Issuing a Request for Proposal, (RFP) for relocation services is a significant investment for any organization. It is crucial to understand that issuing an RFP is not just about evaluating Relocation Management Companies (RMCs) but also about the time, effort, and resources to manage the process effectively.
Cost considerations can vary depending on several factors, but direct and indirect costs are generally involved.
These costs stem from the time, resources, and effort required to manage the RFP process. Below are some key considerations in issuing an RFP for relocation services, followed by examples of associated costs and how this investment can lead to long-term benefits for your company.
6 Key Considerations include:
- Internal Resources and Time Commitment
- RMC Selection Process
- RFP Preparation and Administration
- RMC Proposal Evaluation
- Estimated RFP Process Cost
- Other Cost Considerations
(Opportunity Costs, Consulting or External Expertise Fees, and Software/Tools)
1) Internal Resources and Time Commitment
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- Personnel Involvement: The RFP process often requires input from HR/mobility, finance, legal, and procurement departments. Each department may need to review proposals, assess the RMC’s capabilities, and coordinate meetings. Depending on your organization’s structure, this can be a resource-intensive process.
- Time Investment: The process typically takes several months, depending on the complexity of your relocation program, the staff’s schedules, and the number of proposals received.
2) RMC Selection Process
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- Evaluation: Companies must establish criteria to assess RMCs’ capability of managing their programs, including service offerings, reputation, and past performance. Some organizations do this through a formal Request for Information process.
3) RFP Preparation and Administration
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- Document Drafting and Design: Preparing the RFP requires a comprehensive understanding of your company’s relocation program needs and may include the help of specialized consultants or internal subject-matter experts.
- Reviewing and Responding to RMC Questions: Clarification questions are part of the RFP process. Upon receipt of the questions from potential RMCs, the company will consult with relevant internal teams and/or subject-matter experts to craft the responses.
4) RMC Proposal Evaluation
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- Time spent reviewing proposals: Reviewing multiple RMC proposals requires time and careful consideration. This is especially true if numerous individuals are involved in the review process. Organizations may allocate time from various departments, including HR/Mobility Managers, Procurement Officers, and finance experts
- RMC Presentation Costs: In most cases, shortlisted RMCs are invited to present their proposals in person or via virtual meetings. Cost considerations include time spent by internal resources planning and attending the presentation. This includes follow-up discussions.
- Contract Negotiation: Once the RMC is selected, a detailed contract negotiation occurs, which may involve legal counsel reviewing terms and conditions.
5) Estimated Process Cost
While the cost of the RFP process can vary, companies should be prepared for an investment of anywhere between $30,000 – $40,000 (or more), depending on the scope and complexity of the relocation program being outsourced, the level of internal resource involvement, consultants/advisors involved, and any 3rd party procurement platforms used. For smaller companies with fewer relocations, the cost may be lower. Larger organizations with a high volume of moves may see higher costs due to more complex programs, detailed evaluations, and vendor negotiations.
Cost Example
Below is an example of how RFP costs might break down for a typical relocation RFP for a mid-sized global organization with 100 relocations per year. The costs can be higher for more extensive programs, depending on loaded salary costs, the number of people involved, program complexity, and scale (U.S. Domestic, International, Global).
6) Other Cost Considerations:
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- Opportunity Costs: While more challenging to quantify, the company should also consider the opportunity cost of dedicating resources to the RFP process. During the time spent managing the RFP, these resources may not be available to focus on other vital projects, such as supporting ongoing employee relocation efforts or other core business operations.
- Consulting or External Expertise Fees: In some cases, companies may hire external consultants or experts to assist with drafting the RFP, evaluating proposals, or providing industry insights. This can add additional costs to the process, ranging from a few thousand dollars to tens of thousands, depending on the level of support required.
- Software & Tools: If the company chooses to utilize software or platforms to help streamline the RFP process (such as automated RFP platforms, vendor management systems, or third-party procurement tools), there may be additional subscription fees or costs associated with these tools. Depending on the platform, these costs can range from hundreds to several thousand dollars.
Issuing an RFP for relocation services can be a substantial financial and time investment for a company.
However, the benefits often far outweigh the costs when the process is conducted strategically by investing the time to evaluate multiple providers and choosing a partner that offers value, high-quality services, long-term flexibility, and better alignment with your company’s needs.
These savings, combined with improved employee satisfaction and retention, can yield a significant return on investment, particularly as your relocation program scales over time.
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