By John Sculley, SCRP
While the residential marketplace is finally showing real traction in its recovery, the relocation segment of the market has been the focus of much debate. The volume of employer-sponsored moves dropped precipitously during the housing collapse and recessionary years. Will we see a return to business as usual for traditional relocation services? Or has this segment morphed irrevocably, calling for different brokerage models for mobility services?
From the perspective of our relocation-focused consulting practice, we know that corporate relocation business used to be a thoroughbred money maker in many brokers’ stables. While we don’t expect full recovery of direct client/broker relationships or referral volume, we think that corporate relocation and business-level relationships can still be harnessed to plow much worthwhile revenue for adaptive relocation directors and their firms.
We’ve pieced together the limited hard data on corporate mobility from Worldwide ERC to reconstruct volume trends. We estimate that from its peak volume in 2006, corporate relocation volume declined at least 28 percent by 2010, and even this bleak result may be understated. Employers cited hiring freezes and transfer reluctance as new-hire moves declined to only ¼ of all relocations. Considering that WERC membership is weighted toward larger and more sophisticated mobility programs, we suspect that smaller and less efficient companies likely reduced hiring and relocations even more sharply.
Anecdotally among service providers, we have heard estimates of 30-50 percent volume shrinkage over this period, which we can neither prove nor disprove but intuitively accept.
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