The Relocation Industry was born in the United States, in the post world war two economic boom. As production shifted from military to civilian, and America’s vast industrial complex became dedicated to the manufacture of consumer goods, so the workforce became mobile for the first time. US production was and to a large extent still is, centred around the raw materials which provide both the power and the ingredients needed for mass manufacture. These raw materials are very often far away from the major financial centres and great cities of the US and therefore, the need to move a workforce became very important.
The first relocation services were primarily financial, designed to allow companies to purchase the existing homes of their employees in order for them to move quickly to their new location. As well as this, there was a need to assist employees and their families to settle quickly in the new location, and two services were born; home purchase assistance and destination services.
As these services were needed quickly, the specifics of the US need for domestic mobility meant that the real estate industry was perfectly placed to provide most of these services. Between the large national real estate broker chains and franchises, and the growing retail financial market, mortgage brokers and real estate companies quickly mereged their operations to provide services to companies who wanted to move their employees within the US.
To a great extent the US domestic mobility market is still serviced by the real estate companies, who offer nationwide brokerage chains which have the capacity to assist companies.
In Europe however, the market grew very differently and evolved into a distinct and separate industry.
The first major entry into the European corporate relocation market was made by a US financial services company in the 1970’s. A branch was opened in the UK offering home purchase assistance to companies wishing to move staff. The UK was seen as an appropriate first venture into Europe because of the very high proportion of home ownership in comparison to other European countries at this time. These services became known as “Guaranteed Price Schemes”. The company wishing to move a staff member, would contact the financial service supplier, who would undertake the property valuation, and then purchase the property directly from the employee at the market price. This meant the employee was able to move and the company did not have the financial burden of buying the house. Instead this burden fell to the Guaranteed Price Scheme supplier, for a fixed fee levied to the company. This system works well where the property market is dynamic, but when a market slows, the financial services companies may find themselves with a large portfolio and heavy re-mortgage payments to meet.
During the same decade, the UK property market also saw the first Private Acquisitions Specialists start trading, offering relocation and property search services to private clients. Many of these companies based in the capital, were also asked to provide similar services to corporate clients. At the same time, financial services suppliers, already versed in the provision of Guaranteed Price Schemes, began to offer the same clients destination services, that is a wider portfolio of services for the transferee, mainly centred around property search.
Dedicated destination service providers (DSP’s) began to appear, and would offer packages to provide on the ground settlement services for employees and their families. The first companies offering destination services were based in Brussels servicing the increasing needs of the new European Economic Community.
It soon became clear that not only governments were regularly moving large workforces around Europe, and in response to this growth in employee mobility, the first DSP’s began to operate in the financial and national capitols of Europe. Many of these companies grew out of the financial services sectors, but others were set up by people who had been moved internationally and who felt that settlement services would improve the lives of the families who were undergoing the relocation process.
During the 1980’s the new industry saw a steady growth, with very high levels of transferee support being offered by the DSP’s and generous relocation packages being funded by employers. It was not unusual for relocation companies to be held on a retainer for the full length of an employee assignment in order to provide on-going support.
At the same time, the first European relocation association, now the Association of Relocation Professionals (ARP) was formed to represent the interests of this new service sector.
The 1990’s saw a recession hit Europe, and with it a new focus for companies with globally mobile employee populations. Relocation packages offered to employees became far less generous, but were extended to more junior staff, as the economic benefits of having people moved quickly and therefore becoming immediately productive for the employer, became more important than ever. DSP’s may have been providing fewer services but they were offering them to a greater proportion of people.
At this time, Europe saw the first growth of the Relocation Management Companies (RMC’s), who brokered global contracts on behalf of companies and then distributed the work through local supply chains. These companies came about largely due to the new business focus on outsourcing.
As a result of these huge changes to the business models of the DSP’s the first pan European association was formed, EuRA, in 1998. EuRA now represents 265 companies in 35 countries across the world.
Today the industry includes a vast number of different business services, from DSP’s to serviced apartments and furniture rental suppliers, to immigration and cultural orientation specialists.
The purpose of relocation services to the company purchasing them is to settle the employee and the family with as little disruption as possible and therefore enable the employee to take up the new post quickly and productively. (See appendix one for a full description)
EuRA was formed in 1998 to represent the interests of the relocation industry in Europe and worldwide. All of EuRA’s activities are framed in an overall Policy Document.
EuRA members are split into three types, Associate, Affiliate and Full. For a description of these categories and the membership rules, see Chapter Three of the Policy Document.
Vision Statement
Mission Statements
Aims & Objectives
Firstly, the Rules of Conduct are signed by each member each year as they renew their membership. For a copy of the Rules of Conduct, see appendix one. Members in breach of these rules are then subject to the disciplinary procedures outlined in Chapter Four of the Policy Document.
EuRA is a founder member and participant in the European Academy of Relocation Professionals project to externally accredit European wide training programmes. The EARP is made up of Board representatives from EuRA, the Association of Relocation Professionals in the UK (ARP), the Association of Belgian Relocation Agents (ABRA) and the Syndicat National des Professionels de la Relocation et de la Mobilite in France (SNPRM). All training delivered by the four associations is accredited by the EARP Board member. EuRA delivers training based both on local needs and market conditions, as well as European wide topics delivered centrally. EuRA member companies have registered over 700 individuals to take part in the training programme, which delivers a three tier qualification programme; Certified European Relocation Professional levels 1, 2 and 3. Achievement of these qualifications is based on attendance at training. Reaching CERP 3 also involves the submission of 2,500 word case study which is independently graded by the Katholike Hogeschool University in Leuven, Belgium. Currently 10 people hold CERP3.
The next step for EuRA to promote quality standards, standardisation of services and best practice amongst it’s members, is through an accreditation programme.
DSP’s supply settlement services in the location where the employee will be living. DSP’s provide a vast range of services (see the following service delivery descriptions) either in-house or through their own network of approved experts.
The core services delivered by DSP’s are:
These four categories and their components will form the basis of any best practice audit, as these core services should be offered in-house by all DSP’s.
Subsidiary Services:
While many of these services appear as sub-components within the core service categories, and are offered widely by locally based DSP’s, they can also be outsourced by the client to specialist providers.
In the main, DSP’s are locally based, small companies, with between 2 and 25 employees, offering a range of services, based around the four core service categories.
RMC’s, also known as Global Management Companies, are large brokerages for corporate relocation services. RMC’s negotiate large multi-national contracts with companies who manage globally mobile staff in multiple locations. There are 13 major relocation management companies operating globally.
The primary advantage for he corporate client of an RMC, is the ability they have to work to pre-determined service level agreements with a single point of contact globally. The HR function is able to outsource the management of all global relocation issues.
RMC’s do not generally offer destination services through their own employees, but will work through a network of locally approved DSP’s. This process is known as “3rd Party Supply”. The process of becoming an approved DSP for an RMC is complex, involving in depth disclosure of service capabilities, plus of course, accurate and competitive pricing for service delivery. The service contracts given to DSP’s from RMC’s are time limited, and will be put out to competitive tender, at least every 12 months.
In areas where many DSP’s operate, competition to win 3rd Party Supply work is often fierce, and this has the effect of forcing down service fees.
RMC’s also have the same pressure to win global supply contracts. The procurement departments of the corporate clients of relocation providers, continually reduce fees in order to assess and maintain a contract with a relocation management company.
Some RMC’s do offer direct destination services, though this is usually as a result of the acquisition of a DSP company in a local market. These acquisitions are usually driven by the desire of the RMC to win lucrative local supply contracts directly given to the DSP by the local or regional HR.
RMC’s will also offer more services as part of their core operation:
PAS’s work for private clients, usually sourcing property to purchase on their behalf. This is a business model most widely seen in the UK and France, as a result of the high levels of home ownership.
Many DSP’s will also take on private work. The main difference is solely the fee structure, which for private purchase clients is based on a percentage of the price paid for the property, as opposed to a negotiated fee for the services delivered.
Clients of DSP’s
DSP’s will work for three types of client;
Ultimately the service provided by the DSP will be to the transferee and/or family, but the client will always be whoever pays the bill.
Single Transferee
Single transferees are those individuals moved with their job, who are generally under 30 years old, being moved on their own. Often these transferees will be in their first international assignment.
Transferring Couples
Partners in a mixed or same sex relationship, transferring together. Age range is broad, from partners on a first international assignment, to senior managers without children, or whose children are not transferring with them.
Families
Partners with children. The age range of the children is broad, from pre-school to university age. Families may also include transferees with extended families moving also. It is possible that the transferee and partner will relocate whilst the children remain in residential schooling in the home country. Homesearch in these cases will generally be as for the family moving together.
Dual Career Transferees
A transferring couple, where the assignment will depend on the transferring partner being able to continue in their career.
Commuting Transferee
A commuting assignment may be an option where the assignment is short, or where family or partner career issues make a weekly or monthly commute a more acceptable option. Corporate housing may be used in these cases for the duration of the assignment.
Short Term Transferee
Short term assignments are usually project based and are usually six months or less. The transferee may be allocated corporate housing and the partner may accompany for all or some of the duration of the assignment.