Relocations build $15 bil. industry

Service fees generated by employee relocations in this country last year built a $15 billion pie for that industry, according to the Employee Relocation Council, a national membership organization based in Washington, D.C.

The ERC’s members are the entities that effect and affect a family’s relocation. Among them are Realtors, moving, title and mortgage-lending businesses, corporate-relocation departments, and relocation-service companies, which vend a myriad of services to corporations, from home buyouts to research, analysis and full relocation management.

On the receiving end of the relocation process is the employee and his or her family for whom relocation means replacing the familiar with the unfamiliar.

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State Farm Insurance Cos. has sought to soften this impact through programs and benefits for employees considering a move, according to Scott Knudson, who manages State Farm’s corporate relocation department from its headquarters in Bloomington, Ill.

By assessing a family’s needs and providing in-depth information about a new location, State Farm believes employees can make more informed decisions before accepting a transfer, Knudson said.

Additionally, State Farm has added optional benefits to its relocation program, including assistance in rental and homefinding, help with home sale, closing costs, losses from home sale and a guaranteed buyout program, Knudson said.

In past years, when employees were relocated for promotional reasons, it was generally considered an ideal move, “a chance to move upward,” Knudson said. But as State Farm, like other large companies nationwide, pares for efficiency through consolidation and reorganization, now “transfers are more a lateral opportunity,” he said.

This has “changed the complexion of a transfer from ideal to kind of an uprooting,” Knudson said. Family complexions have changed, too. Dual career incomes and responsibility for aging parents “may be the pivotal point that decides whether a family can move,” Knudson said.

As other large companies do, State Farm handles some relocation aspects in-house and “outsources” others to relocation service companies as well as to companies providing special expertise, such as employment assistance to aid the job search of dual career spouses.

Reorganization of fire and auto claims operations could allow “more people the opportunity to come into Greeley” in 1997 and 1998, Knudson said. Greeley is State Farm’s Mountain States Regional Office.

Additionally, with plans to consolidate life and health operations, Knudson said employees in those areas could have an opportunity to move from Greeley. However, Knudson anticipates the net exchange would be a plus for Greeley.

State Farm estimates current costs to relocate a homeowner is $50,000 and $10,000 to relocate a renter, Knudson stated. These costs do not reflect in-house labor costs.

One slice of the $15 billion industry pie goes to real estate companies as referral fees and sales commissions. Getting relocation business makes for strong competition among realtors, who often are paramount in determining whether a family’s relocation experience turns out “good” or “bad.”

Primarily, Realtors obtain referrals through nationwide referral networks. Each network is exclusive to its members: franchise brokers, independent brokers and relocation businesses which refer only to their members.

Fort Collins agent Marilyn Pedri, of Coldwell Banker, Everitt & Williams, said slightly more than half of her sales come from employee relocations. An agent for 16 years, Pedri still receives referrals from agents she has worked with in the past, from the Coldwell Banker network and from local Chamber of Commerce inquiries.

“Having been part of a corporate family, we’ve been transferred many times,” Pedri said. “I have a degree of empathy for the emotional roller coaster the transferring family is on when they come into a (new) town,” she stated.

She recalls a transfer when a number of agents called on her husband whose company was initiating their transfer. “But only one agent thought to call on me,” she said. “That was the one we worked with.”

Although several large Denver real estate companies have created relocation departments, the only one known to exist in either Weld or Larimer Counties is at Sears and Company of Greeley. Dorothy Elder has been its director since inception in 1991.

Elder, who does not act as an agent, said her job is to provide a service both internally for the agent and for the community” by tracking relocation issues and compiling data affecting the Greeley market.

“The big guys know how to do this (use relocation services)” she said. But the “small companies who don’t move many people around” still need to know that relocation services exist should they need them, she said.

Most referrals come to Elder from PHH, a giant relocation service company with a broker referral service arm accessed only by independent broker-members, like Sears. A few referrals come from corporations; others from local sources like the Chamber of Commerce and the Economic Development Action/Partnership.

Serving as the families, initial contact, Elder becomes their “facilitator, problem-solver, tour guide and information center. (Newcomers) want to know everything about a community, even things they would be reluctant to ask their employer,” she said.

A common concern voiced by new-comers to Colorado is the weather, particularly “tornadoes and snow,” Elder says. After explaining weather patterns common to the Greeley area, Elder said she often counters with the question: “Do you like to golf year round?”

When a family is ready to house-hunt, Elder said she tries to pair the family with a Sears agent “best suited to their personalities and needs.”

Although the needs of each family are unique, Pedri said, they all have a “basic, underlying fear or hesitation about change.” Therefore, nothing she can do for a family is “beyond the call of duty.”

Elder agreed, citing the agent who brought a decorated Christmas tree and a cooked holiday dinner to her clients on closing day. Good agents “get involved in people’s lives,” Elder concluded.