Tips for ensuring a smooth RFP process and finding the right fit
If you’re actively going out to a Request for Proposal (RFP), it’s most likely because your company is ready to outsource relocation services, your needs no longer fit your current provider, or it’s time to benchmark services and costs against other market data.
In either scenario, the partners you invite to participate should be vetted and pre-qualified in advance to ensure that, at a minimum, they can meet all your contractual and service level agreement parameters.
Be aware that not all companies with the word “relocation” in its name is a full-service relocation management company. Many real estate firms, moving and storage companies, and even workplace services and commercial moving companies may use the word, “relocation,” but they are not equipped to manage the entire relocation/assignment management processes.
Starting with a Request for Information (RFI) or even a simple exploratory meeting can be effective to help you narrow the field for a Relocation Management Company (RMC) that fits your needs.
Deciding Which Companies to Invite
Your set of invited participants should also be able to demonstrate:
Proven track record providing the services you need, where you need them, at reasonable costs, and scalable to your mobility program needs
In assessing cultural fit, organizations will generally examine and score everything from the company’s fiscal stewardship and compliance certifications, to how they handle problem resolution, to how proactive they are in providing information and ideas that strengthen or find efficiencies in the mobility program.
Analyzing the financial stability of the RMC is important when considering the options for funding your mobility program. Some companies are not capable of funding home sale transactions, equity advances or other distributions on your behalf; other RMCs that offer to fund will charge interest and knowing when and how interest is calculated can affect the total costs of your program.
Reviewing client and employee survey results can highlight how well an RMC provides a positive employee experience for all types of relocations, employee assignments, or talent management initiatives.
You’ll also want to include questions that help you understand the company’s corporate social responsibility priorities and commitment to diversity, equity and inclusion (DEI) within their own teams and within the vetted suppliers they work with.
What Makes a Good Fit?
In assessing cultural fit, organizations will generally examine and score everything from the company’s fiscal stewardship and compliance certifications, to how they handle problem resolution, to how proactive they are in providing information and ideas that strengthen or find efficiencies in the mobility program.
Analyzing the financial stability of the RMC is important when considering the options for funding your mobility program. Some companies are not capable of funding home sale transactions, equity advances or other distributions on your behalf; other RMCs that offer to fund will charge interest and knowing when and how interest is calculated can affect the total costs of your program.
Reviewing client and employee survey results can highlight how well an RMC provides a positive employee experience for all types of relocations, employee assignments, or talent management initiatives.
You’ll also want to include questions that help you understand the company’s corporate social responsibility priorities and commitment to diversity, equity and inclusion (DEI) within their own teams and within the vetted suppliers they work with.
Ready to Go: Some Key Considerations
Decide in advance which key stakeholders from the business will be part of the decision-making process. The team might include representatives from HR/global mobility, procurement, payroll or total rewards, tax and IT.
As you scope your RFP project from discovery, draft and issuance, to scoring and shortlisting, to final selection and contracting, we propose the following key considerations:
Strike the right balance between an overly complex RFP and providing enough information so the bidders are not coming back to you with requests for additional details.
Develop a consistent scoring system so you can compare your responses side-by-side.
Make sure you fully explain your objectives and pain points to give your respondents an opportunity to specifically explain how they would address your priorities.
Require signed NDAs, to allow for the sharing of all relevant information that ensures answers are meaningful.
Provide detailed selection criteria, synopses of policies, an accurate picture of volume, the most prominent departure/destination locations and traffic lanes, total spend, any incumbent suppliers you intend to continue working with and communication protocols.
Clearly communicate the timeline, including all deadlines for the RFP responses, best and final presentations, decision and projected go-live date.
Make sure you are finding out what makes each supplier unique – what are their strengths and weaknesses.
Give participants enough time to answer thoroughly; short turnarounds in a one or two-week timeframe may not yield the best responses.
As the outcome of the process, you want a partner who can ensure:
The employees you are relocating have a positive employee experience that is tailored to their needs and feel adequately supported throughout all phases of the process.
Your mobility program is competitive while being cost-effective and fully compliant with local, national and global regulations and guidelines, particularly when it comes to immigration, tax and duty of care.
Your team is kept up to date on the latest industry trends and can demonstrate the ROI of your mobility program across the business.
Supply Chain Philosophy
As a Relocation Management Company (RMC), Sterling Lexicon makes the responsibility of selecting the best vendors a high priority. We believe the capabilities and service levels of our third-party suppliers directly reflect our values as a company. Our selection and management of vendors is carried out through a combination of formal RFPs and informal pricing exercises, resulting in contracts with several vetted suppliers in each service category. These steps, as well as the combined knowledge within our supply chain management team, help us determine the strongest suppliers in every market.
Quality and cost are both considered; while we require competitive pricing, we do not demand that our suppliers cut their margins, which can lead to a dip in quality.
Executed agreements lock in pricing with strict SLA and KPI requirements, and in the event a supplier asks to raise fees, we automatically initiate a formal pricing exercise.
Volume increases in a particular market add to our buying power, so in those instances, we solicit new pricing from our network, as well as non-network suppliers, to determine if changes should be made.
Periodic reviews are conducted in each service category to ensure we maintain a handle on the market and remain competitive without sacrificing quality.
We strive to maintain a healthy, competitive, mutually beneficial relationship with the suppliers who work with your valued employees.
What you need to know about pricing
Understanding how an RMC structures pricing will help when evaluating RFP responses:
Every RMC will charge a service fee based on the scope of work and outsource model. Bundled fees are popular for full-service initiations while a la carte fees will be charged for individual services
Household goods transportation expenses represent a significant cost in your mobility program. Domestic household goods transportation is governed by the 400n tariff: the higher the discount off the tariff, the lower your costs. International household goods transportation operates on a cost-plus basis. You can gain a good understanding of total costs by including a few representative sample moves in the RFP and ask respondents to price accordingly.
Temporary living accommodation costs depend on the procurement model used by an RMC. You can compare prices by including representative locations and different apartment unit sizes and understanding the ability of an RMC to secure temporary housing in all required locations is also important.
Home sale assistance will depend on what is offered in your mobility program, though most RMCs asked to manage a Buyer Value Option (BVO) or Guaranteed Buyout Option (GBO) will offer services for no fee because they collect a referral fee from the real estate broker. If the referral fee is not collected, the RMC may charge you a “non-compliance fee,” and that amount can vary.
Funding options can affect the total costs of your mobility program. There is typically an interest charge when the RMC provides the funds, and if using a pre-funded account supplied by your organization, there will be fees depending on the scope of work required.
The use of client-directed vendors may result in an additional fee if going outside the RMCs preferred and thoroughly vetted network.
Want to learn more about Sterling Lexicon and our team?
US
