What are the Biggest Signs it's Time to Find a New Relocation Management Company? Plus 5 Steps for Finding a New RMC!

In a time of skill shortages and an ever more connected world, having the right Relocation Management Company (RMC) can offer your company an upper hand over your competition. However, selecting the wrong Relocation Management Company can cost your organization dearly. In this article, we share the most significant signs its time to find a new Relocation Management Company and what to do about it.

Employee Relocation is complicated with its intersection of talent, tax policy, innovation, immigration regulations, and other moving parts. Relocating employees is intricate, and assistance from the right Relocation Management firm is essential. Many growing businesses have no idea how to find the assistance they need to support their relocation program. They often realize the Relocation Company they chose to help with their relocation program was a mistake once it's too late.

For lots of companies, employee relocation starts in an ad hoc way. There are no guidelines or policy benefits, so the program frequently includes an uncomplicated reimbursement of relocation costs as they happen. It is a prime time for organizations like this to consider an official, outsourced relationship with a relocation management business (RMC) and well-thought-out relocation policies if this describes your company.

When is it time to go out to bid for a new Relocation Management Company partner?

1. Employees are not happy with their relocation experience

This is the most significant sign that it is time to find a new RMC. How is your current RMC taking care of the employee experience while they are being relocated? Would the employee recommend the experience to other employees inside or outside the organization? Does the RMC understand and reflect the core values and culture of your organization? After all, an organization's talent is often cited as the number one resource. If employees feel like their relocation experience to a new location is terrible, it poorly reflects the organization itself. When relocations don't go well, employees tend to start looking for positions at other organizations.

2. Costs are exceeding budgets

When RMCs are not keeping costs contained and recommending policy improvements to save money while maintaining a high employee experience, it is time to go out to bid. Relocating an employee, in general, can be a costly proposition. Therefore it makes sense to make sure that you have an RMC advocate for your organizational financial goals. It is essential to make every relocation dollar spent go as far as possible to make sure you get as much bang for your buck as possible.

3. Tax annoyances become big problems

Your RMC can do many things right, but if they mess up when it comes to finances, it can blow up in your face. Relocation financial disaster is most prevalent in the area of taxation. In all employee relocations, some benefits need to be treated from a tax perspective differently than income. Suppose this isn't handled in a proactive and ongoing way. In that case, simple administrative processes mishandled can create tax disasters for the employee and their organizations. The worst-case scenarios include having your entire organization receive an IRS tax audit. When audited, you may have to pay back penalties which can be a PR nightmare. Still, more than anything, it will tie up valuable organizational resources to go back and accurately report on everything needed in an audit. This should never happen in a professionally run relocation program from an RMC advocating for your needs.

When I decide to go out to bid for Relocation, what do I need to do?

You need to start an RFP process…

What Actions Do I Need to Take Before Issuing a Request for Proposal (RFP)?

A competent RMC can help you guarantee you offer the relocation support required to satisfy your retention, talent, and recruitment mobility goals while lessening tax exposure for your business and your employees. Ensure you engage the top business relocation companies during your RFP process. There are five steps to take internally that will lead to a more thorough RFP process. Furthermore, check out this guide from the leading HR organization in the world, SHRM .

Step 1 – Understand Your Current Relocation Program

Answering these questions will help you understand your relocation program needs:

• What is the size and scope of my current program?
• How many employees do I move per year?
• What types of services do employees need when being relocated?

Before you connect to the relocation management companies, try to discern your organizational needs. Think of previous relocation activity, if any, and the benefits you used. If you have a current RMC in place, request from them Relocation Activity reporting for the last few years to better understand your program.

If you have no experience with Relocation, you should consider:

• What is unique about your company culture? How does that influence relocation?
• What is your organization's approach to benefits? Are you a leader in your industry, conservative or competitive?
• What do your competitors offer as it relates to Relocation?

You do not need to have a formal plan or all the answers at this phase; however, a common-sense understanding of where you want to end up will be helpful. This preliminary thinking will help you determine the shape of your program and choose among the top employee relocation companies to discover the one that's right for you.

Besides learning more about your culture, the relocation management company will ask you particular questions about your anticipated employee relocation program volume to provide an appropriate response to your RFP and price based on your needs.

What questions will an RMC ask to provide an RFP response and pricing?

• How many individuals do you expect to move within the US each year? Internationally?
• The number of are property owners? Renters?
• Where are your typical relocation locations?
• Do you currently offer homesale assistance?
• What are your "pain points" or recurring relocation issues?

Step 2 – Who within your organization should be involved in deciding on the next RMC?

Your business ought to designate a corporate relocation program manager to handle the search process and, ultimately, own the RMC relationship. This is often an HR or benefits supervisor. More broadly, you should consider adding other stakeholders from other functional groups such as procurement, talent management, recruitment, payroll, and or finance, etc.

Many organizations have a procurement department that takes on a Relocation RFP as a project they participate in or manage. Procurement professionals can be of considerable assistance in handling the process. Still, it is crucial that the procedure centers on your requirements, not simply finding the lowest bidder.

Step 3 – Which Companies are the Top 3 Best Fits for Our Organization?

Once you have decided on the top 3 relocation management options for your organization, the next step is to schedule presentations. Typically at this stage, it is common to have presentations from the top 3 companies you have selected based on your criteria. While the selection shouldn't entirely be based on the presentation, it should be another critical data point.

Here are some critical questions to ask during a Relocation RFP Presentation:

• Do you feel comfortable working with the proposed day-to-day contact?
• What happens when something goes wrong during a move?
• How are after hours calls and emails handled?
• What is their turnaround time on expense reimbursement?
• What is their employee satisfaction rate?
• What is their satisfaction rate among senior executives?

Step 4 – Making Your Selection - How do I find the best employee Relocation Management company?

After the presentations, typically, the next step is to narrow the process further down to 2 more providers. You have the option of requesting more information from each provider or selecting the company that checks the boxes for your organization based on your needs.

Step 5 – Signing an Agreement – What is typically included in a Relocation Management Contract?

Once you've selected the company that is the best fit for your relocation program, it's time to let them know they've been selected. Likewise, it is time to tell the other bidders that they weren't selected this time but that you will keep their information on file. If a losing bidder asks for information on why they lost, you get bonus points for providing that info candidly.

In any case, you have selected a winning bidder. Now is the time to sign an agreement. Typically, an RMC will provide their standard boilerplate agreement to kick off this process. Don't be alarmed if the agreement goes through a few rounds of edits. It is vital to make sure terminology is synced up between the two organizations and make sure both organizations are on the same page. Sometimes it is helpful to schedule a call with both groups, including legal, to talk through any sticking points when they come up. Afterward, both groups can move forward in a positive way towards contract language that meets the program's needs and goals.

Finally, you are ready to sign the contract. The next step is to schedule an implementation kick-off meeting. The new RMC should handle the rest after that, including providing information on how to transition employees currently in process (if needed). After that, you are off and running with a new partner. Congratulations! You have done the due diligence that will pay dividends in supporting your organizational business goals for many years to come.

Do you need help finding the right RMC for you?

Paragon Relocation has managed and responded to thousands of Employee Relocation RFPs. We would love the opportunity to help support your Relocation RFP process. We can provide helpful Relocation RFP Guides , Free Relocation RFP questions, and more.

Contact Paragon today to learn more!

What Elements Should Every US Domestic Employee Relocation Policy Include?

Employee Relocation Programs today are often seen as a balancing act between high employee satisfaction and cost containment. Why are these two elements connected? The reason is that organizations need to strike a competitive balance between both elements. Maintaining tight cost controls may be meaningless if you cannot recruit and retain critical staff members needed to make your organization successful.

What are the main types of Relocation Policies and Programs?

Generally speaking, there are three types of relocation policies used by companies to support relocation programs. Then within the relocation policy types, there are further divisions made employee level called policy tiers. You'll need to work within these guidelines if your company already has actually embraced one of these policies.

Lump Sum Relocation Program

What is a Lump Sum Relocation Program?

Lump sum policies typically are administered by giving the relocating employee a lump sum payment. Typically this would be one check to cover transferee moving expenses, consisting of all associated details. The transferee has the main burden to sell and buy a house, find temporary living accommodations, fund house searching trips, and handling all other elements of the move.

What are the pros and cons of a Lump Sum Relocation Program?

Pros:

• It is easy for HR/Payroll to administer
• Costs are generally fixed for the company
• It gives the employee the flexibility to make their own decisions

Cons :

• Requires employee to use their time to manage the move themselves
• The employee may not feel very supported by the organization
• Lump sum payments are considered fully taxable income to the employee
• Exceptions to the policy are common because the employee underestimates the costs of the move
• The employee has to ask the HR/Hiring manager for help figuring out relocating to a new city

Direct Reimbursement Relocation Program

What is a Direct Reimbursement Relocation Program?

With a Direct Reimbursement relocation program, the organization would repay the transferee for each move expense. This provides less cost control but results in better, more productive staff members. This policy does involve more administrative work for you or your third-party relocation company.

What are the pros and cons of a Direct Reimbursement Relocation Program?

Pros:

• It gives the employee the flexibility to make their own decisions
• Employee's relocation expenses are not necessarily limited by a set budget
• Direct reimbursements of homesale related expenses are not at risk of being audited by the IRS

Cons :

• Requires employee to use their time to manage the move themselves
• Direct reimbursements of expenses are taxed as income to the employee
• Exceptions to the policy are common because the employee underestimates the costs of the move
• The employee has to ask the HR/Hiring manager for help figuring out relocating to a new city
• Direct reimbursements of homesale related expenses are considered taxable income to the employee, making homesale assistances much more costly

Professionally Managed Relocation Program

What is a Professionally Managed Relocation Program?

Professionally managed relocation programs are managed by relocation experts that typically work for what is called a Relocation Management Company (RMC). Using an RMC is attractive to both relocating employees and their employers. If your business is dedicated to recruiting and retaining the best personnel, this is the best approach for you. Having a professional relocation company handle all information will keep your expenses controlled and your personnel from stressing-out.

What are the pros and cons of a Professionally Managed Relocation Program?

Pros:

• Relocation Management Companies are experts at moving employees
• Relocation Management Companies reduce company time spent managing employee moves
• Relocation Management Companies include at no additional cost policy and program design as part of a standard implementation
• Relocation Management Companies provide technology to both the employee and the employer to make managing key milestones and next steps easier
• Relocation Management Companies provide reporting, expense reimbursement, tax calculations, and more, reducing spend and risk

Cons :

• Selecting the right Relocation Management Company often requires a formal RFP process which can be time-consuming

How can I make a Relocation RFP Process Easier?

Check out our guide on Employee Relocation RFPs . Furthermore, we've managed and replied to thousands of Relocation RFPs. Feel free to reach out to us with any thoughts or questions about structuring your Relocation RFP. We would be happy to point you in the right direction.

What are the key elements needed to relocate an employee?

Key Elements of Domestic Relocation

Unlike international relocations, which include foreign currency and visa issues, domestic relocation crucial elements depend predominately on the following items.

Homesale Assistance

Whether you provide "loss on sale" monetary assistance or marketing services to encourage a prompt homesale, this is the key element of domestic relocation policies. You can cover the closing cost through a buyout, Buyer Value Option, or direct reimbursement program. Many organizations offer their senior executives a Guaranteed Buyout Offer, as well.

Full-service moving help, from packing to unpacking.

This aspect lowers the stress-level on you and your transferee. Quality full-service moving suppliers help ensure all of the family's household goods arrive safely in the new location.

Home Finding Assistance

This aspect features recommending real estate representatives with relocation experience to help transferees discover relevant housing in the new area. This includes company-funded trips, usually two, for the transferee and family.

Do you need help creating the right relocation program for your organization?

Paragon Relocation has been in business for over 30+ years, helping organizations of all shapes and sizes build competitive relocation programs that support their business goals. We would love the opportunity to explore doing the same for your organization.

Contact Paragon Relocation today to learn more!