Having been in the travel industry for most of my adult life, there was still a steep learning curve as I moved, ten years ago, from the hotel sector into the new and emerging world of serviced apartments. Having to adapt to and work in this diverse arena was akin to learning a new language.
A particular area that was alien to me, prior to joining this industry, was that of relocation. For anyone not versed in this aspect of the business, a relocation company offers a wide range of internal business processes to transfer employees, their families and their possessions, or even entire departments, to new working locales.
For those involved in this line of work, it is well known that the cost of relocating an employee can reach up to three-to-four times their annual salary. The highest costs in relocating an individual are housing allowances and tax.
It is worth investing a lot of time and energy towards this aspect of the business, to understand how it works and how it can connect with your travel programme.
For most companies, travel and expenses costs generally represent the second-highest controllable annual expense, exceeded only by salary and benefits, (and commonly higher than IT and/or real estate costs), so getting to know the human resources (HR) and global mobility department in your company could be very cost-effective.
Savvy suppliers
Many buyers are already immersed in this sector through working closely with their global mobility and HR departments, and with savvy serviced accommodation suppliers. Some have had a personal experience of relocation themselves; however, for most travel buyers, relocation continues to be an area of discovery and, as such, is a place to potentially deliver savings through education, partnership and consolidation.
I have had experiences where travel buyers have almost fallen off their chairs when presented with figures ten times more than what had been ‘tracked’ by their travel management company concerning usage for serviced apartments: £100,000 versus £1 million is a pretty big gap in anyone’s world, and predominantly down to global mobility/HR and relocation demand.
Closing the gap in knowledge in this area should start with researching where relocating your workforce falls both in terms of operation, and profit and loss. Primarily, meeting with your HR and/or global mobility departments to understand how many staff members your business moves in a year, to where, and for how long, would be a great first step.
Find out what drives the moves – new sales operations, leadership and graduate development programmes, opening or moving to new offices, acquisitions, and new clients are all reasons for relocation. Understanding the company policies and procedures that apply to each employee – whether they are commuters, permanent transfers or project workers, who might be on either short- or long-term assignments – will help you to understand the shape of your business.
Finally, connecting the dots and following the lines on profit and loss to fully understand ‘total’ accommodation costs would help most companies to consolidate their spend, make potential savings, and help deliver a more enhanced programme to their employees.
Jo Layton, managing director, The Serviced Apartment