Article summary

In Global Mobility, large-volume Vendor relationships are often renewed and can last five to ten years in total. During this period, it is highly likely that the Customer’s needs will evolve. Mechanisms are required to ensure that the vendor service evolves as well. In addition, the selected Vendor must continue to out-perform the market during the contract life. A global Mobility team or a Vendor Manager within the Customer organization can bring value by ensuring that vendors both adapt and deliver in measurable ways.


Context

Global Mobility is a highly sophisticated function within large organizations. By managing the organization’s most business-critical personnel, Global Mobility teams touch the heart of business strategy. At the same time, Global Mobility functions are often transforming themselves as part of internal corporate transformation efforts. Top-notch client service must be assured while continuously developing the most efficient HR organization. Therefore, Vendors who support Global Mobility must also constantly improve their service and – equally – must often re-shape their delivery model to suit the Customer throughout periods of great change.

Global Mobility Vendors directly or indirectly support their Customer’s talent mobility strategy. Talent mobility strategies require organizations to develop leaders who can think globally and manage across cultures. Successful Assignees are a precious resource, possessing the precise business skills that are needed elsewhere to further business growth. Nothing could be harder than managing this costly talent pool. The best Assignment candidate may come from any part of the world, work in any part of the world, may have diverse nationalities and conflicting salary and lifestyle wishes. Certainly, they will have high service expectations, and, for the organization, retention of that talent will be a strategic priority. For some corporate customers, valuable Assignees may have significantly more contact with a Vendor than with the Customer’s own Global Mobility team.

Global Mobility teams are not necessarily expected to be strategic. They may be primarily viewed as important service organizations, while a smaller advisory team may be attached to the Talent or Compensation function. Global Mobility services are frequently delivered amid organizational change in HR, including offshoring, regionalization or redeployment of service centers closer to front-line business activities. Services are required to be operationally efficient yet responsive to Assignees and business customers. Vendors must be capable of performing in the same environment.

 To support Global Mobility teams, the appropriate Global Mobility vendors need to satisfy some core characteristics: execution capability across a seamless international network, empathetic and empowered consultants, an astute, consultative management team and a compelling and real technology strategy. Organizationally, a Vendor may also need to act as “lead” supplier, providing orders and data to other vendors in different service areas. A vendor may need to part of a supplier team (some authors refer to an “ecosystem”) in which processes and data are handed off between contractors to create a seamless service to Assignees and to the corporate client.

The issue

At the Customer, vendor management means harnessing the expertise and global reach of a relatively generic but strong vendor to meet the Customer’s own evolving strategic Global Mobility goals over a sustained period of time. RFP’s are hotly contested tenders between very similar, generic vendors. In addition, the number of capable suppliers is distinctly limited. There are perhaps seven or eight truly global relocation firms and RMC’s. There are four, at most five, tax firms who can operate at scale (and often the choice is limited to two or three). To this can be added three to four specialist immigration networks, and so on. A switch between Vendors therefore requires a compelling reason, such as the Customer’s wish to test market prices, consolidate vendors, an auditor change, an unmet technology requirement or an unresolvable service failure. In practice, a Vendor relationship may last five to ten years unless the Vendor’s offering falls behind the market. Yet incumbent Vendors are misleading themselves if they assume that Customers can accept the original contract terms until the contract expires.

Vendor Manager responsibilities

Managing a large, long-term Vendor relationship creates a series of challenges, including:

  • A changing Customer: service to the customer’s most talented yet most diverse employee population must remain consistent, even though the Customer organization will certainly change. Customer changes include shifting geographic focus, mergers and transactions, organizational transformations, switching other vendors serving Global Mobility and recurring cost reduction initiatives,
  • Decreasing market price rates: Competitive price rates will likely fall over the life of the multi-year vendor contracts, as the supplier market creates more efficient delivery organizations, supply chains and software.
  • New Customer priorities: New Global Mobility policies will mean new and possibly reduced scope, additional services may be outsourced or re-insourced, a new market solution may appear (particularly in software) that better addresses one facet of the contracted service.

Vendor management therefore includes the following goals:

  1. Agreeing a rolling strategic action plan with the Global Mobility vendor, clearly separated from basic service metrics, to keep improving and re-shaping the Vendor service
  2. Reviewing a small number of strategic Key Performance Indicators and adapting these metrics over time,
  3. Ensuring that the vendor’s senior management are responsive,
  4. Preserving a “Plan B” option under which competitor vendors understand the Customer and regularly suggest ways of improving services.
  5. Underlying these tasks, vendor management requires a good understanding of the Customer’s latest and future Global Mobility needs.

It can be hard to meet these five goals amid other, more urgent tasks. Service escalations and supplier software glitches are certainly more pressing. For a Global Mobility team or Vendor Manager, there are always invoices to challenge, internal customer surveys to run and budgets to be approved. One vendor transition hardly seems to be finished before another begins. The suggestions below will perhaps help Customers to identify a small number of meaningful priorities.

Recommendations for the Rolling Strategic Plan and for strategic KPI’s

  1. Rolling strategic plan

A strategic plan is not a ten-page document, nor is it a glossy brochure containing photos and logos. A strategic account plan can be a two-page spreadsheet. But it does contain evolving goals for service improvements, which are separate from operational KPI’s (see 2. below). A strategic account plan can, for example, be divided into two sections:

A. Program management i.e.: continuous improvement of recurring services

B. Account Management i.e.: service organization and value-add

Both these sections contain agreed improvements that will be tracked and discussed each Quarter, as well as a menu of possible improvement areas that the Customer can prioritize in discussions for the next period.

Exhibit A: Quarterly goal-setting form – recurring services

Program management: Improvements to operational performance

Content

Three to four priorities for the immediate period (for example, the current year), with actions agreed for each Quarter. This can include goals such as Assignee satisfaction, Cost reduction, Policy governance, Reporting and data.

Example metrics

  • Sample goal: Assignee satisfaction, 15% increase in average satisfaction by end 2020, with a response rate of 50%+,
  • Sample goal: Cost, 7% reduction in costs by end 2020 (for example, relocation supply chain costs, reduced tax interest and penalties or improved recovery of tax equalization balances),

Sample goal: Average expense processing time to be reduced by 1 day below SLA target by end Q2 2020

Agreed actions by next Quarterly milestone (V=Vendor, C=Customer) Deadlines
Menu of possible priorities that can be added during the immediate period or before the next period. Possible ten priorities for an improvement initiative (Customer selects three):
Easy-to-use technology for employees, Employee satisfaction, Price reductions, Pro-active advice and exception management, Real-time move status reporting, Swift escalation & resolution, Higher-quality supplier network, Data quality, zero-error invoicing, Expense management cycle time & accuracy, Choice and competition for each service (RMC specific)

Exhibit B: Quarterly goal-setting form – Account management

Account management: Focuses on the vendor’s consulting and value-add

Content

Three to four priorities for the immediate period (for example, the current year), with actions agreed for each Quarter. This can include goals such as:

Vendor truly provides a single point of contact into their organization (Account Managers should be visible, experienced and knowledgeable about Customer’s business and Vendor’s services)

Vendor provides helpful and timely expertise (The Vendor should swiftly bring global knowledge and practical experience to help advise Customer on a complex move, refine a policy or plan for new or growing populations)

Vendor has the scale to service all the orders and requests (Vendor should rapidly assign qualified resources to handle urgent needs, including rapidly growing populations, new destinations and significant group moves)

Vendor should submit competitive, transparent and realistic prices (Vendor quotations should be timely, understandable and reasonable).

Example metrics

Sample goal: Account Manager receives score of 4/6 in six-monthly Customer questionnaire.

Sample goal: Vendor to establish Regional Account Managers in Hubs X, Y, Z with required skills and GM knowledge

Sample goal: Vendor to add following skills to central team – Tax Manager with consulting and payroll experience.

Sample goal: Vendor to adopt new format for price quotes as defined by procurement; e-approval system to be implemented.

Agreed actions by next Quarterly milestone (V=Vendor, C=Customer) Deadlines
Menu of possible priorities that can be added during the immediate period or before the next period. Possible ten priorities for an improvement initiative (Customer selects three):

Service model transformation, Ease of doing business (with Vendor), Actionable reporting, dashboards and business-relevant data, Assignee experience, Resources in key locations, Compliance, Cost reduction (offshore coordination activities…), Integration with other Vendors (process, tools, data), Scope review (removing non-useful service items, providing additional options or choice to Assignees …), Improve customer cash flows

Exhibits A and B illustrate one way to create a cycle of continuous improvement between Customer and Vendor. Goals are dynamic, highly relevant and focused on the Customer’s strategic mobility goals; the format promotes a dialogue in true partnership style; the topics help to clarify the Customer’s thinking; a failure to meet Customer expectations will rarely come as a surprise to the Vendor. The template is not bureaucratic and leaves time for actual planning and discussion. Ideally, the Customer will be able to look back after two or three years and confirm a distinct increase in value delivered by the Vendor. The increase in value will exceed the original contracted performance – as it should, because the Customer has not stayed still.

  1. Vendor Key Performance Indicators (KPI’s)

Business Customers and Assignees require a responsive, seamless, compliant service at reasonable cost. In addition to recurring services, there may be Advisory services. Advisory services may be in high demand, to advise and trouble-shoot individual mobility cases. Such advice must be actionable, meaning that it must be timely, must answer the business issue directly, must combine all relevant technical fields and must draw on the practical experience of the Global Mobility team and their vendors. So, Vendors must be both efficient and consultative.

Vendor KPI’s may first be selected by assessing what performance is important for the success of the Customer’s Global Mobility team. A good Vendor should know how to free up the Customer’s time, how to accelerate the Global Mobility function’s service, how to swiftly put together expert advice and how to run a solid, compliant process to satisfy Assignees – in all markets where the Customer is or will be present. Depending on the Customer, some of the following service elements may require a KPI:

A. Assignee satisfaction

B. Account Manager satisfaction

C. Service escalations / speed of actual resolution

D. Compliance and risk management

E. Costs compared to budget.

There is sometimes a confusion between KPI’s and the Vendor’s own internal operational metrics. For example, speed of service is not necessarily a useful KPI, even though Global Mobility KPI’s frequently do include the time within which a Vendor contacts Assignees, or prepares a Tax return, or manages a claim. The fact that a Vendor delivers a service with 95% timeliness does not mean that the service was high-quality, useful or timely. Efficient vendors will track those metrics internally and some of those metrics must appear in the Service Level Agreement. But those metrics generate thousands of data points which Customers should not be expected to review. At most, Customers may expect to review summary deviation reports and sanction Vendors who do not respect the SLA. Customers may also conduct audits of that data at their discretion. Instead, meaningful KPI’s measure the “What” – the result – and not the “How”: for example, how useful was a briefing meeting for the Assignee. This type of result orientated KPI also frees time for Customers to focus on understanding the root cause of service defects, fairly allocating responsibility and discussing remedies, rather than reviewing extensive reports about cycle times.

A. Assignee satisfaction:

  • A good practice is to require all Vendors to use the same satisfaction questions in their survey questionnaires, aligned to the Global Mobility team’s own Assignee experience objectives. When Vendors are used extensively, satisfaction with the Global Mobility program may be the sum of Assignee satisfaction created by the Vendors. Therefore, using the same questions across Vendors allows the Vendor Manager to break down total satisfaction and identify weak links in the chain.
  • All Vendors should measure each individual Assignee’s satisfaction with Home and Host service as a whole, not separately. This particularly applies to tax firms, which tend to issue separate satisfaction questionnaires in home and host countries. Some Customers may want to issue specific questionnaires to senior executives and hold Vendors to an additional overall satisfaction KPI for this population. In addition, response rate should be part of the KPI.
  • Generally, it is a mistake to prevent Vendors from measuring satisfaction themselves. This is unfair to Vendors, because the results from the Customer’s internal surveys tend to suffer from significant time lags and are difficult to interpret. These disadvantages often outweigh the danger of “survey fatigue” from multiple Vendor questionnaires. In any case, good Vendors increasingly use quick, easy to use survey methods and even airport-style “smiley” surveys. The only exception to this concern is Customers who have access to a real-time survey tool or external survey call center with a high take-up rate.
  • Take-up rate or response rate should be part of the KPI (with a minimum response rate of 50%).

B. Account Manager satisfaction (i.e.: Global Mobility team’s satisfaction with the Vendor)

An efficient way to measure this KPI is to require each of the Vendor’s main contacts at the Customer organization to respond regularly to a simple twenty-minute questionnaire. The responses to each question can be consolidated, blended and anonymized, if preferred. A typical questionnaire, using five “radio buttons” from “Never” through “Always” will measure performance using 15 – 20 questions over three service elements:

  • Operational Management (sample question, ”Is a true single point of contact to me, always taking ownership”)
  • Knowledge and expertise (sample question, “Knows which solutions are relevant and usable for us”)
  • Value-Add (sample question, “Helps me define objectives for (Vendor name) that support my own goals”).

C. Service escalation / speed of resolution

A good way to manage this metric is to use a complaints log. This simple form categorizes complaint types for later analysis. Customer and Vendor jointly validate if the complaint is real, assign a gravity level and agree root cause fault. KPI’s measure the speed of resolution and the rate of such agreed defects, if they are the vendor’s fault. An additional metric will set the Customer’s tolerance for the percentage of complaints that come as a surprise, without prior warning from the Vendor. This log format promotes the learning of lessons and continuous improvement, based on the analysis that the vendor manager performs on the log.

D. Compliance and risk management

This category of KPI includes Relocation expenses paid in-line with policy as well as rate of payroll errors and (for Tax providers) maximum tolerated interest and penalties. The KPI for this category will typically be much more demanding than in the Customer satisfaction categories (for example, Expatriate Payroll: tax impact of error must be less than 5% of reportable income / deduction item).

E. Costs compared to budget

This KPI refers to service elements such as Relocation cost overruns for each individual assignment, actual recovery of Tax Equalization balances and exclusive use of pre-approval processes for out-of-scope services.

The role of penalties and incentives

The use of penalties and incentives in a vendor relationship may sometimes be mandated by the Customer’s procurement policies. Generally, penalties combined with incentives are far more effective than penalties alone. Incentives provide a reason for vendors to out-perform, which strategically will help the Global Mobility team to provide a distinctive service. Penalties used alone may cause Vendors to perform to the status quo: service becomes complacent and energy is diverted into tracking and avoidance rather than delivering. In some service elements, incentives are critical: examples include outsourcing the management of company-owned / rented apartments (there must be an incentive to maximize occupancy) or servicing a key Assignee population (there must be an incentive to achieve a superior Assignee Experience). Lastly, use of penalties alone requires especially careful drafting of KPI’s: issues to watch out for include medical insurance firms that “freeze” the claim processing time on rather artificial grounds or even local offices of the large federated vendors that input both process start and process end dates all together on the day that they finish the task – leading to perfect scores!

Summing up

In Global Mobility, the ultimate sanction against a Vendor is contract termination. Transition burden does not prevent most dissatisfied Customers from switching suppliers, even though an RFP and vendor switch can represent six to twelve month’s effort from start to finish. After all, most Customers have become accustomed to great change in their own organizations. Yet, faced with a limited market of undifferentiated Vendors, it is rational to consider if changing Vendors would solve the problem. Active Vendor management can help to avoid this predicament, by continually challenging and improving the offering of the Customer’s current Vendors. These are value-added tasks for a Vendor Manager, over and above the administration of performance metrics. Those metrics, in turn, can be limited and focused on achieving and improving metrics that actually tie into the Global Mobility objectives of the organization – the “What” rather than the “How” or the “When”.