From One Service to Many: The Evolution of Pricing in the Relocation Management Industry

The average cost of a U.S. domestic permanent transfer is $85,466for homeowners and $33,532 for renters, and significantly in excess of that for international relocations, according to 2022 WERC data. Thus, approximately 88% of companies with significant global mobility programs outsource to a third-party relocation management company (RMC). Within these programs, the sale of an employee's home is the most commonly outsourced element of the relocation function (90% of companies outsource home sales today).

Since its inception in 1962 when the first RMC was formed, the corporate relocation industry has undergone a series of evolutions in response to shifting economics, global events, and alignment to corporate client priorities. The industry we know today initially centered around home sale in the U.S. with a fee-for-service model, and from there naturally grew to include international mobility, additional relocation-related services, and partnerships with global supply chains. This growth introduced zero-fee programs.

As the role of the RMC expanded, cost-saving strategies for the corporate client sprung up to include referral fees, rebates, and partnership bonuses. This reflected the dynamic nature and complexity of corporate relocation management and adaptation to market and economic conditions.

Recent developments affecting the U.S. real estate industry point to the necessity for RMCs to once again adapt their business models to ensure compliance with recent legislation and reduce litigation exposure, as well as enhance revenue transparency for the client in a new age. For clients, this transformation could bring heightened predictability in their relocation spend. This whitepaper summarizes the global mobility industry's evolution.