In this article, David Edwards, Director of Sales at Montway Auto Transport, responds to questions about how the industry is changing, forecasted growth, trends and best practices to improve operations.
According to IBISWorld’s analyst, the industry was significantly impacted as a result of the global COVID-19 pandemic.
Current U.S. statistics:
$13.2 billion market size in 2021 compared to $14 billion in 2019
-1.2% annualized market size growth 2016-2021
The pandemic turned just about every industry on its head, but one you don’t often read about is the employee relocation services industry. This business sector focuses on simplifying the moving process for their clients by helping employee transferees with everything from moving all household goods to transporting personal and recreational vehicles, as well as property management and assisting with new school enrollment.
Q: How has the pandemic affected the industry at large?
Just like any other business, the pandemic put stress on the employee relocation services industry and the companies that support them. Relocations were paused as employees worked from home. Montway’s data regarding auto relocations supported that trend; even the most popular routes, such as from Seattle to New York or New York to Los Angeles, saw a decrease in moves.
While the traditional routes showed less volume, new relocation destinations started popping up. If a company instituted a permanent remote work policy, employees could essentially work from anywhere. While it may not always be paid for by the employer, Montway saw an increase of residential moves from highly-populated cities to more suburban and resort-like locations.
The retail side of our business saw dramatic growth and as a whole, Montway experienced 30% growth in 2020. We’re not out of the woods yet, but our relocation management clients are rebounding.
Q: What changes, innovations or trends are you seeing?
Our industry is always changing, but the pandemic accelerated many innovations and sparked several trends.
The lockdowns, remote work and social isolation spurred fast growth in technology. There is a greater focus on automated and easily accessible services. Where almost all businesses amped up their tech stack, moving and relocation did the same to support their customers and their transferees.
It’s critical to adopt new technologies and innovate to meet customer expectations. Montway is a tech-forward company and continues to innovate to bring both our relocation and retail customers the products and services they need.
Unique remote work arrangements
People want to spend more time with their families and there’s been an increase in companies allowing employees to work outside of their country of employment. As borders open up, the industry will see more global relocations.
Nearly 3 in 5 workers (59%) say they are more willing to relocate for work now than they were prior to the pandemic, according to a survey by Wakefield Research for Graebel Companies, Inc. Top 3 desired cities: London, Tokyo and New York
Rise of lump sum packages
A lump sum approach for employee relocation has been increasing this year. Some people find lump sum relocation packages controversial. New companies are entering the market and small companies are growing because of lump sum.
Lump sum packages simplify the relocation for the employer, but employees may find out that the lump sum payments do not adequately cover all of their relocation costs, which can create a frustrating experience. Some employer packages may be too generous, costing the company more than needed and requiring transferees to pay taxes on the remaining amount. There are instances of employees attempting to keep more of the money by using poor quality services that result in horrible relocation experiences. These scenarios are not ideal for the transferee or the employer.
In general, employers need to reevaluate their lump sum relocation packages to improve budgeting and forecasting while ensuring high employee satisfaction.
Increase in group moves
The global pandemic caused an economic downturn, resulting in an increase in mergers and acquisitions and staff reductions. Some companies are moving entire departments to new locations. A group move may be very disruptive for employees and a new level of expertise, respect and understanding will be required from relocation partners.
Q: What is your forecast for the market and what best practices do you have to help companies move forward?
In late summer of 2021, Montway saw its single best month for relocation moves, indicating an initial rebound in the market. Many forecasts show growth in the relocation services market. That being said, it will probably take another year or even a few years for the industry to stabilize.
As far as best practices for companies in the relocation management industry, I can recommend a few.
Be flexible and practice patience
Workplace processes continue to change. Human Resource and IT departments are assessing the new work arrangements and locations and policies are still being defined. Position yourself as a partner in their change and support your corporate clients every step of the way.
Improve understanding of claims
This is especially important for relocation companies that outsource their auto transport. Insurance doesn’t cover additional items loaded in the vehicle for transport. Plus, for the truck drivers, it adds weight and increases the risk of theft. A claim will be denied, which can create a bad impression for the transferee. More education upfront can help reduce confusion and frustration for both the employers and their transferees.
It’s rare that a vehicle is damaged in transport, but if it was, we ask that customers be patient during this time. With Montway’s seasoned in-house claims team, our process only takes an average of 16.2 days as compared to the 32-day average in the industry
Relieve internal resources of logistics duties
Stop straining your internal resources to execute tasks that a partner like Montway can handle. As a third-party logistics company, we have an expansive and vetted carrier network and can expertly manage all responsibilities around auto relocation, including insurance, dispatch, claims and customer service. Our goal is to provide a positive auto relocation experience for every single transferee, every time.
To submit a question to David Edwards, email David.Edwards@Montway.com or connect with him on LinkedIn. For more information on Montway’s Corporate Relocation Services, visit www.site.montway.com/relocation-services