The Hot List 2013: Relocation Services Providers

By Max Mihelich

Jun. 27, 2013

The future looks promising for relocation services providers.

For the past year or so, a steadily improving economy and a rebounding housing market have turned employer uneasiness about relocating employees into cautious willingness to move personnel domestically. International transfers, though, appear to be increasing at a quicker pace.

“They’re up across the board. I’m talking about expatriate assignments, short-term assignments, commuters, permanent transfers. I’m talking about the broad spectrum of global mobility,” says Ed Hannibal, the leader of Mercer’s North American global mobility practice. “Although a domestic transfer maybe something that’s not really a possibility for someone in the U.S. right now, there’s a whole host of international, global relocations that are possible.”

According to a Mercer global mobility study, 71 percent of employers expect short-term international assignments to increase, and 57 percent expect long-term assignments to increase, as well.

“We definitely see a lot more interest in relocation,” says Sean Raney, vice president of international assignment compensation services for Cartus Corp., a global relocation services provider based in Danbury, Connecticut. “It’s funny—the clients are all talking to us about relocation, and they’re very optimistic about it. Employers are hesitant and cautious about moving workers, but definitely optimistic and a lot more into planning.”

Mike Canning, vice president at New Castle, Delaware-based Xonex Relocation,July 2013 Hot List Relocation reinforced Hannibal’s claim that domestic relocations are more risky than international relocations. However, he did indicate employers have started to have a more positive outlook when it comes to relocating their workers domestically.

“At each activity review, as part of the process and for future need assessment, we ask clients if they anticipate more or less volume. For the first time in three years, we are getting cautious optimism of continued growth,” Canning said in an email.

Debbie Balli, president of global relocation services at Westmont, Illinois-based Sirva Inc., suggests relocation companies can move past just being optimistic about the future of the industry and feel confident about it.

“We’ve definitely seen an increase in relocations,” Balli says.

Other relocation services companies providing information for the Workforce Hot List of Relocation Providers have experienced increases in relocations, as well. Graebel saw its employer-assisted moves jump from 35,000 to 45,000 over the past four quarters.

Similarly, AIReS expanded its client base by 40 companies this year, and performed 19,888 employer-assisted moves—an increase of 1,394 moves compared with May 2012. And while Impact Group has performed about 500 fewer employer-assisted moves compared with this time last year, the company’s full-service relocation client base grew from 40 percent to 60 percent over the past four quarters, according to data provided by the company.

Relocation experts expressed similar opinions about how the recovering housing market has had a positive effect on the relocation industry.

In the United States, 263 out of a total of 367 housing markets are considered “improving,” according to a recent report published by the National Association of Home Builders. The study shows that in June 2012 only 80 housing markets were identified as improving.

“Domestic-wise, the real estate market is definitely improving pretty well across the board,” Raney says. “There are certain locales where it’s definitely improving, and even the ones that aren’t doing as well still have stabilized the past few years, so that helps our clients quite a bit because that frees up their employees to entertain taking relocation packages and moving to a new job and a new location.”

When it comes to locations, companies are—not surprisingly—attracted to major business centers in the U.S., in both urban and suburban locations.

“Not to classify it one way or the other, I’ll just say, major business centers is where they’re going to. For example, in Dallas we see people going downtown or to Las Colinas, which is a Dallas suburb, but a huge business center,” Raney says.

In addition to Dallas, the strong presence of oil companies and Texas’ reputation as a business-friendly state makes the Houston area the top destination for relocating employees, experts say. Other top spots for relocation in the U.S., include New York and the California cities of Irvine, San Diego and San Jose, according to Cartus research.

Internationally, traditional destinations such as the United States, United Kingdom and Germany remain popular places for relocation. However, the increasing economic importance of China and Brazil are driving relocations to those countries, as companies are recognizing a “need to provide global leadership” at newly established foreign headquarters, Balli says.

Interestingly, South Africa has recently emerged as a popular place for expats to land for international assignments.

“We are seeing an increased interest in South Africa just because companies are trying to get into the African continent, and they look at South Africa as the safest to have a base of operations and say that they’re there,” Raney says.

So while the drastically improved real estate sector has brought an increase in business to the relocation industry, employers and their relocating workers have brought new demands for relocation providers to consider as they help with their moves across the country or to foreign ones.

“The biggest trend we are seeing is more customization and flexibility around individual transferee needs,” Canning wrote.

Traditionally, Canning explained, employers divided transferee groups in different kinds of groups, such as homeowner or renter and married or single. Then housing market pressures caused relocation programs to swell, “mostly due to expanded benefits that included loss on resale, extended temporary living and return trips.” Canning says this drove employers to cap relocation benefits in an effort to control costs, but capping benefits didn’t really work. And now things are beginning to be done differently.

“Now we are starting to see the pendulum swing in the other direction. Rather than lumping transferees into a group and giving them benefits and dollars allocated to that group, relocation managers are asking, ‘What needs to happen to make this move take place?’ ” Canning wrote.

Employers are starting to consider each relocating employee individually, developing a cost projection and setting that as the budget for the move, Canning said.

Hannibal adds that employers are approaching relocations on a case-by-case basis for international transfers, as well. “Companies are really looking at the relocation and mobility picture and saying, ‘What’s the business need? Let’s link that to the role and type of mobility solution that we need,’ ” he says.

One of the most interesting trends is Sirva’s smartphone/tablet relocation app, which offers customization of a relocation experience for the transferee. According to the app’s description, a transferee can check the “current status of [their] move; add crucial contacts directly to [their] mobile device … search for local amenities.” The app also has a journal feature that allows the user to chronicle their relocation experience.

Relocation experts suggested trends that customize relocation programs to fit individuals’ needs, instead of containing costs, are indications that the industry is in the beginning stages of a fruitful period. Experts offered optimism tempered by uncertainty. But mostly optimism.

“For now, the future looks positive,” Canning wrote.

Max Mihelich is a Workforce associate editor. Comment below or email Follow Mihelich on Twitter at @workforcemax.

Max Mihelich is a writer in the Chicago area.

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