Relocation: From ‘Once Was’ to ‘Now Is’

Kevin Kelleher, president and CEO of Cartus, addressed RISMedia’s Real Estate CEO Exchange in New York City on September 10, 2014. He has led Cartus throughout its growth and transformation from

a predominantly U.S.-centric relocation firm into a global market leader in related HR and financial services. He spoke about corporate trends in employee mobility and their implications for residential real estate brokerages. Following, is a summary of his observations.

Kevin_KelleherAccording to Kevin Kelleher, new business strategies are changing corporate staffing needs and posing new mobility risks and challenges—not only in whom to move and where, but also in meeting regulatory and risk management obligations:

  • Worldwide workforces – Many companies are redeploying their people globally (for example, one employing staff in over sixty countries).
  • Changing move types – Rather than making permanent transfers or long-term assignments, employers are more often using more flexible short-term and commuter solutions, even for global staffing needs. In the US, renters are more prevalent than ever.
  • Escalated compliance requirements – As nations intensify security rules and pursue new tax revenues through reporting and enforcement, employers must navigate complex visa/immigration, data security and tax rules at risk of severe non-compliance penalties.
  • Contingency planning – Facing volatile geopolitical and environmental conditions, companies are investing heavily in Disaster Recovery and Business Continuity preparedness, through technology redundancies and other infrastructure needs of critical functions.

These changes are affecting companies’ buying choices for mobility services. Some selection criteria have been given elevated importance, particularly: Quality (People and Service), Cultural Fit/Partnership, Reliability/Execution, Value and Stability. Buyers have enlarged the scope of outsourced mobility services, often requiring an international footprint and many more administrative, accounting/tax and multi-policy services. Even their buying processes have changed under Procurement/Sourcing’s control, with an accelerated RFP cycle, much deeper questioning and an emphasis shift toward cost, risk management, social/ethical concerns, supply chain management and quality assurance.

Employers’ Relocation Policy changes have had an insidious negative effect on transaction volume available to real estate brokers. The higher proportion of short-term assignments precludes many home sales because people keep their original homes for their return. The proliferation of tiered policies scales real estate assistance by job grade or salary, and only the higher tiers receive the traditional full real estate assistance for home disposition and purchase. Renters or small-household relocations have increased in proportion, in part, because their costs are lower and they can better afford to move with only limited company assistance. Fewer homeowners are electing to sell and buy because of eroded equity in their departure homes and more stringent financing rules on purchases. All told, U.S. Home Ownership is at its lowest rate in almost 19 years at 64.8 percent of households (Q1, 2014).

Still playing out is the influence of generational change in the workplace. As Baby Boomers are giving way to the Gen X/Gen Y/Millennials, we seem to be seeing a redefinition of connectivity and community, toward a less rooted population, which—while highly mobile—may not value homeownership to the same degree. The convergence of business climate, demographics and attitudinal change is signaling a permanent drop in the conventional relocation volume of transferred suburban homeowners that were once the coin of the realm for the relocation management industry and its real estate broker partners.

Kelleher encouraged the attending real estate industry leaders to consider how these changes will affect them. He calls for us to recognize the emerging new customer populations and to adapt and create services to attract and support them in partnership with relocation management companies worldwide.

John Sculley can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

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