“When the economic crisis occurred, HR and relocation departments both took a hit,” said Melissa Seitz Medford, consulting services manager for TRC Global, an employee relocation company in Philadelphia. That caused many companies to merge the two teams, or to eliminate relocation experts all together and move those tasks to HR. The challenge: “HR people are not mobility experts,” she said.
That’s putting additional pressure on relocation services companies to provide simple solutions that meet the needs of employees and companies, within increasingly tighter budgets.
“Cost has been at the forefront of relocation decisions for a long time now, and it will continue to be a challenge,” Cindy Madden, director of the Cartus Consulting Solutions practice in Danbury, Connecticut. Cartus’ 2017 industry survey found that relocation cost was the biggest challenge companies face, and cost concerns have increased steadily since 2009. At the same time, however, they are facing pressure to attract and retain top talent, who often see overseas assignments as a necessary tool for career development.
That’s driving employers and relocation companies to look for more flexible package options that cut cost from the process while still accommodating the needs of employees from multiple generations. “Having a standard three-tiered program is no longer the case,” Medford said.
While executives may still demand a robust relocation package with all the extras, millennials are often happy with minimal support to get them through the move. “Providing them with a full package many not be necessary, as long as they have what they need,” she said.
What that means, however will differ according to each employee’s marital status, home ownership, duration of the move and related dependencies. As a result, companies today are much more interested in lump sum contracts that allow employees to pick and choose how they want to apply their relocation resources.
But companies need to be careful about offering standard lump sum packages, Medford said. Employees need guidance on how best to use the funds, or they run the risk of burning through all their money and coming up short. That can leave both the employee and the employer in a difficult financial situation, she said.
Managed lump sum contracts are a better option, because they provide the employer with guidance on what a relocation process involves and what benefits they can take advantage of. “That’s how you get the most bang for your buck,” Medford said.
Companies are also increasingly adopting Core-flex plans, which offer “core” benefits like paying for movers and travel expenses with a variety of optional add-ons, like trips to look for a new home, or help with private schools. These core-flex models allow companies to achieve some level of consistency in their offerings, while still accommodating the flexible needs of employees at different points in their lives and careers, Medford said.
The Cartus report shows that only 9 percent of companies currently have core-flex policy structure, but the industry is seeing growing interest in this approach.
Companies are also more interested in data to track how well these relocation investments are paying off, and advances in analytics tools are helping them get those answers. Greater access to robust data is making it possible to link mobility to talent management and overall business strategy, Madden said.
Relocation companies are increasingly offering analytics and reporting tools to help companies to track their spending and benchmark their programs against competitors. “They want to see the business benefit on these investments,” Madden said.
Compiling and reporting on that data can be challenging, especially when companies use a patchwork of vendors in their relocation programs. Madden notes that most larger relocation companies partner with many movers, mortgage companies and other service providers, but if clients go outside those networks, the data may not be accessible.
“In those cases we need to let them know what data we can and can’t access,” she said.
As more millennials move into higher-levels roles — both as heads of mobility decision-making and as leaders who expect lucrative relocation benefits — these programs will continue to evolve.
“They are bringing new ideas, new policies and new technologies to the mobility industry,” Medford said. “Companies need to be open to the fact that the old ways of doing things may not be relevant for much longer.”
Sarah Fister Gale is a writer in Chicago. Comment below or email email@example.com.