As a Human Resource (HR) manager or business owner, you know that managing an employee’s relocation in a cost-effective and compassionate way is essential for the success of your business as it can have a major impact on employee satisfaction, productivity, and overall business performance. In this article, I will explain the importance of utilizing a Relocation Management Company’s (RMC) broker network and how establishing network use as policy can help provide quality and consistency while improving risk management. I will focus on how HR can use this policy to control the cost structure of their mobility program.
The Role of the RMC in Managing Employee Transfers
The RMC and their real estate broker network play a critical role in your employee’s transfer. The RMC acts as the contact point for HR, making it easier to manage employee transfers. They take care of the details of the relocation including finding suitable housing, arranging for moving services, and coordinating all applicable benefits. They work with a network of real estate agents who specialize in relocation to help employees find suitable housing in their new location, as well as sell their current home.
The Benefits of Utilizing Relocation Agents
Your RMC has a network of trusted service providers, including vetted real estate agents, that they work with regularly and monitor for performance to provide consistent, high-quality service to their transferees. The more the network agents are utilized, the easier it becomes for the RMC to fine tune their process for identifying and utilizing stellar partners who can always be relied on to deliver quality results.
Many consumers believe that real estate agents are fairly similar and don’t differentiate between a regular agent and one that is relocation certified. A relocation agent can make all the difference for a successful transition. Relocation agents specialize in the unique challenges and requirements that come with relocation transactions. These dynamics include understanding tax-protected home sale programs that require expertise and knowledge to navigate. They understand the dynamics of increased cost through duplicate housing and the need to move quickly and effectively. By working with the RMC’s network of relocation agents, transferees will receive the highest level of expertise and support.
How RMCs Collect Referral Fees and Why it Matters to HR
It is a well-established industry practice for RMCs to collect referral fees from real estate agents who work with transferring employees on the sale or purchase of a home. Referral fees are the largest and most important source of revenue for an RMC. The ability to effectively collect referral fees has a direct impact on the pricing the RMC can offer HR for relocation services.
What are Non-Compliance Fees and Why Do They Matter?
When an RMC is unable to collect a referral fee on a real estate transaction, they may charge a non-compliance fee instead. Non-compliance fees can be costly and can add up quickly. If an RMC is not able to collect a referral fee or charge a non-compliance fee, the impact would be an increase in overall program management cost.
HR’s Role in Reducing Spend
Non-compliance fees and increased program cost can be avoided by requiring transferees to use agents in the RMC broker network. HR plays an essential role in facilitating the transfer process, providing guidance to both hiring managers and transferring employees on policy guidelines to prevent the situation in which the transferee contacts local agents to initiate the process before they obtain authorization from the RMC.
Policy Consistency for Risk Management
Requirements should be clearly outlined in the policy. Consistency in HR policies helps to reduce risk by providing a clear and transparent set of guidelines for all transferring employees. This reduces the potential for confusion and misunderstanding, which could lead to costly errors, conflicts, and disputes. Consistency helps to reduce the risk of litigation and other legal issues, since all transferring employees would be held to the same standards. Consistency ensures that all transferees have access to the same vendors and level of support, which helps to maintain fairness and equity. And finally, consistency helps to ensure that all transferees are aware of their rights and responsibilities, which helps to protect both the employer and the transferee. By requiring the usage of the RMCs broker network, HR managers can ensure that all transferees will receive the same high-quality real estate support, regardless of their location, benefits, or the complexity of their relocation.
Effective management of mobility policy and programs is critical to the success of your business operations. Non-compliance fees can be costly and can negatively impact your budget and cash flow. HR can ensure that relocations are managed efficiently and effectively, and costs are kept down, by requiring the usage of an agent in the RMCs broker network, and by educating both transferees and hiring managers on policy early in the process.
