A Deep Dive into Program Transparency

by | Nov 12, 2015 | News

Transparency is a key component in understanding how the third-party supply chain is being compensated for services related to moving your employees.

employee relocation

Transferring human capital is an expensive proposition, especially considering the status level of employees being moved—typically key leaders and future leaders of an organization. Plus, the majority of these employees are going to sell their largest investment: Their home. That’s a lot of dollars riding on the fate of a successful move experience.

Providing a reliable, professional relocation experience is of the utmost importance when transitioning top talent from one city to another. It is only common sense that a relocation provider utilize the absolute best third parties in assisting with moves—such as top-performing real estate brokers, appraisers, home inspectors, and household goods movers.

We recognize that referral fees exist in leveraging these third parties, but to what extent are these suppliers being pushed for higher fees in exchange for business?

Transparency in Relocation

As an example, one large relocation provider just implemented a minimum 40% referral fee on real estate brokers. Implementing high fees can be a short-term win for the relocation provider, but do the best real estate agents even want or desire this business? Not likely, as agents want business that doesn’t continuously erode their margins.

As another example, if your organization provides a Guaranteed Buyout, then you know appraisers are used in determining the value of an employee’s home. A common approach for some relocation providers (that you may not be aware of) is to add service fees on top of the appraiser fee, or pay a fee where the lead appraiser has to leverage a “rookie” to perform the valuation. This often occurs when the fee the relocation provider is willing to pay is simply too low. An employee’s home is likely his or her single largest investment, so wouldn’t you want a lead appraiser to perform the valuation and pay the full fee for his services?

Third-party relationships are critical to get right—not only for transferring employees whose new career positions ride on successful move experiences, but also for the employer in the event properties needs to be sold out of inventory.

These are just some reasons why transparent pricing should matter to your relocation program. There is nothing wrong with referral fees, but having an understanding of what level of professional and satisfactory service you and your top talent receive is, ultimately, reliant upon what is being charged.

You would be well served in knowing the fees being charged and understanding the potential implications of high fees: Low service and potentially failed relocations.

Is Your Relocation Management Company Transparent?

by | Oct 8, 2015 | News

Cost transparency. Every relocation company promises transparent pricing and fees, but how do you know your current provider is disclosing all costs and revenue streams to you?
relocation management company, relocation management companies

According to Worldwide ERC® data, relocation assistance is the single most expensive HR benefit a company can provide to its employees. This means it’s critical for you to understand the associated fees, along with knowing potential revenue opportunities, so you can evaluate the return and be the expert on your company’s relocation investment.

You need to work with a relocation provider that discloses all operating costs. This ensures you are focusing on the total expenditure and can take advantage of any potential revenue opportunities. It also prevents mismanagement of your relocation program, making sure your provider’s fee structure doesn’t result in lost productivity from your talent.

Here are 4 ways to tell if your relocation provider is being transparent about your relocation program’s costs.

1. Ask About Your Relocation Program’s Referral Fee Structure

Do you collect referral fees on departure and destination home sales, or does your service provider?

And has your provider disclosed what they are collecting, or offered a share in these fees?

2. Ask About Hidden Fees

Are there mark-ups added to third-party services?

For example, does your provider collect a commission from household goods moves? Do appraiser fees come through as a direct pass-through expense, or is there a mark-up?

What about other expenses, such as destination service providers, title companies, and so on?

3. Ask About Other Revenue Sources

Are there connections to other third-party services where referrals or rebates are offered, unbeknownst to you?

4. Ask If Your Provider has Affiliations

Relocation providers with affiliations (or formal partnerships with select real estate brokerages, appraisal companies, temporary housing firms, and so on) may try to tout these partnerships as beneficial for you and your transferees. While these providers may have conducted extensive due diligence to make sure they were partnering with suppliers at a mutually beneficial discount, it doesn’t mean there aren’t better options for you and your employees to consider outside of these affiliations.

As an independent company, WHR Group does not operate under affiliations or formal partnerships with third-party relocation suppliers. This means our clients have choice when it comes to suppliers and a better opportunity of finding suppliers with higher service or lower cost than affiliates currently provide.

Take these four items into consideration when evaluating your current relocation provider’s business and especially before you enter into future contracts.