Weichert Relocation Resources Survey Gauges Real Estate Market's Impact on Workforce Mobility
June 11, 2008 // Franchising.com // MORRIS PLAINS, N.J. – Facing a softening real estate market, mounting competitive pressures and a tightening economy, today's corporate relocation managers are modifying their policies to better contain costs and keep employees mobile. To gauge the extent of these changes, Weichert Relocation Resources Inc. (WRRI), one of the world's leading relocation and assignment management companies, has released the results of its second annual survey of relocation policies and practices, Mobility and the Current Real Estate Market.
WRRI surveyed corporate relocation and HR professionals from 204 North American employers. Echoing the results of last year's survey, rising inventory costs was cited as the factor having the greatest impact on corporate relocation, followed by increases in requests for exceptions to policy and reluctance to relocate.
Survey results also indicate that companies hoping to ride out the market slowdown should rethink their devotion to the Buyer Value Option (BVO) program, a fixture of many corporate relocation policies. Seventy-eight percent of companies that offer a BVO reported experiencing an increase in days on market, the average being 130 days.
"Some companies are reluctant to embrace innovation, sticking with programs and formulas that originated and thrived under more vigorous markets because it's what their peers are doing," said Ellie Sullivan, Director of WRRI's Consulting Services group.
"While the BVO was certainly an effective tool in years past, under today's market conditions, it's giving rise to policy exceptions, extended temporary living and duplicate housing costs that could be avoided by looking beyond the status quo and seeking new and innovative alternatives."
Other noteworthy findings include:
- To fortify their employees' sales and marketing efforts, more companies are enforcing selection of pre-screened brokers (up to 65 percent in 2008 from 61 percent in 2007), minimum marketing periods (up to 85 percent from 70 percent) and list price guidelines (68 percent over 62 percent).
- The soft market is giving rise to duplicate housing costs, with 62 percent of companies covering payments for employees who fail to sell their departure area homes before moving into their destination area homes.
- The use of incentives to generate demand and stimulate sales is on the rise, to both brokers (28 percent in 2008 over 24 percent in 2007) and buyers (27 percent over 16 percent).
- Twenty-five percent of companies are seeking alternatives to the traditional appraisal process, eliminating costly appeals and matching employees with pre-selected appraisers.
"These survey findings are consistent with our recent consulting engagements which show that the single most important strategy for controlling overall relocation program costs is creating demand for employee homes," said Sullivan. "Companies that challenge conventional thinking and identify innovative ways to create this demand will ultimately enjoy lower costs and reduced inventories."
To receive a copy of the complete survey report, Mobility and the Current Real Estate Market, e-mail email@example.com.
About Weichert Relocation Resources:
Weichert Relocation Resources Inc. (WRRI) delivers innovative Next PracticesSM—the next generation of relocation and assignment management services—that help some of the world's leading companies avoid inventory, increase employee home sales, enhance mobile workforce management and reduce program costs. WRRI is recognized as the growth-oriented industry leader, providing a unique combination of stability, financial expertise and seasoned leadership that has made the company a trusted, proactive partner to clients throughout the world. A progressive, independent company, WRRI is committed to delivering Raving Fan® service; investing in new capabilities, technologies and talent; and bringing unmatched innovations to market, such as the industry's only complete, end-to-end global workforce mobility solution. For more information, visit wrri.com.