A Step-by-Step Guide to Better RFPs

Few categories of professional services are as far-reaching, complex or personal as those that support employee relocation. Whether you’re recruiting new talent from across the country or asking a C-Suite executive and family members to move halfway around the world, the team you partner with to manage it all must get it right. The experience is not only a reflection on your company as an employer, but it sets the tone for how happy and productive your employees will be in their new locations.

Given these high stakes and the investments companies make in their relocating personnel, it’s not surprising that procuring the outsourced services of a relocation management company (RMC) is considered by many to be a complex and potentially challenging process.

In an “RFP Doesn’t Have to Mean ‘Reason for Pain’ report, Sterling Lexicon set out to demystify common misconceptions and identify areas for improvement, informed by pulse survey data and the experiences and perspectives of procurement, global mobility and RMC professionals. Here, we consolidate that information into a comprehensive six-step guide.

Step 1—Define Your “Why”

Having a clear and specific understanding of what’s prompting the need to go to an RFP for mobility services and the goals you want to achieve will help shape everything else – from what questions to ask and which companies to invite, to the development of a priority based scoring method for evaluating your responses. In fact, a clear evaluation of the “why” may help you determine whether you really need to issue an RFP at all, or if you can save time and money with a focused request for information (RFI) instead. If you do decide the RFP is warranted, an initial RFI might still be worthwhile to help you narrow the field and eliminate those companies that cannot meet your must-have requirements.

Be sure to include all HR and mobility, travel, tax, legal, finance and procurement and other primary business stakeholders in the process to help identify and prioritize the goals.

Starting with this exercise will help you organize and be ready to share as much information as you can with the RMCs you are considering partnering with. Without sufficient program details, they can only respond with a broad company overview of what they do and not a solution specifically targeted to your needs or a roadmap for how they would address your challenges. An area of frustration expressed by procurement professionals is that they find mobility management RFP responses “all start to look the same.” One way to ensure differentiation is to be as specific as possible about your program, company culture and the areas you want to improve.

Our research found that addressing service issues is a leading cause to initiate mobility RFPs, followed by containing costs, meeting new program goals or outgrowing a current provider. If service issues or cost containment are your primary drivers, be sure to get to the root of exactly what is causing the poor performance or where expenses are running high. Are your challenges location-specific, for example, or across the board? Is there anything working well that you’d ideally want to replicate with a new provider, or is your current RMC falling short in multiple service areas? How much of the dissatisfaction is attributable to a cultural mismatch between the organizations, or insufficient communication? Where things are going wrong or costs are increasing, are they driven by your policy parameters, market conditions, or both? How proactive is the RMC team in offering solutions?

Answering these questions first will help you focus on the most important ones to include in your RFP.

Step 2—Conduct Your Research

Our survey on the perceived level of difficulty in procuring mobility services was telling, in that it revealed very different perspectives by role. More procurement professionals than mobility managers believed the process to be on par with what’s needed to source other types of professional support. Yet, procurement industry professionals also indicated that understanding the pricing models for mobility services is “moderately difficult,” and that “the contract negotiation process is frustrating.” Also worth noting, those we surveyed with larger programs of 100 employee moves or more a year felt that conducting RFPs for mobility services is more challenging than other types and that significant industry experience is necessary for procurement leaders.

Clearly, it’s important for all participants to understand the industry and its nuances, particularly procurement leads who may not have as much familiarity with how mobility management services are typically outsourced and charged. That starts with the recognition that no two relocations or assignments are the same. While relocation or assignment policies certainly help dictate consistent, pre-defined benefits and support services, each employee is unique and so many external factors will shape their experience.

With that in mind, true relocation management is about so much more than merely handling the logistics of a move. RMCs and their teams guide employees and family members through very personal, emotionally charged life changes. They work with a vetted network of hundreds, if not thousands, of service providers to coordinate and deliver support.

Many of the services RMCs provide may not appear to be very distinct on the surface, but HOW they deliver and communicate them to you and your employees is what makes each company unique.

It’s also important to understand who the key RMCs are, what they are best known for and stay on top of emerging developments and trends. This industry is all about trusted relationships: Your company’s
relationship with your RMC and, by extension, the RMC’s relationship with the partners within their own network, or those you direct them to manage. Strong connections with proven affiliates everywhere you need them to be is critical for an efficient program and a positive relocation experience.

Many in the industry have commented on the value of thinking of your RMC as a genuine partner, vs. merely a vendor providing transactional services. A successful partnership will help your company realize the true benefits of a comprehensive relocation strategy: getting the right people in the right place at the right time. The relationship should be cooperative and consultative, with the RMC understanding your company culture and listening to your priorities so they can help you arrive at policy decisions and approaches that are cost effective, efficient, and align with your business goals.

To help ensure a smooth RFP process, all participants who will be involved in the design, review and decision-making phases need to have at least a basic understanding of how the mobility industry operates. The key things to know center on core policy benefits and how they are structured/managed, what the different funding models are that RMCs use to calculate their costs, including any referral fees they may receive from network partners, and whether/what type of home sale or purchase assistance programs might be offered by your company.

• Sterling Lexicon has developed dedicated resources to help guide those who are newer to or less familiar with the industry, particularly procurement professionals engaging in their first mobility service RFP. For example: Details about the most frequently offered employee relocation services, and what approach companies typically take to manage them.
• A brief explanation of the different types of home sale programs commonly offered to employees.

For those seeking to educate themselves about the industry, there are plenty of professional industry resources with helpful tools and information.

Tips for Understanding the Mobility Industry and RMC Services

New to the industry or engaging in your first mobility services RFP? Here are a few tips to help you go in well informed and ready:

• Talk to procurement professionals who have sourced relocation management services before and can share what worked well, what did not, and what they have learned about the industry. If you don’t have access to anyone with specific experience in this realm, reach out to your internal and external mobility contacts, including potential RMC partners, to see if they can refer you to someone who can help.
• Meet with your potential RMC providers to ask them questions about how the industry works, and what outsourced models are most frequently used. 
• Connect with providers across the full spectrum of services. Relocation service providers are happy to share an overview of what they do and how they do it.
• Interview other corporate mobility leaders. This is a very friendly and open industry, full of people with an inherent desire to help. Your internal team, or your potential RMC respondents, can likely introduce you to individuals who are willing to take the time to share their knowledge and expertise.
• Conduct online research, or if possible, attend an industry event. As shown in the industry resources section below, there are multiple professional organizations and local groups dedicated to talent mobility and that offer articles, podcasts, virtual and in-person courses, educational seminars and networking programs.
• Schedule time with your internal team. Once your external research is complete, your internal mobility team members and other HR, tax or legal professionals can help fill in any gaps and share how your company’s relocation program compares to – or differs from – your findings and broader industry trends.

Industry Resources

Canadian Employee Relocation Council (CERC)
Corporate Housing Providers Association (CHPA)
EuRA
Expat Academy
FIDI Global Alliance
The Forum for Expatriate Management
International Association of Movers (IAM)
Relocate Magazine
RES Forum
U.S. Regional Relocation Groups
Worldwide ERC^® (Employee Relocation Council)

Step 3—Prepare Your RFP

Now that all stakeholders have a good idea of how the industry operates and what is working well or needs improving in your own program, you’re ready to develop the RFP document and questions, prioritized by top goals. A few recommendations to get you started:

• Ask your RMC prospects, fellow procurement and mobility peers outside of your company if they have a mobility services RFP templates to share – many will keep samples of good, general questions you can curate and customize to meet your own company’s needs.
• Prioritize and customize the questions in sample templates to fit your needs while eliminating those that are unnecessary or do not apply to your program. As with Step 1, this process should involve all HR and mobility, travel, tax, legal, procurement and other primary business stakeholders as appropriate.
• Confirm with the review group if there are any questions missing – it’s important that all stakeholders have their ‘must-haves’ included.
• Determine whether the questions will help you identify and decide who the best partner is to support not just your relocation/global mobility program and company culture, but your overall business priorities. For example, are there sufficient questions addressing your potential partners’ diversity, equity and inclusion (DEI) or corporate social responsibility/environmental social governance (CSR/ESG) strategies to ensure they align with your company’s goals and objectives?
• Schedule discovery meetings with the top RMCs you intend to invite, to gain a better understanding of their service and technology capabilities, areas of strength, geographic reach, culture and ability to meet your goals. These “get-to-know you” meetings will not only help all participants better understand each other, but contribute to ultimate time and cost savings, in that you can eliminate those that are not a good fit early on, and RMCs can better understand how to tailor their responses for your company and program. They might also help you identify new questions to include, or ways to refine your initial list to ensure you get the best responses.
• Assign a weight to your final questions to fit with your priorities. Taking the time to develop a ranking system or score card now will help you evaluate the responses.
• Be sure to ask for references, preferably in similar industries and with relocation program sizes and scopes that mirror your own. Ask for newly signed clients, too and plan to inquire about the implementation process.

To set your potential partners up for success in providing the clearest value and most competitive offering, plan to share the following:

• Your current policy and whether you plan to keep it as is or make any small or major changes to it? (NOTE: If significant changes are planned, we recommend making them prior to issuing the RFP so respondents can adequately detail how they will support the policy and at what cost)
• Volume of moves by move or tier type
• Total annual program spend
• Your expectations about account management, such as frequency of meetings
• Your expectations on reporting and technology, including what HRIS or other business platforms you need your provider to integrate with
• Funding expectations, including billing frequency and model (centralized or decentralized)
• Any current required suppliers and whether you hold contracts with them directly, or whether you intend to use the RMC’s contracts
• Whether you have a home sale offering in your program, and if so, how many home sale and purchase transactions you typically have per year, what the average home value is, and what type of home sale program are you using (e.g., direct reimbursement, buyer value option [BVO], or guaranteed buyout [GBO]).

Remember, to ensure you get the best results, your RFP document needs to clearly and specifically communicate why you are going to RFP, what challenges you are seeking to solve and what you expect to achieve with a new provider. The more specific you can be about your relocation policy, the scope of work and any cost scenarios you ask respondents to comment on, the more detailed, unique and accurate your responses will be.

Step 4—Identify the “Who”

The next critical step is to identify which RMCs to formally invite to respond, and which internal parties should be part of the review and decision-making phases.

Consider the use of a RACI chart to help you determine who in your organization will be responsible, who will be accountable, and which parties should be consulted or just need to be kept informed.

As for the external RMC invitee list, hopefully the discovery meetings you held as part of Step 3 have confirmed that relocation management companies come in many shapes and sizes, including boutique, small, mid-tier, large and mega firms. Some companies provide a more tech-driven solution while others take a very high-touch and personal approach. The experience you and your employees will have will depend largely on the RMC’s size, global reach, culture and service delivery model. For example, smaller, boutique RMCs may be very personal and hands-on, but may not have the global experience or capabilities of a larger RMC. The largest RMCs in the industry are set up to handle high-volume programs with consistent processes, but may feel impersonal, transactional and not very flexible. Mid-sized RMCs may bring a combination of personal touch and global reach as well as leading technology solutions. Other RMCs offer more of a self-serve or portal driven experience.

Hopefully, defining your “why” and goals in Step 1 has helped you identify what kind of employee experience you want to provide, and what you need from an RMC to deliver it.

Once you have an initial list of those RMCs you know have the capability to meet your program needs, you can focus on service levels and cultural fit. Consider what their overall approach looks like through the lenses of:

Employees – yours and theirs. Pay close attention to their communication practices, tenure/turnover rates and how they demonstrate the support they will deliver to the relocating employees and families entrusted to their care.

• Account management teams – consider how experienced and invested their account managers are in the industry/what professional certifications they hold.
• Technology – including how easily their solutions will integrate with your current platform.
• Funding capabilities – including what financial service controls and business continuity plans are in place and the company’s history/stability.
• Scope and reach – understand how well equipped they and their partner network are to handle your current relocation volume and geographies while easily scaling to meet changing needs.
  To help keep the response phase manageable, a best practice recommendation is to cap the RMC invitee list at no more than 5 or 6 firms.

Step 5—Evaluate Your Responses

Reviewing the responses and comparing costs is one of the major pain points consistently reported with mobility service RFPs. Not all companies use the same fee structures, and it can be easy to miss additional fees that are possible to incur if they are not included with or explained in the core pricing matrix.

Our research found that the more RFPs respondents had conducted, the more likely they were to rank costs as very difficult to understand, perhaps because of the further exposure they’ve had to the different types of approaches to fees.

It is important to know what percentage of the total spend your current arrangements represent and be able to calculate how your RFP responses compare. Surprisingly, our research found that 50% of survey respondents did not know this number. Your RMC partner should be prepared to report this number at any given time or make it available to track on their portal’s dashboard.

This is where the weighted score card developed in Step 3 will help you evaluate the responses, compare “apples to apples” and be sure you understand the core, fixed fees, any à la carte expenses and bundled fees. There may still be the need for some manual, back-end calculations, but using the grid helps better compare responses.

As you review your responses and to help minimize confusion about costs for mobility services, consider the following:

Areas you can expect to be consistent from one RMC to another, due to these costs being largely policy-driven, might include–

• Real estate and mortgage fees
• Lump sum and miscellaneous allowance payments
• Tax equalization or gross-up costs
• Travel-related costs, including airfare, hotel and car rentals

Some costs that might differ minimally from one RMC to another include–

• Rates for the shipment of household goods (HHG), or if the RMC has unique HHG solutions, such as a small shipment program
• Temporary housing, including whether an aggregator is used to conduct the widest possible search of available properties

Negotiable costs will likely include–

• Bundled and à la carte service fees for each relocation you initiate
• Implementation fees
• Policy development/review fees
• Technology access fees

The real savings in any mobility program is the efficiency with which the RMC can manage the program on your behalf. The things that have the potential to drive up your costs include:

• Poor home finding approach. As time goes on finding a rental or home to purchase, the travel,
  temporary housing and storage costs, as well as lost productivity, all increase dramatically.
• Poor management of a home sale program, or not using the most cost-effective home sale option for the company and the employee. If the home sale program is not structured and administered properly, the financial and tax ramifications can be substantial.
• Service issues. Unhappy employees (and family members) cost you in lost employee and team productivity, higher turnover and lower morale.
• Failed relocations. The most expensive relocations are the ones that start and don’t happen at all or end early. The company faces the cost of finding a replacement as well as the loss of all costs invested to that point.

RFPs should focus on all the direct costs listed above, while also including questions and decision-matrix evaluators that highlight the less tangible ‘fit’ the prospective partner will have with your company. Now is the time to speak to the RMC’s references so you can understand from other clients how well the onboarding process went and how happy they and their employees are with the management approach.

An RMC who aligns with your culture and goals, understands you well, and efficiently manages your program on your behalf is the company that will generate the greatest overall value.

Step 6—Make and Communicate the Decision

When it comes time for a decision, who makes the ultimate call? Our research indicated that about 64% of mobility stakeholders are responsible for the final decision, either alone, or with input from their executive leadership teams. For those with larger programs, the decision is often made by a committee.

Regardless of the approach, it’s important to ensure there is buy-in from company leadership, and all parties understand the methodology used to make the decision.

The next core focus areas must be on effectively communicating to your key audiences:

• The RMC awarded the contract and all other final participants. Wherever possible, it’s helpful to share some details with the unsuccessful bidders to help them understand where they can improve.
• Your internal stakeholders across the entire organization, including setting expectations around the timeline for onboarding the new team and transitioning the program.

Congratulations, you’ve followed a rigorous and disciplined six-step program to conduct a successful RFP! Building on the lessons learned and cross-functional collaboration, you can now turn your focus to a successful transition and establishing your key performance indicators (KPIs), including a reporting cadence.

We hope your decision results in a long-lasting, mutually beneficial partnership that delivers happy, productive employees everywhere you need them to be.

Need additional help or support along the way? Contact one of our experts today.