Switching Relocation Providers  Seven Steps to Survive the Transition                   Written by Paige Holden, CRP
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About XONEX Relocation Inc.                                            XONEX Relocation is a third party relocation servic...
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Switching Relocation Providers: Seven Steps for Surviving the Transition

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Economic fluctuations, turmoil abroad, cost-cutting efforts and a need for greater service, has led many of companies to seek out new relocation partnerships. But, deciding on a new partner is only half the battle. There are still many decisions to make, and processes to set in place, in order to implement a successful switch. Download for seven steps that you can take to ensure a smooth transition.

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Switching Relocation Providers: Seven Steps for Surviving the Transition

  1. 1. Switching Relocation Providers Seven Steps to Survive the Transition Written by Paige Holden, CRP
  2. 2. 2 SWITCHING RELOCATION PROVIDERS Introduction Earlier this year, we wrote a whitepaper on the common reasons why companies decide to evaluate their relocation programs – and their relocation partners. We were seeing a flurry of proposal activity from a variety of different sectors, which led us to believe that the companies, previously steadfast on service partnership, were now looking for a better option. Given economic fluctuations, turmoil abroad, cost-cutting efforts and a need for greater service, this was understandable. What started as a due diligence exercise, has led many of these companies to drawWhat started as a due anchor and change course.diligence exercise, has ledmany of these companies So, let’s say you’ve decided to change relocation providers and, after an extensive RFP process, you have selectedto draw anchor and your new partner. Saying congratulations at this point might be a bit premature. There are still so many decisionschange course. to make, and processes to set in place in order to make this move a success. With the right partner, however, the hardest part of the decision should be behind you. As an HR or relocation manager, you will need to take a leadership role. It’s your job to paint the picture for success and then carefully plot out the amount of time it’s going to take to get there. In fact, before you even start to execute the transition, you will need to define the timeline of the process. Depending on the time of the year, you may want to transition the first of the New Year, for reporting convenience and year-end tax reporting consistency. Depending on your working relationship with your current provider, you may want to begin using the new service partner immediately. The implementation process can drag out from one to three months, or even longer, depending on the scope of the program and number of areas needing to sign off on the process. So, your new provider must be flexible enough to work with your existing programs and processes in the near term. Setting realistic expectations and deadlines for each step, such as policy review, expense processing/auditing, reporting needs and file transitioning, will add order to the process and enable each team member to budget their efforts accordingly. As we describe below, everything with your new provider will be set up from scratch, so you will need to share information, review policies and determine reporting requirements right away. Always remember that this is to your benefit – seize this opportunity to customize your program and its delivery so that you get exactly what you need, when you need it.
  3. 3. 3 SWITCHING RELOCATION PROVIDERS Step 1. Identify the Transition Team Before you begin planning the transition, you must identify the internal parties that will influence and/or be impacted by the change. Specifically, you will need to establish the following: Gatekeepers: The gatekeepers are the people who are in charge of the relocation program. Typically, this is someone from the HR department that will be responsible for initiations, exceptions, program monitoring and reporting. Gatekeepers are critical to the transition process because they will be the main point of contact for the new relocation provider. They will also be impacted the most by any policy and/or protocol changes. Decision makers: Decision makers are the highest-ranking members of the team that have ultimate say in the relocation program. Sometimes, the gatekeeper is the decision maker. More often, however, there is a higher up (HR Director, CEO, CFO, etc.) who will want to be consulted about major exceptions, added expenses, policy changes and/or a shift in the overall relocation strategy. It’s important that the team knows who the decision makers are and how involved he or she wants to be in the process. IT: When you switch relocation providers, you are also switching technology platforms. You will need to appoint an internal IT staff member to liaise to ensure connectivity and data migration formatting. Payroll: Having the Payroll department on board is critical in ensuring transferring employees receive timelyA good partner will bring payments, as well as proper tax treatment. Communications and a regular reconciliation process often determineeveryone together and use the overall success and quality of experience for the transferee.the collective experience tomap out the right transition Accounts Payable: Relocation service providers are often lumped in with all other vendors and the inclinationplan that covers everything might be to pay invoices in the same intervals, such as “Net 30 Days.” However, unless the partner has agreedfrom policy review to to pay expenses and other vendors up front, this time lag can mean significant delays, creating obviousexpense and payroll complications. AP must work with the service provider to provide for those reimbursements and services whereprocedures. waiting for the regular vendor pay cycle will not work. As you put your team together, your relocation provider will also be working on their transition team. This will likely include a relocation services manager, IT liaison, expense analyst, client services representative and a member of senior management. A good partner will bring everyone together and use the collective experience to map out the right transition plan that covers everything from policy review to expense and payroll procedures. Once you have a plan and everyone understands their role in the transition, you can move on to implementation.
  4. 4. 4 SWITCHING RELOCATION PROVIDERS Step 2. Review Current Policies Once the transition team is assigned, it’s time to review current relocation policies. Not only will your new relocation partner bring a fresh set of eyes to your program, but having your internal team members present and focused will also help bring any concerns to light. Some questions to consider include: • Are you happy with your current policies?An in-depth policy • Are your policies meeting the needs of your current transferees?discussion will help yournew provider get a better • Do you think that the policies you have in place will meet the needs of your future transferees?feel for the program • Are your policies cost-effective?intent and culture ofyour company. • Are your policies competitive within your industry? • Do you currently grant a lot of exceptions? Why? • Are there industry trends emerging requiring consideration? • Is there a formal travel and expense policy that also governs relocation-relation travel? An in-depth policy discussion will help your new provider get a better feel for the program intent and culture of your company. Once the provider has a thorough understanding of each program, they will be able to add their own insight as to current industry best practice and offer solutions for areas where you might feel the current program falls short. At the end of the discussion an outline of the benefits can be drawn up and reviewed for agreement. Then, the policy drafting process can begin. As a brief aside, be sure to pay attention to the details. For example, ensure that the new relocation provider’s name is included throughout the policy and that all of the contact information is updated.
  5. 5. 5 SWITCHING RELOCATION PROVIDERS Step 3. Process Documentation and Review After discussing your policies with your new relocation provider, the next step is to go over the relocation management process. This should include a review of all current documents and letters that provide direction, as well as which processes, if any, will be changed, eliminated and/or transferred to the new provider. In order to determine what’s working and what isn’t, consider the following questions: • Who is responsible for initiations? • How are transferees currently initiated (web, email, phone, etc.)? • Do you have an initiation letter? If yes, who sends it to the transferee? • Who is responsible for explaining and/or providing a copy of the policy to the transferee? • Do you currently require a payback agreement? If so, who will handle its delivery? Who will collect the signed agreement? • Do you currently prepare an initial, estimated budget for each transferee? If yes, can they see it? • What is your exception approval process? • Is there a pre-approved threshold for exceptions?After discussing your Once the transition team knows what they want changed, the group can start to design future processespolicies with your new for initiations, document sharing, assignment letter management and cost projection development.relocation provider,the next step is to go In addition to process mapping, this is also a great time to establish roles and responsibilities movingover the relocation forward – essentially, who does what, where, when and how – so that both the client and the relocationmanagement process. partner understands what they are each accountable for. We find that this is also a good opportunity to discuss criteria for preferred service providers and any standards for service delivery that the provider should know in order to meet expectations. Savvy companies often take this time to run through “what if” scenarios such as exception requests, service delivery problems, emergency situations and disaster preparedness. Running through this exercise is a great benefit to the team because it will eliminate confusion in a stressful time. Everyone will know what to do, which will make finding a resolution much easier.
  6. 6. 6 SWITCHING RELOCATION PROVIDERS Step 4. Determine Expenses and Reporting Protocol By now, you know which relocation policies you will be using and how they will be administered. The next step is to discuss how you want to handle expenses and reporting with your new relocation partner. At this time, you should invite payroll, finance and accounts payable to discuss the current expense process and which functions will be transferred to your new provider, if any. During this meeting, you should host a very detailed review of reporting and billing requirements, billing labels and fields, payroll interface, timetables and other accountingPrior to implementation functions. You should also plan to loop in your tax and COLA providers in order to discuss allowance calculations,with the new relocation hypo tax estimates, delivery and reporting expenses and tax equalization payments, etc. Prior to implementationprovider, you should test all with the new relocation provider, you should test all systems, especially those that interface with payroll.systems, especially those Every company approaches expense management differently, so it’s important that you and your relocationthat interface with payroll. provider are on the same page. Here is a checklist of questions you should run through to ensure you hit all the important points: • Are all receipts required for expenses? • Can receipts be faxed, copied or sent digitally, or must they be originals? • Which day of the week do you like to receive invoices to ensure prompt payment? • Who should receive the invoices? • What is your typical processing time for each invoice? • Are there any special terms needed for invoices (i.e. net 30)? • Can invoices be emailed? • How often do you calculate gross ups on taxable expenses? • What gross up methodology do you use? Why? • Do you gross up for local taxes? • Do you pay any expenses directly? • If some expenses are paid directly, who issues the payments? • If you gross up via the marginal method for Federal taxes, who will provide filing status and number of exemptions? • What date do you want your relocation provider to cut-off for end of year expense processing? • Who should receive FICA requests? • How will you treat international transfers moving to U.S. payroll? These are just a few sample questions to facilitate a discussion – the areas that you and the team focus on will be determined by the kind of relocation program that you plan to administer. Ultimately, you want to define the protocol for dealing with expenses, assign the responsible parties and then let those people decide which reports are most important.
  7. 7. 7 SWITCHING RELOCATION PROVIDERS Step 5. Decide Which Transferees are Being Transitioned to the New Firm The relocation program did not grind to a halt because you decided to switch relocation providers. In fact, you may have transferees already in process. What will you do? Will you switch them over to the new service partner, or let them finish with the old provider? Whether or not you transition your transferees to the new relocation company will depend on two things: your reason for switching providers and where your transferees are in the relocation process. First, you need to decide if you are comfortable with having your old relocation provider finish relocations already in progress. If the reason for the switch is service related, then you may not be comfortable with having them finish. However, if they have provided you with adequate service and you trust their ability to finish the job, then it might be a good idea to have the old company close open files. This being said, it’s really important that you consider where your transferees are in the relocation process before making a decision. For the most part, if your transferees are far enough along to where moving household goods and closing on the new home is all that remains, it’s probably best to let them stay with the old provider. At this point, everything has been scheduled and is coming to a close and there is little reason to disrupt the process. Conversely, If your transferee still has a home to sell (either just listed or in inventory), it’s wise to transfer themFor the most part, if your over to the new relocation provider. First, they have not yet established close relationships with the formertransferees are far enough company so it will be easier for them to adjust to new contacts. Second, the former provider may not providealong to where moving the same level of assistance or attention to the transferee as they would if you were still a client. It’s not to sayhousehold goods and that any reputable provider would do so maliciously, it’s just the nature of business to apply more energy toclosing on the new home current clients.is all that remains, it’sprobably best to let them Another factor to consider is the level of employees you are relocating. For example, if you are moving higherstay with the old provider. level executives, you may not be comfortable disrupting their move. In this case, leaving them be may be the best course of action. That said, if you left your relocation company because of service issues, you may not want your C-suite executives exposed to possible problems. Finally, it’s always possible that your former relocation company will request that they be allowed to keep transferees that have already been initiated. They may even want to hang on to homes in inventory. But, the decision is ultimately yours. If you just want to sever the relationship, rest assured that the homes can be transitioned with a bit of paperwork.
  8. 8. 8 SWITCHING RELOCATION PROVIDERS Step 6. Supervise the Hand-off to the New Firm One of the most common concerns we hear when we are counseling new clients on transitioning revolves around whether or not the two relocation providers will cooperate to make the hand off as seamless as possible. Don’t worry. Firms will almost always be respectful of each other because neither company will want to disrupt the relationship with the client. Still, you will want to supervise the process – and some providers will only provide documentation directly to their client.Once you’ve determinedwhich transferees you want Once you’ve determined which transferees you want to transition and when, you’ll need to work with your newto transition and when, provider on a strategy. For example, if there is a large group of transferees being transitioned, it may be moreyou’ll need to work with advantageous to do so in waves, in order to give each transferee immediate and the proper attention. Additionally,your new provider on a if your service model involves a single point of coordination (as opposed to a call center approach), you wantstrategy. to make sure your dedicated counselor(s) have enough time to speak directly with each relocating family. We recently executed a very large transition where staggering the transition turned out to be very successful. Here’s how we did it: After deciding on the group to be transitioned, we prioritized each transferee based on needs and timing. We worked with our client to set up a reasonable schedule that would allow our Relocation Service Manager to reach out to each transferee. Then, the client let the transferees know about the switch and the date when things would start to change over. On the day that the transferees file was transitioned, our Relocation Service Manager sent them an email to let them know they had been moved over and to schedule a time to chat about where they were in the process and any outstanding issues. The Relocation Service Manager then compared the transferee feedback with what the former provider had documented in the file. Discrepancies were shared with our client for clarification. Transitioning files involves a little more scrambling by all parties as the move is a work in process, and the objective is to ensure the transferee does not become alarmed. So, while the new service provider should be able to start and finish new initiations with little interaction from the client gate keeper, in transition files, the work may be a bit more energy intensive.
  9. 9. 9 SWITCHING RELOCATION PROVIDERS Step 7. Set Up a Schedule for Check-in Meetings Finally, when all of the decisions have been made and your transition schedule is complete, all that’s left to do is schedule check-in meetings. We suggest a gradual shift where you might start with weekly calls, but then morph into monthly or quarterly calls as you grow more comfortable with the new provider and their technology systems. Ultimately, a successful transition depends on three things: organization, consistency and communication. YourUltimately, a successful entire team – from payroll to your relocation provider – should be as methodical and consistent as possibletransition depends on throughout the transition. As long as every step is documented, and every team member is on the same page,three things: organization, your transferees will not fall through the cracks or suffer from any confusion among the parties. Finally, perhapsconsistency and we are biased, but we also encourage our clients to listen to their new provider and let them weigh in on whatcommunication. works. While transitioning may be new to you, most relocation companies already know the drill and a true partner will walk you, and your transferees, through it step by step.
  10. 10. About XONEX Relocation Inc. XONEX Relocation is a third party relocation services company that offers the right solutions for corporate clients – solutions that meet the demands of relocating families in today’s hectic business climate. We help corporate America move their valuable talent with minimal interruption and maximum satisfaction for everyone involved in the relocation process. Our knowledgeable and caring staff combine cost transparency with creativity to structure benefit plans that are sensible and targeted to each client’s needs. Relocation at the speed of life.YO U R R E L O C AT I O N S O L U T I O N XONEX Relocation 20 E. Commons Blvd. New Castle, DE 19720 1.800.986.6846 www.xonex.com Copyright © 2012 XONEX Relocation, LLC | All rights reserved. 08/12

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