Category Management Strategies for Relocation Services

The supply management landscape and opportunity for relocation services is changing dramatically. But these shifts have also come with increased questions from both HR and procurement. For example, we all want to strike the correct balance between getting employee mobility services (also known as relocation services) suppliers motivated to provide the most competitive pricing as well as to offer strict and productive service level agreements. But this is easier said than done, especially on an ongoing, sustainable basis while keeping internal employee satisfaction high across a high-stress period in their professional (and personal) lives.

One method you can use focuses on demand aggregation. Aggregation, while a new tool for global mobility services, can actually be quite effective in this regard. As we've discussed in previous papers in this series, it optimizes overall pricing while placing you in the hands of a subject matter expert who has negotiated the best terms and conditions for your company. For mobility services specifically, we only know of a few groups that have created successful aggregation contracts. But we also happen to know the engine behind them, featured in the Spend Matters Perspective Relocation Services or Mobility Services: What's in a Name?:

"The relocation industry as a whole is highly competitive with pricing, technology, and the range of services being offered. For instance, 5-7 new services have been developed over the past 5 years due to the emergence of employees becoming more global?and mobile. For years we've seen the benefit of aggregation in indirect spend for traditional procurement programs. Now we are witnessing aggregation's power in areas typically owned by HR departments. Aggregation in global mobility is the prime example of the power this model generates. An aggregator's ability to negotiate best in class pricing and service level agreements is unrivaled.

As an example, a Fortune 100 company ... had actually done a great job of negotiating a good program on their own. But if you take a couple dozen Fortune 100 companies together and aggregate their spend, you're talking a whole new ballgame. You can tailor the program. The difference is substantial in putting together a much broader program and offering with significant savings for all. Also, from a supplier standpoint, depending on the strength of the aggregated group, it's like found business. The companies in the group are all on the same page, so there's no need to go out and test the market or do the RFP. The cost of sale to the supplier is thus negligible. It's a win-win on both sides."

We invite readers to download the full paper linked above to explore the topic further. Our analysis includes a supplier shortlist and explores the top spend areas to address within the category.

- Jason Busch

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