bidding process can take several months, depending on your internal decision-making processes. For complex global programs with hundreds or thousands of transferees, this process may include:

Procurement issuing suppliers the intent to participate in your RFI document (more about RFIs below).
Developing and releasing RFI questions to RMCs.
Reviewing supplier’s RFI responses which may exceed dozens of pages per respondent.
Narrowing down RMCs to invite to participate in your RFP.
Developing questions and releasing RFP questions to RMCs.
Responding to RMC’s questions regarding the RFP.
Reviewing RFP responses which may exceed 80-150 pages for each RMC.
Narrowing down RMCs to participate in best and final presentations and technology demonstrations.
Choosing an RMC.

The organizational costs and time spent can be an immense distraction to your company:

• If you’re soliciting RFPs from 8-10 bidders, and the responses are anywhere between 80-150 pages from each supplier, your personnel must review all completed responses. If you think about the costs of an HR manager, a payroll manager, a procurement manager, a tax manager, an accounting manager, and a logistics manager, e.g., and their combined total hour’s spent planning and reviewing bid solicitations, this can exceed tens of thousands of dollars.

• Once all needed staff reviews responses and the company has shortened the list and invites several prospective RMCs for in-person meetings, how many staff members are taking part in those meetings? What are their annual salaries and how many hours is each employee spending in pre-planning internal meetings, vendor presentation meetings, and post-presentation internal reviews? Even when all presentations and tech demos are conducted virtually, the combined time is immense.

• Finally, what is the opportunity cost to your organization? Each hour your procurement managers, relocation directors, and mobility leads spend in meetings is time taken away from your transferees. While your staff is distracted by RFP responses and presentations, they are expected to simultaneously keep up with their normal workload.

Eliminating the wrong suppliers: Many viable RMCs 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.

Promises of unattainable pricing: For some RMCs, winning new business is more important than meeting your needs throughout a long-term partnership. These RMCs might bid for your business and win the business, even if their proposed pricing is unattainable for their bottom line. This can cause issues during the implementation process or result in a requested fee increase in the first or second year.

Consider Issuing an RFI First

The current RFP process takes place before companies even determine suitability. Consider issuing a Request for Information (RFI) first before issuing an RFP to weed through suppliers. Ask no more than 10-20 questions. If, for example, you need someone with offices in international locations, or you a need high-tech solution, or if you want a provider with a no voicemail policy, you can weed out unqualified bidders immediately. An RFI should ask for references, and you should check those references before inviting providers to participate in the formal RFP bidding process. Pre-screen before inviting bidders to ensure those bidding meet the company’s general qualifications.

Get to Know Only a Select Few to Invite to your Bid

Choose a few potential RMCs and first ask them to provide demos or presentations. Sit down with three favorite potential providers and discuss what’s most important to them. Get to know them and then invite those select few to participate in your RFP. Talk to trusted industry colleagues and find out if the colleague’s current provider is a good fit or not, and why. Determine if a potential vendor’s work style and culture are compatible with your company’s work style/culture

If it just comes down to who has the lowest price, then issuing a full RFP might not make sense. Consider an abbreviated RFP which only covers critical aspects of your program, placing greater emphasis on cost scenarios and projections from the RMCs.

Negotiating with a preferred supplier instead of going out for bid

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 (sole sourcing) that you know will provide the best service based on your relocation requirements, your research, and your prior communications with the supplier. This process works well if you know one or two RMCs that already fit your needs and company culture. This option also works well if you are working within a small window of time. You won’t have to review multiple in-depth proposals—just the proposals from the RMCs of your choosing.

Things to Consider

Consider the Time and Costs

Does issuing a blind bid to 8-10 bidders make economic sense for your company? Are you comfortable with the amount of internal people resources that will be pulled into the process (time and costs)? In other words, what is in the best interest of 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 of 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.

WHR can help:

• Would you like to schedule a WHR product or service demo?
• Would you like to meet to talk about our culture, values, and how we can solve your challenges?
• Would you like WHR to participate in your RFI or RFP?

Related Articles

7 Benefits of Outsourcing Your Relocation Program

8 Things to Look for in a Relocation Supplier

Providing Mortgage Support to Transferring Employees in Today’s Housing Market

by WHR Global | Jan 1, 2023 | News

As companies compete for talent, it’s important that your organization offers the right mortgage support to transferring employees. Whether it’s a new candidate or an existing employee, don’t lose talent because your organization isn’t offering the same or more support than your competitors. Given the current housing market conditions, it’s especially important to evaluate mortgage support so that contracts are not canceled.

According to a CNBC article, “Amid higher interest rates and a softening housing market, home buyers are continuing to back out of purchase contracts at an elevated rate. About 64,000 home-purchase agreements were canceled in August, according to a new report from Redfin. That’s equal to 15.2% of home contracts initiated during the month and similar to the 15.5% canceled in July. A year ago, the share was 12.1%.”

Rising interest rates could also have a negative impact on your transferees and their willingness or ability to relocate. When some employees are finally ready to go under contract and lock in their mortgage rates, the rates could be much higher than they were when they got pre-approved or when they received an accepted offer. This could also cause a canceled contract if the new rate is unaffordable.

“Data from the National Association of Realtors shows that housing affordability has plummeted by 29% over the last year – marking the steepest annual decline on record. The downturn is attributed to rapid mortgage rate and home price growth that has significantly quelled affordability. That’s because buyers of a median-priced home are now facing monthly mortgage payments that are more than $400 higher than they were in 2021,” according to a Business Insider article.

There are many ways that your organization can help transferring employees with mortgages. Below we’ve outlined a host of options that WHR Global (WHR) can facilitate through our preferred mortgage provider network.

Mortgage Interest Differential Assistance (MIDA)

MIDA helps employees when mortgage interest rates are high by easing the gap between current market rates and the lower rates that employees have on their current mortgage. This is not to be confused with a sliding scale (explained below), or a standard 1% loan origination/loan discount benefit because those benefits are applied regardless of the interest rate. The MIDA can be paid as a direct mortgage subsidy through the mortgage company. The MIDA benefit is determined by factoring the lower amount of either the transferee’s current outstanding loan balance (rounded up to the nearest $1,000) or the new mortgage amount. The difference between their current interest rate and the new (higher) mortgage interest rate, for similar products, (i.e., 30-year fixed rate to 30-year fixed rate), and multiplying the difference by the qualifying amount:

An Example from a WHR Supplier Partner, Rocket Mortgage

3.00% Old Interest Rate
5.00% New Interest Rate
2.00% Interest Rate Differential X $400,000 Current Loan Balance (Old Mortgage)

$8K is the yearly mortgage interest differential (.02 x $400K = $8K)

Payout Example

Year 1: $8K x 100% = $8K Total, or $666.66/month ($8K/12 = $666.66)

According to Rocket Mortgage, “The above is just an example. You can design the overall MIDA structure to what works best with your company culture and relocation program needs. For example, you can pay the full MIDA amount in year one only, adjust the percentages each year, or lengthen the term of the MIDA payment, etc.”

Interest-Based Mortgage Subsidy

This option slowly increases the transferee’s interest rate over time. Your organization pays the difference between the current note and the lower subsidized rate. Every year, the employee’s responsibility will increase by a 1% higher subsidized rate. This helps transferees transition into the higher mortgage payment. It can be applied toward principal and/or interest. If the subsidy is interest-based, your organization’s payout is dependent on the loan amount (which may be variable). To avoid this variable, some companies define a fixed dollar amount.

Dollar-Driven Mortgage Subsidy

When an employee is moving to a higher cost of living area (not due to higher interest rates), this option provides a pre-determined dollar amount based on the employee’s level. The amount can even be determined pre-move and pre-home selection. It can be applied 100% to principal and/or interest, based on the employer’s policy. It cannot exceed the monthly mortgage payment amount. Sometimes the subsidy is payable over a period of time that the employer chooses, 3 years, e.g. The payment is made directly to the mortgage company and applied against the employee’s mortgage payment.

Sliding Scale: Buying Down Points

A one-time expense used to permanently buy down the interest rate on a new home. This is especially helpful when interest rates are rising. Your organization will designate at what rate the scale starts and what mortgage discount points will be covered for each interval of the scale. Mortgage points are prepaid interest paid upfront in exchange for a lower interest rate and lower monthly payments.

Loan Discount Points (points) – Fees used to buy down the interest rate at the time of origination for the life of the loan. Points are calculated as a percentage of a loan amount. E.g., 1 point is 1% of the loan amount. One discount point does not equal a 1% reduction in interest rate. The value of a loan discount points is based on market conditions.

Example

Let’s say the current market interest rates on a 30-year fixed rate loan is 5.25%, the transferee would be eligible for 1 loan discount point based on the example sliding scale below based on $400K loan amount:

0% – 4.99% = 0 pts
5% – 5.49% = 1 pts = $4K
50% – 5.99% = 1.5 pts = $6K

Buying Down Points Example on a $200K loan

0 points (4.5% APR*)

1 point (4.25% APR*)

2 points (4% APR*)

Costs per Point(s)

$2000

$4000

Employee's Monthly Payment

$1,013.37

$983.88

$954.83

Total Employee Savings on a 30-year loan

N/A

$10,616.40

$21,074.40

Other Possible Ways to Help the Transferee

$3K credit: Employer to cover the closing, or the credit could be used for escrow, or used to buy down the interest rate.

“It’s so important to provide the right benefits to transferees, including mortgage support. As an organization, you don’t want to lose a valuable employee or a potential new candidate to another company.”

Ben Koceja

Client Services Manager, WHR Global (WHR)

As a Relocation Management Company, WHR can provide your employees with our pre-approved network of mortgage providers.

Four Things You Didn’t Know About Relocation Management Companies

by WHR Global | May 14, 2022 | News

If you are new to learning about the employee relocation industry, you are not alone. In fact, employee relocation services recently made Inc. Magazine’s list of “The 6 Best Industries You’ve Never Heard of.”

In the simplest terms, relocation management companies like WHR Global provide professional services to employees who are being transferred by their employers. Many variables factor into the need to relocate an employee—a promotion to a different branch, opening a new office, or even the movement of an entire headquarters to a new location on the other side of the globe.

So, what are details of the professional relocation process? We’ve broken down the top 4 things a relocation management company does.

1. Out With the Old

Relocation management companies (RMCs) help relocating employees market and sell their current homes. Professional staff working with the “transferee” should be real estate licensed (they are at WHR Global) to help the assigned real estate agent price the home to sell quickly and for maximum value. These staff must follow client-specific policies, as the benefits one company offers its employees may differ from others, such as if an outside buyer must be found or if the company will buy out the home on the employee’s behalf. Relocation policies are designed to relieve transferees of guesswork and function as a roadmap, detailing the steps of relocation start to finish.

2. In With the New

RMCs connect employees with a home-finding agent in the destination location to purchase a home or find rental or temporary living accommodations. It’s the agent’s local knowledge that helps the employee become acclimated to the types of homes they can expect in his or her new location—whether it’s a three-bedroom house in Ohio or a high-rise unit in Singapore. An area tour is usually scheduled to help the employee find the best neighborhood and home to meet his or her needs, in addition to exploring local dining options, entertainment, shopping, transport, and schooling options for the family. An area tour is especially important for those relocating internationally to become familiar with the local “norms” and what to expect as an “expat.”

3. Places in Between

RMCs also help coordinate the physical move of an employee’s household goods from one location to the other. WHR Global works with a global network of household goods carriers as well as auto shippers to move family belongings from A to B—safely, timely, and all over the world.

4. Beyond the Move

Additional services offered by most RMCs include: storage for household goods shipments; expense management and reimbursement; immigration and visa assistance; language and cultural training; local school search assistance; destination spousal/partner career support; compensation management; and tax assistance on all these benefits.

3 Truths About Outsourcing Your Relocation Program

by WHR Global | Oct 3, 2018 | News

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.

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.

2017 WiERC and CRC Joint Meeting on Relocation

by WHR Global | Aug 17, 2017 | News

As a member of the Wisconsin Employee Relocation Council (WiERC), I had the pleasure of sponsoring and attending the Joint Meeting between the WiERC and the Corporate Relocation Council of Chicago (CRC) yesterday at the incredibly beautiful and prestigious Grand Geneva Resort and Spa in Lake Geneva, WI.

Titled “The Grand networking event of the year,” the occasion brought in over one hundred and twenty professionals from both councils, which included those in HR, global mobility, relocation management companies (like myself), van line representatives, and real estate brokers.

The agenda included two educational sessions in the morning followed by the option of a boat tour around the lake, a nine-hole scramble on the difficult Brute golf course, massages at the spa, or a cooking class—so a tough day had by all.

Trends in Relocation

The first educational session talked national trends and the potential negative effects on the relocation industry. The five-person panel included professionals from two separate real estate agencies, a van line, a corporate housing agency, and a destination service provider.

Local Markets

The two real estate agencies provided some staggering, but not surprising, figures pertaining to the national real estate market, as well as markets in both Wisconsin and Chicago-land. The numbers concluded that we are amid a heavy seller’s market with extremely low inventories; homes are flying off the market quickly, and prices continue to gradually rise. Both Wisconsin and Chicago followed these national trends closely. One fact that remains true, even as property values continue to rise, is the Midwest is the most affordable area in the country, making it incredibly attractive to corporations as well as new people entering the workforce.

Real Estate Technology

The “monster under the bed” identified by these real estate professionals was how technology is threatening the real estate industry as buyers, sellers, and renters are looking for a quick fix through websites like Zillow. Amazon.com was mentioned several times as another company trying to get into the real estate industry and possibly take away from what agents do best—provide a person-to-person, hands-on, and caring experience the industry has been built on for so many years.

All in the all, the real estate industry continues to scramble, like the rest of the world, to keep pace with technology and the needs of the new workforce.

Household Goods

The van line representative outlined some current difficulties within the moving industry, which was headlined by the shortage of drivers throughout the United States. The current shortage is roughly 40,000 drivers and is estimated to quadruple over the next decade. Van lines are struggling to find solutions to reach the younger generation as well as attract more diversity, as many current drivers are older Caucasians retiring from the workforce.

The moving industry is also struggling to keep up with smaller shipments, more demanding move times, and, of course, technology-based difficulties.

Other Services

The final two speakers both continued the trend of technology disrupting their industry; although, the corporate housing and destination services sectors seemed to be doing a better job of finding and implementing solutions.

Data Security and Relocation

The second educational session was incredibly interesting.

The speaker discussed data security from a personal and business standpoint and how we are all responsible for managing the risk related to data security. Whether it be protecting yourself by not using a debit card online, or protecting your clients by being vigilant with the emails you open, we all need to pay attention to the details of our online activity—not just with relocation data.

Main Takeaway

Technology, technology, technology! Technology struggles was the opening topic and conclusion to the event.

Companies like Amazon.com are infiltrating every industry by finding the gaps in the services we provide and developing better solutions at a much faster rate. If we all don’t adapt and evolve, we as employees will be left by the wayside and our companies will struggle to stay afloat.

I hope this offers you some food for thought and ideas for improving the relocation industry as we know it today.

Thanks to all who helped put on this amazing event!