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Relocation Directors: Now What!?

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By John B. Sculley, SCRP

Relocation directors are confronted with sweeping changes in their markets and organizations. In times of such exploration and experimentation, we often can best shape our future by understanding our origins and past growth.

This month, we’ve asked Marge Fisher, management consultant, to give us such a retrospective on the relocation director function. She’s had more than 30 years of experience in relocation program development, policy administration and family assistance, including serving (1992-99) as the executive director of the Relocation Directors Council, a non-profit organization of professional management-level individuals within the relocation industry. Marge holds a BS in Economics from Connecticut College and a MS degree in Human Resources and Counselor Education from the University of Bridgeport.

At many brokerages, the traditional Relocation Department and the role of its relocation director are earmarked for change. Eroding relocation volume and revenues are prompting brokers to redirect these resources toward alternative and new customer sources and service lines.

This is uncharted territory, though, and the best available options are often unclear. Relocation Directors are trying and testing offerings for market segments that stretch the definition of relocation but may tap expanded demographics and move types.

Why did real estate brokers first begin to set up Relocation Departments within their firms?
When the relocation industry began its explosive growth in the 1970s, some brokers foresaw big potential business from third-party and corporate referrals. They added Relocation desks to their staffs but sometimes, as Marge recalls, with opposite directions in the structure and expectations for their new relocation departments. Some were clearly profit centers whose incremental business was tracked, credited and accounted. Others were ostensibly set up as service centers, meant to enhance company image and improve agent attraction and retention.  Their structural differences? “It’s all accounting,” Marge said. What they had in common though was a belief that relocation would be fundamental to brokerage growth.

How did Relocation Departments evolve into the 1980s and beyond?
Sustained relocation growth made the relocation function strategically vital for leading brokers. Marge saw firms establishing Relocation Departments as “a defensive mechanism, showing that the broker took relocation seriously.”  They were also responding to the expanding influence of relocation management companies, which increasingly sought brokerages providing a centralized point of contact. The Relocation Director was expected to select, train, certify and manage those agents that would be eligible for relocation referrals.

Admittedly, at some brokerages the Relocation Department “presence” was largely cosmetic – more a “look rather than capacity.” The seriously committed brokerages, though, went on to develop legitimate full relocation department capabilities including comprehensive customer services, agent training and strong relationship support for their third-party and corporate clientele.

This divergence in the evolution of Relocation Departments into haves and have-nots left open questions on different firms’ capacity to serve relocation clients. The industry has always lacked a consistent model of Relocation Department structure, processes and standards. Marge Fisher (and other relocation managers) “have always used Relocation Directors to select agents for (their) needs.”  The local Relocation Director has knowledge, insight, relationships and accountability that reassure and support clients.

What’s pressuring the Relocation Department function today?
Some external macro changes have affected the entire relocation industry:  fewer employer-sponsored moves, a lower homeowner proportion, reduced assistance policies, slower housing markets, and potent real estate technologies. As the relocation management companies have adapted to this tougher competitive environment, their demand for real estate referral fees has become more stringent in capture rates and percentage amounts.  Higher referral fees to RMCs leave fewer commission dollars available to agents, making relocation referrals less attractive to top agents and their brokers. This trend relegates relocation referrals to newer and younger agents who tend to be less educated and experienced in the special requirements of relocations. Brokerage service quality, performance and ultimately closing revenues can be impacted.

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