Relocation, relocation, relocation

London Gherkin Swiss Re Tower

London: towering costs

Handled correctly, relocation is a major opportunity for an organisation to
change its culture, streamline its operations and build its brand. Large
organisations will have property directors or facilities managers with expertise
and extensive experience in handling relocations. But smaller organisations,
especially those growing very fast, will end up dumping responsibility on an
already over-stretched employee who may have little experience. 

The overwhelming priority is to maintain the continuity of the business,
keeping up productivity and customer service levels. ‘Key personnel will be
sitting at their desk surfing the internet looking at properties,’ warns Steve
Holden, managing director of Farthingtons Relocation Services, ‘instead of
focusing on customers.’

The next biggest problem is to come up with a medium-term estimate of the
amount of space needed, as mistakes either way can be costly. Charles Shaw,
managing director of Arlington Property Services, says that many organisations
take an arbitrary decision, such as adding an extra 50%.

‘If it is not enough, in two or three years they will need to find more
space,’ he says, ‘which costs an enormous amount of time and money. On the other
hand, if it is too much, they could end up paying £25/sq ft for several thousand
square feet of surplus for five years, which is a lot of money down the drain.’

Getting the relocation project schedule correct is not to be sniffed at. Neil
Paul, chief executive of business moves at Cadogan Tate, warns that the most
common mistake is to wait until the new lease has been agreed before starting
relocation planning.

‘There are lots of problems and slippages whilst the best lease terms are
negotiated,’ he explains. ‘Once they have signed the lease, people want to make
things happen quickly, but you need to start work at least three months prior to
signing. For example, furniture lead times for desks are often quoted as six
weeks, but in reality it is nearly always six months.’

If more than about 20 people are to be moved, Paul advises appointing a
specialist project manager. ‘Typically the financial director or office manager
is saddled with it on top of their existing job,’ he says, ‘but they are already
over-stretched and their ordinary business could suffer.’

Many moves are fairly local, so there is little need to offer relocation
packages. However, when facilities are being geographically consolidated, such
as after an acquisition, key staff will have to be helped to find a new home and
reimbursed for the cost of relocation. These are tax free up to £8,500, but
Nigel Parslow, managing director of executive search at recruiter Harvey Nash,
says that most relocations cost about £20,000 per employee. He also warns that
if the move is more than 20 miles from a location where there are lots of
alternative employers, the organisation could lose many of its clerical and shop
floor workers.

‘You will need to ensure that you capture the core skills and the
intellectual property of your organisation,’ he advises. ‘Relocation will rarely
be seen as a great career move for the individual, as people primarily look for
remuneration and job security.’

As well as standard removal costs, recruitment consultancy for a spouse can
be important. ‘It is generally the spouse that is the problem,’ says Parslow.
‘Children adapt quickly and make friends in a new school, but in the medium term
spouses will have no social fabric and need longer term career prospects.’

All the experts agree that the biggest opportunity in relocation is the make
positive change. ‘If you relocate and continue to use the same processes and
structures as before you have lost a huge opportunity,’ says Shaw. ‘Relocating
provides the management team with huge opportunities to upgrade the culture,
technology and working practices of the organisation.’

Nick Cook, chief executive officer at Haywards, an independent property and
workplace consultancy, says that departments should break out of their ‘silos’
by seating people according to their place within the workflow. Staff
involvement and motivation can be improved by putting them close to other staff,
offering flexibility in arrival or departure time or allowing them to work from
home. Shaw points out that efficiency improvements could save space, further
cutting the costs of the relocation.

Vodaphone moved 3,000 people from 35 buildings into a seven building campus.
‘We were seeking to move people into a different and more modern working
environment, which is more productive,’ says Richard Lomax, property executive
at Vodafone. The wireless office environment gives employees a choice on how
they work and where they work from. They can roam around the campus as if they
were at their desk.
‘Relocating can change culture, attitude and customer service in a way which
would take years using other methods,’ says Parslow. As Cook points out, it is
not a sunk cost, but an investment in the brand.

The devil is in the detail- how to effect a successful move

• Establish a committee, chaired by a director, with representatives from all
departments, to look at the issues from different perspectives.
• Check insurance cover for goods-in-transit and employer’s liability.
• Check for covenants on leased equipment, especially photocopiers, which do not
travel well.
• Ensure that the contractor is a member of the
Commercial Moving Group of
the British Association of Removers
, which has an arbitration service.

• Regional development agencies are a source of contacts and funds for local
• Ensure that the removal contractor uses properly trained labour, who are
familiar with complex modern desking and IT systems, as well as maintaining
integrity of paper filing systems.
• Dispose of unwanted furniture. Even though the second hand value of almost new
furniture is negligible, storage costs money and is wasted if it is never used
• Get a public relations agency to help promote your business in the new
location. Jobs and investment are good news for the community.
• Throw a party for customers and suppliers to view the new facility and build
the brand.

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