How Are Companies Purchasing Moving and Relocation Services?

Creating a relocation policy and selecting the right provider for your company is no easy task. Whether you are new to the process or have some experience, information on what other companies are including in their policy and what they find most beneficial in mobility providers may simplify this task and save you time and effort.

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Have you been assigned to create a relocation policy and choose a provider – and aren’t sure where to start? Are you tempted to call your cousin’s husband’s best friend’s next-door neighbor who owns a few trucks and just hope for the best? Stop! Before you pick up the phone, it might be better to first get a few ideas from other HR managers who’ve been there.

How do mobility executives define their relocation needs? And how do they identify the best service provider to meet them? There are several important factors that go into selecting a corporate relocation provider. Read on to learn the best practices from companies in a variety of industries.

Where to Start

In this competitive corporate environment, success depends on several things: effective talent recruitment and retention, strong budget management, and partnerships with efficient service providers, such as relocation and full service moving companies.

A recent survey of Fortune 1000 companies, Corporate Mobility Today: How Companies Are Purchasing Moving and Relocation Services”, presents an insight into how Human Resource professionals, Procurement Managers, and Mobility Executives define their needs for relocation services and how they were able to identify those who would best meet them.

This survey indicated that more than half of those queried stated their budget for relocation is increasing. Of course, connected with the increase in budget is the need for additional moving and relocation services. This seems especially true for companies spending between $50,000 to $2 million to move 51-250 employees each year.

Most Important Needs – And It’s Not Cost

Researchers analyzed the survey respondents and found that the decision-making drivers for mobility services were linked to their department’s budget, resources, and time. Decision makers balance what money and time they have available with what services are necessary. Interestingly, choices by the respondents were not necessarily linked to their company’s budget, size, or even the number of relocations throughout the year.

In addition, researchers identified additional top requirements for moving and relocation providers. Some of the top needs were: understanding the company’s industry; a consultative approach to moving needs; capacity growth – in other words, the ability to meet the company’s moving needs year round; and proven national and international moving experience, including local and interstate solutions. Accurate and competitive pricing was 11th out of the top 15 responses, showing that, while price factors (not necessarily price itself) is important, the best moving and relocation service providers understand the company’s needs and deliver high quality service and innovative solutions in line with the company’s industry and culture.

When managers assess moving services, their primary concern is to find a locally owned company that is associated with an international or national van line. Why? Because such capabilities clearly demonstrate the provider’s ability to not only meet existing relocation needs, but also shows the ability of the provider to grow with the company’s needs, making them a potential good short and long-term relocation and moving partner. A resounding 84% cited that an affiliation with a national or international network as a primary reason to consider hiring a provider.

Who Makes the Decision?

The study shows that more than 66% of those making the choice of service providers work in Human Resources. The remainder is split between procurement (33%) and other departments (1%).

HR professionals are clearly the primary decision makers - concentrating on attaining positive outcomes such as employee recruitment and satisfaction. This accounts for the emphasis on mover’s capabilities to offer high levels of service to transferees. Conversely, procurement staff is more likely to be evaluated on cost and budget containment. Their focus is more on overall value, the bottom line and saving money.

Small to mid-sized companies can benefit from the experience of larger corporations that move employees more often. Understanding the value that large organizations place on total benefits can assist smaller companies in making better choices when sourcing a relocation service provider.

How Decisions Are Made

In choosing a relocation provider, it is just as important to understand how the decision is made, as it is to know who is making it. More than 96% of all firms reported spending one to six months deciding which moving and/or relocation company to select as their service provider.

During those months, the decision makers used four sources to gather the necessary information to influence their choices. Two of the sources were the relocation service provider’s own sales materials and website. The other two were recommendations from colleagues and interaction with the vendor’s employees, such as sales representatives or account managers.

These findings show how important it is to take the time to make careful considerations and use various sources of information. So, talk to other HR Managers from similarly sized companies and industries, ask your co-workers what their experiences were, go online and look at websites related to the industry and for individual potential service providers, call a relocation representative, and most importantly, ask lots of questions. This will lead to a better solution for your company in the long run.

Obviously, there are many dynamics in choosing the appropriate moving service provider. A number of departments may be involved in the selection: Human Resources, Legal, Finance, and Procurement. During the selection process, it can be tempting to simply choose whoever offers the lowest price and has a catchy name. However, best practices from larger businesses show the importance of taking your time and doing your research first.

Armed with a better understanding of the process of choosing a moving service provider, HR managers and Procurement staff will be able to make more effective relocation and moving choices for their companies in the end. And that looks good for everyone.

For more information and to read the complete survey and report, please click here.

Interested in having northAmerican® Moving Services help you with your corporate relocation policy?  Click here to connect with an experienced mobility expert today!

 

 




Categories: Corporate