Financial Times, March 4, 2006
Last summer I cleared my house out until all that was left were bare floorboards and dustballs and I moved, with my family, to California. I thought I had covered all the bases, as far as you can when you are starting a new life on the other side of the world. We found a family naive enough to want to rent our house and embark on the wretched experience that is school selection in inner London. The possessions that remained after the big cull – 109 boxes of books principally – left Tilbury Docks on a ship bound for the US. We found somewhere to live and a school for the children and, within a few weeks, had settled into the American way of life.
The important things went right. But, of course, there were hitches. No move is without them. The removal company held on to our possessions until we agreed to pay a substantial supplementary bill. They said we had underestimated the volume of the consignment. US Customs refused to release our container because the paperwork wasn’t in order. When the goods were eventually released, my computer’s hard drive had died. A small-print clause I had failed to spot in our insurance meant that we were not covered. With no financial rating in the US, I was denied a credit card, and my US bank froze my account several times, ominously citing anti-terrorism legislation. Oh, and my application for health insurance was turned down.
There were no such irritations for Ian McGeechan, who recently took up the post of director of rugby at UK Premiership champions London Wasps. This involved a move from Scotland, where he was director of rugby for the Scottish RFU, to somewhere within a commutable distance from London. McGeechan handed over the logistics of the move to the Relocation Bureau, a small UK-based company whose clients include Logitech, Amazon.com, Volvo and Cancer Research UK.
The timing of McGeechan’s move south was awkward in that it coincided with him having to be in New Zealand for the 2005 Lions Tour. “As I was 12,000 miles away from my wife, it was comforting for her to know that somebody was responsible for the move,” he says. “The Relocation Bureau co-ordinated everything. They scouted out areas for us to live and narrowed down a selection of houses. They got a good feel of what my wife wanted in a house and, once we had chosen one, they co-ordinated solicitors, builders and so on. They always kept us informed and dealt with all the details – even organising for a new fence to be built around the house before we moved in. I couldn’t have done any of that so it was good to feel the process was under control.”
McGeechan’s move was relatively straightforward, and domestic. But relocation companies really come into their own for globetrotters such as Nico Kelling, a senior manager at Infineon, the German semiconductor specialist. When Kelling moved from his home in Munich to Indiana for the company in 1998 he managed the relocation himself. “I spoke English and it was a short-term post so I just needed to find a furnished apartment to rent, which was easy,” he says. But in December 2005, when Infineon assigned Kelling to Tokyo, they offered him the services of a specialist, Going-There Destination Services. “They carried out a home search and handled all the red tape such as alien registration with local authorities and setting up a bank account. They organised an initial orientation tour of the city and helped with questions I had over a driver’s licence and phone service,” says Kelling.
“The biggest challenge in Tokyo is the language barrier, so it was time-saving to have help, particularly on the negotiations relating to my rental contract, which would have been more difficult to do alone.” He adds that he suspects having a Japanese-speaking expert on hand probably also widened his choice of places to live. “My options would have been limited to apartments with landlords who spoke English had I been looking on my own,” he says.
Linda Behnke, a partner at Golding Capital Partners, is a serial globetrotter. She relocated four times in 10 years for a previous employer, flitting between Munich, New York and San Francisco. Each move was managed by Mobility Services International, a company that claims to “demystify relocation”.
“They handled all aspects of the physical move,” she says. “I was very happy with them so used them every time.” Nevertheless she says each move was progressively more difficult. “This is partly because you amass more.” But the more angst-inducing aspects were out of her – and the relocators’ – control. “Every time we moved, the removal company underestimated the fee. I think it’s because they are aware that there are other [higher] bids and they figure they can’t lose as they will just change the price later,” she says.
Linda says each move has resulted in breakages, although they have all been covered by insurance. She also underwent the heart- stopping experience of $50,000 “going missing” as it was being transferred between her European and US bank accounts. Only dogged persistence on her part in getting the banks to tackle the problem – and the paper (and e-mail) trail she had kept of all her correspondence on the matter – resulted in her funds reappearing five weeks later. Her advice now: find a bank that is accustomed to dealing with ex-pats and clients on the move.
Having learned the hard way, Linda has two more tips for those relocating: “The move will always cost 20 per cent to 25 per cent more than you think it will and the consignment will always arrive later than promised,” she says.
These days, in a pressure-cooker global career market where a senior executive might be assigned a new post with as little as a week’s notice, corporations routinely offer the services of a relocation company along with the transfer orders. Big multinationals move between 1 per cent and 4 per cent of their employees around the world every year and turn to relocation specialists such as Cendant, Prudential, Sirva and Weichert to help them do it. Many of the these behemoths include removal companies and real-estate networks in their corporate portfolios.
The benefits offered in a relocation package differ from one company to the next, and are negotiable depending on the seniority of the employee, the degree to which the corporation wants to retain him or her, and the perceived “hardship” factor of the move. Along with the task of physically moving a household and its contents, services may include assistance with selling an existing home, identifying suitable neighbourhoods and schools, as well as financing a home purchase in the new location. Orientation services may include guidance on setting up bank accounts and getting connected with local ISPs, access to on-the-ground agents with local expertise, as well as “spouse support”, which might include information on local job resources or educational courses.
Companies engage relocators with one main objective: to move an employee swiftly and with the minimum amount of upheaval, so that they are at their desk and functional as soon as possible. “From a company viewpoint, the employee is at work working rather than house hunting, school hunting, or putting up pictures,” says Craig Vassie, a partner at The Relocation Bureau. Or, as John Arcario, executive vice-president at Cendant Mobility, puts it: “If somebody is moved without a relocation expert it’s the employer that suffers because you end up with a distracted employee and a potentially unsuccessful move.”
Chuck Stewart, client services director at Going-There, says cost- cutting has had an effect on the nature of the perks offered by corporate relocation. Increasingly, advantages such as the employer buying and selling-on a home, bridging loans and compensation for a spouse’s lost earnings are reserved for the “top brass”, he says. And some companies are choosing the self-help option. “There’s a trend for companies to give employees a lump sum and tell them to manage the move themselves,” he says.
There is no average cost for a relocation. Variables such as the value of an employee’s home and his or her seniority all play a part. The Relocation Bureau charges about £5,000 to relocate what it terms an “executive family”. At the other end of the scale Arcario estimates that the outlay for a multinational moving a senior executive with expensive housing requirements from New York to London would be well in excess of the value of his or her annual salary.
It is not just the corporate world that hires relocation companies. Two years ago the University of Southampton introduced relocation services as part of its staff recruitment policy. “We wanted to attract the best staff from wherever they were based geographically,” says Zelda Franklin-Hills, the university’s head of staff diversity. “It is stressful moving to a new job and it makes sense to offer support to ease those pressures so new staff can settle in and contribute to the university quickly.” Franklin- Hills has also observed how an offer of help with relocation can make the difference between a faculty member accepting a post at the university or elsewhere. “It can be the deciding factor between one job and another,” she says.
Although it is difficult to see how having expert guidance cannot be beneficial for people on the move, there are times when relocation companies can be more of a hindrance than a help. This proved the case for one family who moved within the US last year. The non-profit organisation for which the husband is a director selected a relocation agent, ostensibly to work on the family’s behalf. The agent was to sell the family’s existing home and help them find a new one in the city they were moving to, as well as manage the bridging loan provided by the husband’s employer and oversee the transportation of their goods. However, because the agent was overseeing the financial side of the move, which directly implicated the employer, the family didn’t feel their interests were being best served.
The relocator also appointed a real-estate agent based in a town 20 miles from where the family wanted to live. Feeling he lacked the local knowledge they needed, the family had to negotiate to select their own realtor. “There were times when we seriously thought about getting shot of the relocator,” says the mother of the family, who would rather not be identified, “even if that meant sacrificing the benefits that were being offered, such as the loan to buy a new home.”
In the end, though, a good experience with a relocation company can mean the difference between a successful move and one that flounders or fails. Had I been forewarned about consignment size, credit ratings and how to fill in a health insurance application, I may have avoided some of the headaches of my move.
The value of having someone on hand with local expertise is also repeatedly cited by relocation companies and those who have used them as being critical to a smooth transition. “You might be moving to the Bay Area in California, but do you know which neighbourhoods have the right schools for your children, employment possibilities for your spouse and like-minded communities to live in?” says Arcario at Cendant Mobility.
Meanwhile Vassie at The Relocation Bureau recalls a case of an American executive who was moving to the UK for her first overseas posting for a large multinational. “She was being helped by US ‘counsellors’ based in Connecticut,” he says. “As she needed to be within reach of Heathrow and a factory in Peterborough she was advised to live in King’s Cross.” It was a few years before the current regeneration scheme, and “it took us a while to persuade her that living next door to pimps and drug addicts wasn’t exactly a good idea.”
