The trend toward online bidding for relocation services is growing. It istouted "as a way to save money and probably works very effectively forpurchasing tangible components that can be defined precisely with engineeredspecifications," says Ellie Sullivan, vice president of consulting servicesfor Relocation Resources International in Boston. "But, unlike ‘widgets,’no two relocations are alike, and determining exact specifications is nearlyimpossible. The bottom line is that each bidder may bid on a different scope ofwork and ultimately the client’s real relocation costs could be much higherthan the online bid. Furthermore, after winning an online bid, contractual ‘fineprint’ may come back to haunt the client. These hidden costs and charges canadd up quickly."
"For real cost savings, the client must look at the real cost of relocation."
The purchasing department can provide meaningful project management, andonline bidding can be a consistent yardstick for measuring alternativesuppliers, Sullivan notes. But an online bid that provides poor service drivesup cost in the long run. "For real cost savings, the client must look at thereal cost of relocation," she says. "This includes the cost of lostproductivity due to extended relocation cycles, higher attrition and replacementcosts due to poor counseling, and lost opportunity costs from not filling jobopenings with ideal candidates. These expenses can far outweigh any perceivedcost savings if the scope and quality of service and counseling is inferior."
Online bidding and the RFP process are more likely to succeed in achievingthe overall objectives when they are combined with more traditional evaluationtechniques, she says. These include reference checking, site inspections, pilotprograms, and taking time to determine if there is a "cultural fit."
Workforce, November 2002, pp. 36 -- Subscribe Now!