Do You Feel Fear or See Opportunity?
After returning from a jam-packed week in Salt Lake City, attending RDC and WERC, I have had some time to reflect on what I learned. There were no real surprises, but my suspicions were validated with industry study results and direct feedback from the relocation management companies (RMCs) and corporate leaders. The corporate relocation business, facilitated by RMCs, has declined significantly since 2022 and has remained relatively flat over the past two years through 2024.
There is no indication that a significant improvement is expected in the coming years. Sure, lower interest rates, a stronger economy, reduced political strife, and improved immigration processes may provide some relief, but we can't really bank on any of that.
There was impressive conference attendance, which speaks volumes for the companies that were willing to invest to send their people. There is never enough real estate company representation for my liking, but I was pleased to see a lot of familiar Relocation Directors in attendance.
1400 attendees
400 first timers
100 CEOs in attendance
34 Countries represented
Hot topics.
As expected, there was considerable discussion about emerging trends and strategies in immigration, AI, and lump sums. There was also significant discussion about employee satisfaction and choice. Creating programs and services that cater to the unique needs of the transferee and their family is a high priority for providers and employers. The cookie-cutter policies offering one-size-fits-all solutions seem to be on their way out, even though they are cheaper and easier to administer. They are listening to what makes for a happy relocation, which contributes to long-term employee satisfaction and retention, ultimately benefiting the overall ROI.
VUCA
I was pleased to hear that WERC has conducted extensive studies that will finally provide us with an accurate picture of the types of services and volumes of relocations taking place worldwide. More to come on that (from WERC and from me). It feels as though we have been operating in the dark, given the secretive nature of RMC activity in the past. Hopefully, it will give us a road map to adjust our service delivery based on looking back and looking forward.
Anupam Singhal, President and CEO of WERC, does an excellent job of discussing fact-based reality taken from data-driven research without sounding alarmist. He used the acronym VUCA to describe the current state of our industry (and the world in general), and it basically reflects the economy and geopolitical uncertainty for the current to medium term.
Volatility
Uncertainty
Complexity
Ambiguity
That pretty well sums it up. In the longer term, he said, we are facing de-globalization, protectionism (defined as an economic policy of restricting international trade to protect domestic industries and jobs from foreign competition), behavioral shifts, and the impact of AI. Many unknowns that don’t point to more relocation. If anything, they muddy the waters for a return to what we perceive as normal. People are staying put longer with less motivation to move.
Survey says...
A recent article in The Wall Street Journal stated that, historically, an average of 20% of the population moved annually. Just 7.8% of Americans moved in 2023, the lowest mobility rate recorded since the U.S. Census began keeping records in 1948.
Among those who moved in search of employment in recent years, we reached a high of 7.5 million in 2015, declining to 5.4 million by 2023.
The number of people moving for a new job or transfer peaked in 2000 at 4.5 million, down to the current 3.2 million (total people) in 2023. That is a 41% decline.
However, when broken down by household heads, the number drops to 1.8 million.
But only 289,000 of those moves were handled by RMCs.
Two hundred eighty-nine thousand moves are not enough to sustain the number of RMCs currently operating in today’s market, because I suspect a fair amount of those are renters and interns who do not generate the kind of revenue they need to sustain life. The RMC panel at RDC pretty much stated the same. They were very transparent in the sentiment that there will be and should be consolidation. They also confirmed that the demands from their corporate accounts regarding improved technology and AI are wildly expensive and unsustainable as they try to keep up with the rapid changes. And as we know, they cannot continue to raise referral fees to cover those challenges.
There is opportunity.
The good news is that the above move volume statistics reveal many opportunities available that are not tied to high referral fees and RMC-controlled volume. It could be self-moves, unmanaged lump sums, affinity opportunities, or an in-house corporate program. Seeing the hard statistics up on that screen was sobering.
This is where your local expertise comes in. These opportunities are ideal for local brokers to handle by tapping into the local consumer, corporation, or organization. Spend time exploring who you know in influential positions and who is making moves in your own community. It doesn’t matter if it is only two transactions a year. That’s two you didn’t have before.
So, you can choose to feel down about the future of our industry, or you can look at it in a different light. I see an opportunity here for those who are willing to think differently about what our business actually is. And work hard, there's that too. It is and can be much broader than corporate-sponsored relocation. So how you proceed is up to you. What will you choose?
Slide from Anupam’s presentation.