Getting your relocating employees’ attention before they hire their own broker is key to capturing referral fees, keeping costs low and ensuring the best service.
In today’s Google- and Uber-fied world, your mobile employees are more apt to seek the answers and resources they need for their moves through their mobile phones.
And that can be a problem. While it’s tough to fault transferees who are anxious to put their homes on the market and start house hunting in their new location, it’s important that they do it the right way. Primarily because to keep program costs low, you want to make sure you capture referral fees.
Although referral fees are normal and customary, they can be harder to collect. This is partially because of the aforementioned transferee “eagerness,” but also attributable to the evolving demographics of the mobile workforce. Countless studies of millennials reveal that many are starting families later and don’t want to be saddled with debt, including, yes, mortgages.
So how do you capture more referral fees?
It’s not impossible. In fact, here are some tried and true measures to maximize collection:
Endorse Worldwide ERC’s addendum in your relocation policy.
We recommend including the ERC advisory document– commonly referred to as the “stop sign document”–within your policy. This bulletin endorses the practice of using company-approved brokers in relocation home sale and purchase transactions, and we’ve found it to be successful in effectively informing employees about how the process may affect benefits.
Mandate company-approved brokers
To maximize referral fee capture, your employees should be working with company-approved brokers. These brokers understand the nuances of relocation, from the time constraints to the (very) specific guidelines.
“From a counseling perspective, another advantage of using approved brokers is the familiarity we have with them,” notes Chuck Langley, Senior Mobility Counselor in our Boston office. “The brokers in our network know relocation and our unique processes, and are also well-versed in balancing excellent service to the employee with doing right by the corporate client.”
In fact, we see a growing number of companies put language in their policies to penalize employees who use non-network brokers. Penalties range from charging a non-compliance fee to forfeiting new home purchase benefits or tax gross-up on reimbursements.
That said, there is always room for improvisation. Chuck mentions that some of his clients are willing to work with employees who want to use their own brokers, provided the agent has relocation experience, understands the process, is willing to facilitate the home sale or home purchase in accordance with policy and, most importantly, positions us to collect the referral fees.
Communicate with employees early and often
Bottom line here is that you want to get your employees’ attention before they go and list their home with Cousin Eugene, the broker. Your policy, your provider, and their Counselors are your first line of defense.
“Most home sale policies that we see have language that says before transferees do anything, they have to talk to their relocation counselor,” adds Chuck. “This sets the stage for making sure they’re following direction but also for showing them that’s it’s a two-way street. If it’s a fully outsourced program and their homesale assistance is covered, their real estate commission is covered, and all of their closing costs are covered, it’s smart to make these benefits contingent upon working with company-approved brokers.”
Revisit home referral capture rates
On a quarterly or annual basis, you should look at your referral capture rates to know whether or not they’re meeting your desired targets. Work with your mobility provider to understand where the deficits may be. Are capture rates declining in certain geographic locations? Or within certain divisions of your company? Or just with new hires? You can’t fix what you don’t analyze.
Educate internal stakeholders
Your recruiters, talent development and local HR managers who will be negotiating packages should be evangelists for your policy guidelines. And while we don’t think it’s necessary for them to get “Do not list with a broker before talking to your Counselor” tattooed on their arms, it should be their mantra.