10 July 2012

An Inconvenient Truth: HR, you're only as good as your vendors!

All Human Resources professionals are either supported by (or at the mercy of) the providers that support their organizations.

For, among others, the following services:
    Picasso, "Girl before a Mirror" - 1932  
  • Employment Law & Immigration
  • Medical Insurance
  • Benefits Management
  • Leave Administration
  • Drug Testing
  • Work Life Balance
  • Training
  • Recruiting
  • Payroll
  • Tax
  • Relocation, etc.

It usually goes that we inherit providers selected by previous managers.  And, most of the time, the HR people dealing with the day-to-day issues with a vendor don't get to select those vendors, or learn to make up for what that provider may not do so well - as an act of preservation.  It's just what good HR people learn to do...

Much tips the scales towards one provider or another, usually its price and capabilities.  Because at most companies the RFP process is so arduous, it does save time to go with an all-in-one provider.  You may go with one provider for Relocation support and also look for the potential to add other services on an as-needed basis.

Smaller specialized firms deserve a closer look.  Some reasons include:
  • VIP Client-Status: I've observed that some larger service providers you may be one of many clients and get lost in the crowd;
  • Real Subject Matter Expertise: A law firm that only specializes in employment law or immigration just has a distinct advantage;
  • Advocacy:  These firms may have their own lobbyists to influence positive change.

This means that some specialized providers may be at a disadvantage over larger firms.  Larger firms with sales departments just as large as their customer service group.  I'm not casting dispersion on this, it's just good business.

Time and time again, the same service providers have a habit of making the same mistakes.  Human Resources will call them in with a list of areas for improvement, see service improve for a time, and then slowly but surely things start slipping again.  

But, avoid some pitfalls, if possible:
  1. Though you may be tempted, avoid asking specialized providers to do something they are not equipped to do.
  2. Don't leave them hanging.  Ensure the provider is well-connected to point people in your organization and understands your culture.
  3. Avoid being a 'guinea pig' for a new service they may be adding to their offerings.  Wait at least a full year or two until they work out the kinks.
  4. Your provider may get bought-out by another larger organization.  
In my industry, international relocation, there has been a lot of consolidation of settling-in providers in particular.  Though it takes more time, finding the best provider with local offices in your key markets is the best approach, in my opinion.  

People in the Expatriate Management business will probably know who I'm talking about - because two major settling-in providers were 'swallowed' up by one.  What I've seen is the really good local consultants are putting out their own shingles.  I think there may be a reason.  

But even before the consolidation, I had some major misgivings about the service provided by some of the formerly independent agencies.  The usual breakdown is something like the following:

The Hourly Approach
  • Half-day program for business travelers;
  • Full-day program for short-term assignments;
  • Three days for single assignments;
  • Six-days for assignees with families.
Some providers offer a flat-fee approach.  Services such as Intrepid New Yorker offers a service that for a flat rate, they will do what ever it takes to acclimate your assignee to the area.  They often have consultants that have relocated internationally themselves and have a first-hand appreciation of its complexity.  They are able to offer a real-time cross-cultural training approach to their settling-in services.  

Other firms will hire current real estate agents; and while these agents have a lot of transferable skills and knowledge that will help your transferee - I worry that their real estate agent will rear it's head and before you know it they'll be showing houses to purchase not rent - which hurts assignee mobility and causes other downstream problems seen during the bubble when housing took a nose-dive.  

  1. Negotiate a flat rate, not an hourly rate with your settling-in provider;
  2. Look for firms that only do settling-in support;
  3. Identify firms who use former real-estate agents (not active ones) and transferees;
  4. Find firms that have consultants that you can contact directly - not ones that you have to go through many layers;
  5. Ensure that assignees only have to do one intake needs-assessment and that information is shared between the relocation consultant and the settling-in service.

“Those who cannot change their minds cannot change anything.”  
― George Bernard Shaw