What's New?

Aug 01, 2006

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As every student of history knows, the city of brotherly love is famous for its role in the founding of the U.S. republic. It was also home to a great American thinker and doer, Benjamin Franklin. In 1727, Franklin formed an association dedicated to the self-improvement of its members. He called it "Junto," and it provided a weekly forum in which he and his friends shared their expertise for the betterment of one another-and the betterment of society. From this legendary association blossomed ideas for the first library, the first public hospital, volunteer fire departments, police departments, paved streets and the University of Pennsylvania.

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The Atlas Forum on Moving was born of a similar vision. In 1968, the leadership of Atlas Van Lines saw the need for a means to stimulate discussion on relocation issues. It proved to be an idea whose time had come. Today, the signature event of Atlas is known as a wellspring of information on vital topics. The dialogue spawned at this event helps shape the industry. Among the many industry accomplishments that are influenced by the Forum and the ensuing dialogue, are these Atlas "firsts."

  • The first major household goods carrier to implement real-time equipment tracking...
  • the first to bring customers the added safety and security of labor screening...
  • the first to earn eight consecutive Quest for Quality Awards for consistently outstanding ratings...

Yet, these industry firsts are not simply a credit to Atlas. They benefit the whole industry by helping to elevate service and inspire new efficiencies.

So, What's New?

Much has changed in the centuries since Franklin and his Junto were active. Science and technology have advanced greatly. The world population has increased approximately tenfold. And Philadelphia itself has grown from approximately 28,000 people in 1790 to more than 1.5 million today.

Likewise, one might contend that the relocation industry has undergone its own revolution since Atlas introduced the "Traffic Managers' Forum on Moving" in 1968. According to Atlas survey data from 1969, 83 percent of companies said traffic department personnel were responsible for contracting services of household goods carriers.

And change is perhaps best described by the people who live-and work-through it.

"The moving industry, in general, has gotten better at what it does," says Wayne Conway, Manager of Relocation Services with MITRE Corporation, a federally funded research and development company working in the public's best interest. Wayne bases his observation on a career that spans 35 years, including personal expatriate experience and 16 self-relocations.

"One of the biggest changes overall, people are actually starting to live up to their pledges," says Wayne. "Most companies today are better focused on customer service, especially on government or military moves."

Consequently, Wayne has recently found it advantageous to establish partnerships and work directly with household goods carriers.

"Over the last year and a half, since I brought the household goods portion in-house, I have had no service issues," says Wayne. "It also helps that transferees are more educated on relocation nowadays. Many have relocated before, and they are more savvy about the process. My complaint levels are way down."

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Complaints are down, too, as a result of contract language that rewards carriers for excellence.

"I use a performance-based contract so the discount depends on the service," says Wayne. "As a result, the best crews want to move my house. They know if they do a great job they'll be paid better."

Others, too, see performance measures and their economic advantages gaining in popularity.

"Relocation policy benefits are more sophisticated today, and there is an emphasis placed on value as well as cost," says Brenda Fender, a 25-year industry veteran and Director of Global Initiatives with the Employee Relocation Council (ERC).

"In the old days, providers were often retained by the HR professionals utilizing their services," says Brenda. "Now, a different set of techniques is often used for choosing and keeping service providers that involves modern procurement practices, including risk management and key performance measures built into the contracts."

Doing More For Less

"Today, relocation is much more cost-driven, and we must be keen on finding ways to do more for less," says Paul Onitsuka, Senior Manager of Global Mobility with Electronic Arts, a leading independent producer of interactive entertainment software.

Paul's 15-year tenure in the relocation industry has focused on strategic outsourcing to contain costs. During that time he h as noticed both the exodus of relo functions from- and the subsequent return of-key functions to the corporate purview.

"Key services are coming back in-house, and the outsourcing of components tends to be for the higher volume programs with relocation suppliers providing global capabilities," says Paul. "We give the new or transferring employee an overview of the benefits and then make a warm hand-off to the relo management company for day-to-day servicing of needs. The EA HR Global Mobility team manages any exception requests or service issues."

"Because budgets fluctuate, providing a lump sum for relocation benefits is useful for controlling costs and provides more flexibility to the relocatee," says Paul. "We give people relocation assistance based on business criticality and level. For the lower levels, lump sum moves are provided as a general framework, and they basically self-service their own move."

"The lump sum plan has allowed us to eliminate expense reports," says Sylkia Negron, an 11-year industry veteran who is Senior Relocation Coordinator with FMC Technologies, a global leader providing mission- critical technology solutions for the energy, food processing and air transportation industries. "It allows us to dedicate ourselves to counseling the employee and guiding them through the process."

Sylkia also sees communications advances as agents of change that enable her to do more for less.

"In my experience, technology has made things easier," says Sylkia. "I used to wait days for an appraisal to come through the mail. Now, with digital photography and e-mail, appraisals arrive the same day they are sent."

A proprietary online bidding system, Acadia, allows Sylkia and her team to compare and pick the most cost-efficient quote from among several van lines on an "apples-to-apples" basis.

"We consider both service and price," says Sylkia. "We want to save the company money, but not at the expense of service."

"Fee for Two"

A big component of many relocation packages is real estate services. With the escalation of housing prices over the last ten years, costs for such benefits have increased dramatically. However, a recent market development is providing some relief for corporations engaged in home purchase programs.

"The third-party vendors who collect real estate referral fees are now sharing the revenue with their clients," says Wayne. "The amount can be significant, say $5,000 for a typical home in some markets."

"Referral fees on real estate sales are becoming more common," says Sylkia. "We have a network of brokers we use exclusively-we know their credentials, we know how they work, and we don't have to reinvent the wheel with them. It's the same with financing. We have developed contracts with a network of specific lenders. They know exactly what our policy covers, which makes it easier for us."

With the burgeoning real estate industry have come new laws that can greatly impact some corporate relocation programs.

"One of the most significant changes in the last several years is how the home sale is handled," says Lynne Mills. Lynne, who has 18 years of industry experience and particular expertise in real estate, is Relocation Specialist in Global Staffing & Employee Mobility with The Boeing Company, the world's leading aerospace company and largest manufacturer of commercial jetliners and military aircraft.

"New IRS regulations enacted last year clear up a gray area on arms-length transactions," says Lynne. "This has affected how we take ownership and how the employee's income is affected. Granted, we're not tax advisors, but we do get involved in making employees aware of such issues."

Lynne says another change is the recognition that some families need to bring their children into the decision when selecting a house. This has caused a change in Boeing's policy.

"We now have a dependent allowance that pays for children on house-hunting trips," says Lynne.

The Atlas Forum on Moving, like Franklin's Junto, demonstrates the value of open discussion for the greater good. Were Franklin himself to appear at the Forum, he would find himself among people with whom he would enjoy contemplating big issues of the day. And, like Poor Richard himself, he would doubtless remind all assembled that "industry, perseverance, and frugality make fortune yield."

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