How to Rank the Performance of Your Relocation Management Company

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Nora Palmer
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1 How to Rank the Performance of Your Relocation Management Company

How to Rank the Performance of Your Relocation Management Company Introduction... 2 Part I S.M.A.R.T. Goals... 3 Part II Key Performance Indicators... 4 Part III Service Level Agreements.

2 How to Rank the Performance of Your Relocation Management Company Introduction... 2 Part I S.M.A.R.T. Goals... 3 Part II Key Performance Indicators... 4 Part III Service Level Agreements... 5 Conclusion... 7 Appendix 1 Sample Relocation Customer Satisfaction Survey... 8 Appendix 2 - Sample Performance Measurement Matrix.. 13 How to Rank the Performance 2013 CapRelo. All Rights Reserved 1 P a g e

3 Introduction The quote, You can t manage what you can t measure is sage advice for today s corporate relocation managers and Human Resource professionals charged with overseeing the performance of relocation management companies. And with the 2013 EMEA Global Benchmarking Results reporting that 90% of today s corporations face talent shortages in critical roles, the vast majority of relocation managers will be busier than ever for the foreseeable future. 1 During a time of increased stress for transferring employees and complex cost management for your company, a performance measurement matrix that employs S.M.A.R.T. goals is an essential tool to assess whether a relocation management company is satisfying your employees needs while simultaneously meeting your strategic business goals. Recent relocation statistics 2 illustrate what s at stake for you and your corporation: 184,433 annual total number of domestic corporate relocations $9.3 billion annual amount spent on corporate relocations in the U.S. $16, 229,125 annual average a company spends relocating its employees. $97,166 average cost of transferring a current homeowner employee. $72,672 average cost of transferring a newly hired homeowner. $12,652 average cost of the domestic shipping of one household s goods. And according to the same U.S. Domestic Transfers: Relocation Statistics, the practice of outsourcing relocation services is reported as an obvious and popular choice. Nearly six out of 10 responding organizations fully outsource the mobility function and another 30 percent outsource selected aspects. Only 11 percent indicated that no aspects of the mobility function were outsourced (Worldwide ERC, 2012). 1 Mobility Magazine June 2013, p Statistics drawn from Worldwide ERC member companies as published in 2012 based upon 2011 collected data. How to Rank the Performance 2013 CapRelo. All Rights Reserved 2 P a g e

4 Part I S.M.A.R.T. Goals At first glance, managing a service provider like a relocation management company might appear to be a straightforward task. However, with the need for regular feedback from transferring employees and reliable reporting from the relocation company, S.M.A.R.T. goals are a required basis for responsible and perceptive measurement of any relocation company s performance. The S.M.A.R.T. acronym (Specific, Measurable, Achievable, Realistic, Timely) is widely accepted for meaningful business goals. Its letters stand for: Specific Sharply focused and defined goals are a necessity. A general statement like, We want more from our relocation management company, is of little use. A more specific goal is, We want a 10% increase in our transferring employee s satisfaction with our relocation service provider. Measurable Nobody buys tickets for a sporting event and then doesn t pay attention to the score. Without the ability to measure results, a goal becomes just a vague utterance, which has no place in the day-to-day world of business. Using the example goal of increasing transferring employee satisfaction, tracking the employee s experience is necessary. When service level tracking is performed regularly and responsibly, establishing a measurable goal is easy. Achievable It s logical to state an objective like, We want to increase transferring employee satisfaction, yet it is illogical to not have an established route by which employees can express their satisfaction. The lesson here is to be sure an objective can be achieved by measurable methods set in place before a goal is formally stated. For example, in order to increase employee satisfaction, establish a clear protocol for obtaining feedback from the employee. Realistic Even if a company s goal is to obtain 100% employee satisfaction, it s essential to realize that a goal like that is likely unrealistic. People are unique, and just like their homes and furnishing, issues arise. Set realistic goals to increase satisfaction, but leave room to allow for a reasonable margin of error. Timely Of all the elements of good business goals, timeliness is a key to future achievement. In the example mentioned above, the goal of increasing satisfaction has no timeframe for completion. In other words, no clock is ticking. Setting an otherwise attainable business goal with too short or too long of a deadline is an invitation for failure and can impact cost, quality and effectiveness. Putting it all together, a S.M.A.R.T. goal for increasing transferring employees satisfaction can be stated as follows: How to Rank the Performance 2013 CapRelo. All Rights Reserved 3 P a g e

Within six months, our relocation management company will achieve a 10% increase in transferring employee service satisfaction as measured by an employee satisfaction survey.

5 Within six months, our relocation management company will achieve a 10% increase in transferring employee service satisfaction as measured by an employee satisfaction survey. In her article How to Excel at Managing Service Providers, Rita Wagner aptly sums up the appropriate mindset for setting S.M.A.R.T. goals associated with measuring relocation management companies performance: Attempting to see through another s eyes can be a humbling experience, and allows one to better understand perspectives other than his or her own understanding the service providers perspective seeing through another s eyes may help to better assess and drive performance. 3 Part II Key Performance Indicators According to the Worldwide ERC s Process Flow for Procuring and Maintaining Mobility Services, Key Performance Indicators (KPIs) are defined as both financial and non-financial metrics used to establish the attainment, success or value of a service, product or organization. 4 As a starting point, KPIs can be viewed as specifically designed measurements employed to assess relocation companies performance. Without their specific elements negotiated, there is no meaningful assessment of performance. Although KPIs vary from company to company, the following four sample KPI categories are a good starting point to better understand the usefulness of KPIs and how any company can customize its own set to meet its business goals and compliance requirements. Sample KPI Categories: Employee Satisfaction For many relocation managers, employee satisfaction is a key performance indicator because a well-adjusted worker is productive and positively engaged. In the Worldwide ERC report Support and Retention Strategies for Cross-Border Assignments, communication with and support for transferring employees and their families are noted as important factors that begin with the relocation management company s performance of its duties. And in Human Resource Outsourcing Today, the method used to rank the top relocation providers is described as, Ranking the providers is usually pretty contentious, so the rankings are based on customer survey feedback data. 5 Client Satisfaction Here the term client refers to the buyer of the relocation management company s services. Since relocation/hr managers are responsible for the performance of thirdparty relocation management companies, an agreed upon method of collecting and assessing key performance indicators must exist. For many relocation managers, this takes the form of a 3 Mobility Magazine October Process Flow for Procuring and Maintaining Mobility Services. Worldwide ERC, 2006, p HRO Today Vol. 7 No. 4, May How to Rank the Performance 2013 CapRelo. All Rights Reserved 4 P a g e

6 mobility management report. A mobility management report can provide details such as invoice aging, purchase order status, relocation file status, relocation spend (both individual and business unit), and relocation spend vs. relocation budget. Cost Management In two recent 2013 Corporate Benchmarking Surveys, conducted in London and in Shanghai, the overwhelming reason for transferring employees was to control costs (Worldwide ERC, 2013). This means that despite the costs involved in moving employees either domestically or internationally, relocation managers must use KPIs that report on the financial performance of their relocation providers to maintain cost effectiveness. Both finance management and payroll management reports are typical measurement tools employed by many relocation managers. Compliance Steady feedback about and from the relocation company is a must for any relocation/hr manager. Ensuring that a relocation provider is compliant with all client relocation policies is another KPI that should never be overlooked. With regular system reports, oversight can be instituted to confirm that all expense payments and invoice adjustments have occurred within the designated time period and according to the agreed upon method of business. These four sample KPIs are only some of the suggested measurement tools. The parameters of each are agreed upon between the company and their relocation service provider and are allotted a time frame and weighting according to negotiated Service Level Agreements defined and discussed in Part III. In addition, a sample Relocation Customer Satisfaction Survey can be found in Appendix 1. A relocation management company s customer satisfaction survey should contain questions that provide performance indicators on availability and knowledge of the relocation counselor, as well as for services such as home marketing home sale, destination, household goods move management, and temporary living assistance, and mortgage services. KPIs without appropriate analysis and action are nothing more than raw data. The timing and route by which KPIs are reported are essential to their meaningful contribution to performance assessment. By using technology and clear lines of communication, relocation managers are far more likely to be perceptive and respond accordingly to both their companies needs and the performance of their relocation providers. Part III Service Level Agreements Service Level Agreements (SLAs) are defined as "performance standards that are agreed upon by both the service provider and client, and, by means of contractual points, often include the payment of bonuses or levying of penalties in direct relation to the level of service provided. 6 It s helpful to think of SLAs as negotiated benchmarks by which the results of KPIs can be used to achieve a pre-determined level of service. By employing S.M.A.R.T. SLAs in 6 Process Flow for Procuring and Maintaining Mobility Services. Worldwide ERC, 2006, p.29. How to Rank the Performance 2013 CapRelo. All Rights Reserved 5 P a g e

7 conjunction with KPIs, a service provider s performance is not only measured; the client s business goals are also more likely to be met. To enact useful and productive service agreements, clearly communicate to the relocation provider the time frame and weight assigned to each category of SLA. Referring again to How to Excel at Managing Service Providers, Wagner sums up the role of the relocation manager well when she writes, Defining service elements and agreeing on service levels provides a framework for the relationship. KPIs are necessary, but should be relevant and defined by working together to agree on points of analysis. This can be achieved without overcomplicating the feedback process. 7 With Wagner s words in mind and for simplicity, we ll return to the four sample KPI s offered in Part II in order to suggest SLAs that would form a performance measurement matrix. 8 Sample SLA Categories: Employee Satisfaction Upon receipt and scoring of relocation customer satisfaction surveys with 0 being the lowest score and 4.0 being the highest score 9, a reasonable customer satisfaction SLA would be to maintain a median score of 3.0 or higher within a time frame agreed upon between the client and provider. In addition, a customer complaint log is an invitation to set another worthwhile SLA that protects customer satisfaction. Again, with agreement from the service provider, it is reasonable to set a quarterly goal that 95% of relocations will be satisfied with their service. Client Satisfaction Many relocation managers know that regular reporting from outsourced service providers is a must for client satisfaction. With this in mind, set a SLA for 100% timely and accurate reporting. Cost Management When managing a relocation program budget, setting a SLA for actual costs not exceeding a certain percentage of the estimated costs is realistic. For example, when shipping household goods, actual expenses could be required to be no more than 10% above the estimated expense. Compliance The process of keeping a relocation provider to its agreed terms of service invites SLAs. With regard to payment of expenses, a realistic agreement is to expect 98% of valid expenses that comply with the client s relocation policies will be paid to employees bank accounts within one week of filing them. Another S.M.A.R.T. invoicing SLA is to expect that 92% of monthly invoices (11 out of 12) do not require duplicate billing or adjustments due to inaccuracies in stated information or filing. 7 Mobility Magazine October See Appendix 2. 9 See Appendix 1. How to Rank the Performance 2013 CapRelo. All Rights Reserved 6 P a g e

8 Negotiated SLAs in conjunction with clear KPIs can yield meaningful performance information. But, none of this information reviews itself. The availability of timely and reliable performance information enables discussions between client and service provider, benefitting all parties involved. As Wagner states, Working with a service provider to establish reporting criteria undoubtedly will result in better service provision all around. 10 Conclusion Cost and increasing numbers of moves are two important factors affecting relocation managers and service providers, yet these factors are at odds with each other. The first factor, the volume of relocations, is expected to continue to increase. Even with international markets in constant flux it s still no surprise that the 2013 Worldwide ERC Global Outlook Meeting reported that 54% of companies expect to see an increase in global long-term assignments in In direct contrast to the increase in volume of transferred employees is the second factor: the need for reducing relocation costs dictated by stricter budgeting. According to the New Normal in Corporate Relocation: Doing More Volume with Less Budget, Before 2009, relocation budget increases outpaced relocation volumes was the turning point, when volumes and budgets increased at the same pace. Beginning in 2010, we ve witnessed three years where the reverse is true is anticipated to follow the same trend. 12 Put these two opposing trends together and a challenging business model comes into focus. Relocation managers must keep a sharp eye on the performance of the relocation management services. From employee satisfaction effecting worker productivity to cost management for corporate financial well-being, the ability to accurately assess and rank the performance of relocation service providers will become a more integral responsibility of relocation/hr managers. By employing well-constructed KPIs in combination with benchmarking SLAs designed with built-in business consequences, relocation managers are better equipped to aggressively compete and thrive in the new normal of corporate relocation, which is poised to demand greater results from decreasing budgets. 10 Mobility Magazine October Global Outlook Meeting. Worldwide ERC : Shanghai March Atlas World Group s 46 th Annual Survey of Corporate Relocation Policies How to Rank the Performance 2013 CapRelo. All Rights Reserved 7 P a g e

9 Appendix 1 Sample Relocation Customer Satisfaction Survey SECTION 1: HOME MARKETING ASSISTANCE (MA) 1. Please rate the relocation management company s assistance with implementing the real estate agent s marketing strategy. Excellent (4 pts) Good (3pts) Satisfactory (2pts) Poor (1 pt) 2. Overall comments or suggestions (Verbatim) SECTION 2: REAL ESTATE LISTING AGENT 1. Please rate your listing agent s knowledge and professionalism? 2. Did the listing agent provide a written marketing plan? Yes (4 pts) No (1 pt) 3. Please rate your overall satisfaction with the marketing of your home. 4. Overall comments or suggestions (Verbatim) SECTION 3: GUARANTEED HOME SALE PROGRAM 1. Please rate your satisfaction with the appraisal process. 2. Please rate the relocation management company s assistance with negotiation of an outside offer. 3. My equity was processed in a timely manner. 4. Overall comments or suggestions (Verbatim) SECTION 4: BUYER VALUE OPTION (BVO) HOMESALE PROGRAM 1. Please rate the relocation management company s assistance with negotiation of an outside offer. 2. My equity was processed in a timely manner. 3. Overall comments or suggestions (Verbatim) SECTION 5: DESTINATION ASSISTANCE 1. Please rate your real estate agent s knowledge and professionalism. 2. Did the real estate agent provide you with an area orientation? Yes (4 pts) No (1 pt) 3. Please rate your overall satisfaction with your home finding experience. 4. Overall Comments or suggestions. (Verbatim) How to Rank the Performance 2013 CapRelo. All Rights Reserved 8 P a g e

10 SECTION 6: MORTGAGE SERVICES (MORTGAGE ASSISTANCE) 1. Please rate the relocation management company s referred mortgage company s timeliness of initial contact & follow up. 2. Did the mortgage company provide clear information about mortgage products? Yes (4 pts) No (1 pt) 3. Overall comments or suggestions (Verbatim) SECTION 7: RENTAL ASSISTANCE 1. Please rate the rental agency s knowledge and professionalism. 2. Overall comments or suggestions (Verbatim) SECTION 8: HOUSEHOLD GOODS (HHG) 1. Please rate the carrier s packers courteousness and professionalism. 2. Did you file or will you be filing a claim for loss or damage? Yes (4 pts) No (1 pt) if no; skip to question #4 3. Was your claim handled in a timely and satisfactory manner? Yes (4 pts) No (1 pt) 4. Please rate your overall satisfaction with the carrier. 5. Overall Comments or suggestions (Verbatim) SECTION 9: TEMPORARY LIVING ASSISTANCE (TL) 1. Was the location convenient and desirable? Yes (4 pts) No (1 pt) 2. Was the unit clean and furnished properly? Yes (4 pts) No (1 pt) 3. Please rate your overall satisfaction with your temporary living assistance. 4. Overall comments or suggestions (Verbatim) With the time and resources How to Rank the Performance 2013 CapRelo. All Rights Reserved 9 P a g e

11 Appendix 2 Sample Performance Measurement Matrix KPI Definition SLA Goal Measurement Tool/Frequency Weight Employee Satisfaction A customer satisfaction survey is issued to all relocating employees and the results are tabulated and interpreted for the client or greater ( scale) Satisfaction Survey Quarterly Reports 1-100% - As agreed upon Financial Performance Reporting Delivery of financial reports by the agreed upon dates, based upon information provided to the relocation management company by the company and/or relocation management company s employees. Types of Financial Reports: Invoice Aging Report - Monthly Purchase Order Status Report - Monthly Relocation File Status Report - Monthly Relocation Spend, Individual Monthly Relocation Spend, Business Unit Monthly Relocation Spend vs. Relocation Budget - Monthly 100% accurate and delivered on schedule Relocation management company platform Within seven working days after month-end 1-100% - As agreed upon Payroll Reporting Delivery of payroll reports by the agreed upon dates, based upon information provided to the relocation management company by the client and/or relocation management company s employees. Payroll Management Reports: 100% accurate and delivered on schedule Relocation management company platform Annual 1-100% - As agreed upon Annual Relocation Spend, Individual - How to Rank the Performance 2013 CapRelo. All Rights Reserved 10 P a g e

12 Annual Ongoing Employee Support Each relocating employee will be contacted during the length of their relocation at least once per quarter until the completion of their relocation or international assignments, when applicable. 100% of relocating employees contacted once per quarter Relocation management platform Quarterly Reports 1-100% - As agreed upon Transferee Expense Reimbursem ents Relocation management company reimburses appropriate expenses in compliance with the company s relocation policies. 98% of expenses paid to employee within 3 business days of receipt Relocation management company platform Quarterly Reports 1-100% - As agreed upon Invoicing Relocation management company submits an invoice to the company for all expenses incurred during the specified period within seven (7) days following the end of the month. 98% Invoice accuracy Relocation management company platform Monthly 1-100% - As agreed upon How to Rank the Performance 2013 CapRelo. All Rights Reserved 11 P a g e

13 List of Sources Baker s Dozen Relocation: Buyers Rank Top Relocation Providers. HRO Today, Vol. 7, No. 4, May Corporate Benchmarking Survey. London: Worldwide ERC, February Corporate Benchmarking Survey. Shanghai: Worldwide ERC, March Global Outlook Meeting. Shanghai: Worldwide ERC, March New Normal in Corporate Relocation: Doing More Volume With Less Budget. Atlas World Group s 46 th Annual Survey of Corporate Relocation Policies, Process Flow for Procuring & Maintaining Mobility Services. Worldwide ERC, Support and Retention Strategies for Cross-Border Assignments. Worldwide ERC, U.S. Domestic Transfers: Relocation Statistics. Published in 2012, based on 2011 data. The Numbers: 2013 EMEA Global Benchmarking Results. Mobility Magazine, June 2013, 44. Wagner, Rita. How to Excel at Managing Service Providers. Mobility Magazine, October Retrieved from archive, June 9, What Are KPIs and Why Do I need Them? Google Analytics Experts, July 27, < For More Information about how CapRelo can assist you with rental services, please visit our website at or call How to Rank the Performance 2013 CapRelo. All Rights Reserved 12 P a g e

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