I attended a most enlightening meeting of the Houston Relocation Professionals today. Joe Benevides, SVP for Paragon Global Resources and 2009 Chairman of the Board for Worldwide ERC, gave a great presentation on the state of the relocation industry. The key points of his presentation were:
- The state of Worldwide ERC and the direction of the Organization
- Update on the process and search for a new CEO
- 2010 Relocation Industry outlook
- Legislative updates
- Appraisal issues affecting the sales and values in relationship to relocation needs
Joe began his presentation by reminding the 100 or so people in attendance that when it comes to the Worldwide ERC, “You’ve got to be active. Organizations are only as strong as its members, and you have to get involved and volunteer.” He stressed that one of the best things about the relocation industry is the people you meet. I could not agree more! In the nearly 10 years that I have been involved in the industry, I have met some of the most incredible people, many of whom which have become very close person friends of mine.
State of the Relocation Industry…
According to Joe, one of the most important measurements in the industry is a look at where are we going. He referred to this as a “view from the dashboard.” He says that much like we glance at the dashboard of the car when we are driving in order to gather a quick bit of information, that it is important that we not take our eyes off of the road for too long, and that we must continue to look ahead in order to know where we are going.
What’s Happening at Worldwide ERC & Relocation Industry…
Joe said that the Worldwide ERC is currently focused on a number of issues, including:
- Search for a new CEO
- Coalition/Government Relations
- U.S. Outlook
- Appraisal Issues
- Global Outlook
- New Media Networking/Social Media
Current Environment – - Where are we Today?
According to Joe, we are working 50% harder for 25% less business. He said that as a result, both companies and employees are wary. He stressed the importance of maintaining a global footprint and seeking a sustainable uptick. He said, “The worst is over,” or at least we hope.”
Worldwide ERC’s Perspective…
- Re-engineer strategic plans
- Prioritize projects and programs
- Focus on customer needs
- Allocation of resources
- Scenario planning
Joe said that the overall strategy is to maintain a stable foundation for a brighter economy.
The Worldwide ERC’s Global Workforce Symposiumwill be held next week in Chicago. Joe said that ERC has taken a realistic approach to the conference and has budgeted for an anticipated significant drop in attendance as a result of the economy and the fact that many companies are cutting back on travel and conferences this year. As an organization, Joe says that ERC is looking to lay the foundation for future growth, and taking the opportunity to realign their strategy, which is the same thing that most companies are doing at this time. He said that basically, “we are preparing for the new normal.”
Search for a new CEO…
ERC has put together a CEO task force for putting a new CEO in place. Joe said that he anticipates that both the process and time lines for completing this will be communicated to ERC members this fall. He stressed that while a specific skill set is necessary in this position, that the most important thing they are looking for in a CEO is leadership.
Coalition/Government Relations…
There are also changes to the coalition. Joe explained that the coalition will is transitioning to an advisory council and will be renamed “Government Relations Council (GRC). The members of the GRC will be appointed by the Executive Committee.
U.S. Outlook…
Joe said that just under half of the companies that they surveyed have reported a drop in U.S. domestic transfer activity between 2008 and 2009. He said that companies that he works with have actually seen an increase, but most have reported a decrease. Furthermore, 51% of the companies surveyed currently have a hiring freeze in effect, while 41% are experiencing issues with regards to employee reluctance to relocate. This is greatly affecting the relocation industry, since new hires are a big part of employee mobility.
Joe also said that a lot of employees with BVO (Buyer Value Option) home sale programs have historically over-listed their homes because they are afraid of the big hit that they might take on their house. This fact greatly attributes to the reluctance of employees to relocate. While two thirds of the companies surveyed said that they still provide some form of home sale assistance program, even if it is direct reimbursement, there are still those companies that do not offer such a program. When this is the case, employee reluctance to relocate often comes into play.
Interestingly, in order to address the issues associated with the housing market, Joe reported that 70% of corporations have made changes to their relocation policies. This is often necessary if companies are to combat issues related to home sales and the drop experienced in the housing market. For relocation service providers, Joe said that these changes mean, (1) continued contraction in the industry, and (2) smarter use of resources and relationships.
Appraisal Issues…
This is the second time that I have addressed the appraisal issues and how they are affecting the relocation industry. According to Joe, one of the biggest issues with appraisals and HVCC (Home Valuation Code of Conduct), is geographic competence. He says, “Geographically convenient doesn’t mean qualified appraiser.”
With regards to the global workforce mobility, Joe said that it is important to ERC that they build their global brand, and expand their education and understanding of global issues. He said that it is all about the competency of the appraiser.
Global Outlook…
Joe urged the importance of continuing to invest in talent and staying competitive. He says the last thing that we need to do right now is to slow down our globalization activities.
Here are a few statistics that he provided:
- 50% of companies surveyed said that the economy affected the benefit levels they were offering to Expats going on global assignments
- 36% said that the upswing in the economy will bring back employee benefits, but the rest said “no, this is the new normal”
- 42% reported an increase in long term assignments to the Middle East
- Most companies expect a decrease in long term assignments, but expect an increase in short term assignments
- 72% expect repatriation to increase; the issue is in finding these employees work upon their return
- Fewer new hires to fill vacant positions today vs. 3 years ago
New Media Networking/Social Media…
Joe spoke about the importance of embracing the new media and social networking, but not to the exclusion of personal communication. He said that we should use the social media to, among other things, to nurture our personal brand and to increase our visibility. I couldn’t agree more! And with regards to ERC, there are so many ways to get involved and participate in interactive discussions and forums. This is one very important way in which you can demonstrate your expertise.
Outlook for the Future…
Joe said that we all need to be planning for the future. He said, “It is time to upgrade the talent on your team.” For any of you who have made sweeping departmental or company-wide changes, you now know that personnel changes are often a big part of the metamorphosis.
In general, CEO confidence is up and 46% of CEOs reported that they expect profits over the next 12 months. Additionally, the stock market is up. Joe closed by encouraging us to be ready for the recovery. He said we need to know what worked in the past, what didn’t and not to lose the lessons we’ve learned.
