Weichert Realtors Press Release
Weichert Relocation Resources Survey Gauges Real Estate Market's Impact on Workforce Mobility
6/10/2008
MORRIS PLAINS, N.J. – Facing a softening real estate
market, mounting competitive pressures and a tightening economy, today’s
corporate relocation managers are modifying their policies to better contain
costs and keep employees mobile. To gauge the extent of these changes, Weichert
Relocation Resources Inc. (WRRI), one of the world’s leading relocation and
assignment management companies, has released the results of its second annual
survey of relocation policies and practices, Mobility and the Current Real Estate Market.
WRRI
surveyed corporate relocation and HR professionals from 204 North American
employers. Echoing the results of last year’s survey, rising inventory costs
was cited as the factor having the greatest impact on corporate relocation,
followed by increases in requests for exceptions to policy and reluctance to
relocate.
Survey
results also indicate that companies hoping to ride out the market slowdown
should rethink their devotion to the Buyer Value Option (BVO) program, a fixture
of many corporate relocation policies. Seventy-eight percent of companies that
offer a BVO reported experiencing an increase in days on market, the average
being 130 days.
“Some
companies are reluctant to embrace innovation, sticking with programs and
formulas that originated and thrived under more vigorous markets because it’s
what their peers are doing,” said Ellie Sullivan, Director of WRRI’s Consulting
Services group.
“While the
BVO was certainly an effective tool in years past, under today’s market
conditions, it’s giving rise to policy exceptions, extended temporary living
and duplicate housing costs that could be avoided by looking beyond the status
quo and seeking new and innovative alternatives.”
Other
noteworthy findings include:
- To fortify
their employees’ sales and marketing efforts, more companies are enforcing
selection of pre-screened brokers (up to 65 percent in 2008 from 61 percent in
2007), minimum marketing periods (up to 85 percent from 70 percent) and list
price guidelines (68 percent over 62 percent).
- The soft
market is giving rise to duplicate housing costs, with 62 percent of companies
covering payments for employees who fail to sell their departure area homes
before moving into their destination area homes.
- The use of
incentives to generate demand and stimulate sales is on the rise, to both
brokers (28 percent in 2008 over 24 percent in 2007) and buyers (27 percent
over 16 percent).
- Twenty-five
percent of companies are seeking alternatives to the traditional appraisal
process, eliminating costly appeals and matching employees with pre-selected
appraisers.
“These
survey findings are consistent with our recent consulting engagements which
show that the single most important strategy for controlling overall relocation
program costs is creating demand for employee homes,” said Sullivan. “Companies
that challenge conventional thinking and identify innovative ways to create
this demand will ultimately enjoy lower costs and reduced inventories.”
To receive
a copy of the complete survey report, Mobility
and the Current Real Estate Market, e-mail solutions@wrri.com.
About Weichert Relocation Resources:
Weichert
Relocation Resources Inc. (WRRI) delivers innovative Next PracticesSM—the next generation of relocation and assignment
management services—that help some of the world's leading companies avoid
inventory, increase employee home sales, enhance mobile workforce management
and reduce program costs. WRRI is recognized as the growth-oriented industry
leader, providing a unique combination of stability, financial expertise and
seasoned leadership that has made the company a trusted, proactive partner to
clients throughout the world. A progressive, independent company, WRRI is
committed to delivering Raving Fan® service; investing in new capabilities,
technologies and talent; and bringing unmatched innovations to market, such as
the industry’s only complete, end-to-end global workforce mobility solution.
For more information, visit wrri.com.
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