Even before COVID-19 upended the business world, the relocation management industry was in a state of flux. In the last few years, we’ve seen steady consolidation among traditional relocation management companies (RMCs). Meanwhile, at UrbanBound—the first tech-based relocation provider—we continue to grow. Why is that?
First, consider the backdrop: traditional relocation management companies operate on low margins, so they’re more vulnerable to financial pressures. Given the fact that some domestic relocations and all global ones were halted due to shutdowns and border closings, the relocation industry is feeling pain. We saw industry mergers, acquisitions and layoffs before COVID-19…now, these are bound to accelerate.
For employers that plan to continue using employee relocations in conjunction with their talent acquisition strategy, this is something to be aware of. Many of our customers have advised us that relocation will remain essential to their growth plan—and that they rely on a strong, stable relocation partner to support their efforts going forward.
With that in mind, consider these five reasons that UrbanBound continues to be successful, even now, while legacy RMCs will continue to struggle.
…not legacy systems and manual processes! While traditional RMCs are primarily powered by people—people who labor over outdated software and cumbersome administrative processes, that is—our relocation management technology (the first of its kind) was built from the ground up, with the express goal of easing relocation for both employers and employees.
Because we’re tech-based, our overhead, including labor costs, is significantly lower. (At UrbanBound, we haven’t laid-off or furloughed a single employee due to COVID-19, nor do we intend to. In fact, we’ve been hiring and adding new customers to the UB family!) So, not only are we operating from a stronger financial position, we offer employers freedom from the time-consuming layers of manual administration required by traditional relocation programs.
Managed-budget policies combine the freedom of lump sum policies (see below) with the service levels of fully-supported relocations. We believe more and more employers will be turning to them to recession-proof their relocation management programs—which is why we developed Freeway, revolutionary software designed for optimizing managed-budget policies.
Managed budget policies are like lump sum programs in that they offer employers the ability to fix and predict costs and budget with accuracy. However, unlike lump sum policies, managed-budget policies offer employers opportunities for cost saving, because unspent funds are returned to them, not kept by employees.
In addition, Freeway offers the following advantages:
Employees use UrbanBound’s software to manage their budget however suits them best, with the help and guidance of their personal consultant, who they can rely on as much or as little as they choose.
Employees can choose to have most expenses directly billed to best-in-class suppliers—as opposed to reimbursement, so employees don’t need to front expenses. (Reimbursement, when warranted, can also be claimed online).
Employees can search for, book and communicate with vetted suppliers directly through the software.
To prevent overspending, notifications are triggered when costs near the budget maximum, so employees always know what they have to work with.
Can traditional RMCs offer managed budget policies? Not one where the policy acts as the rules engine for the entire employee experience!
Lump sum policies—a flat dollar amount of money given to employees to use for relocation expenses—have been growing in popularity for nearly two decades. Designed as a way to help employers reduce expenses, they offer tremendous flexibility to employees, who can spend the funds however they see fit…and keep whatever is left over. Usually modest in size, they’re ideal for interns and entry-level new hires.
Here’s the problem with most lump sum policies: they’re generally unsupported or poorly supported by traditional RMCs, who prioritize more profitable, executive-level relocations. As a result, relocating employees must organize their entire moves on their own. This can result in bad decisions, headaches, and unforeseen out-of-pocket expenses…i.e., a terrible relocation experience and a bad impression of the organization.