Insights from Talent Mobility's Leading Conference

BAMM is my favorite Talent Mobility event. I consistently learn more in 30 hours at the Hyatt Regency next to the San Francisco airport than at any other time in the year.? The attendees at BAMM are always at the forefront of innovation in Talent Mobility and the conversations are always thought-provoking, exciting, and sometimes uncomfortable.? One thing was clear this year: There’s never been this much change happening in global mobility.? ?

BAMM felt different this year.? There’s always change and experiments going on in our industry. But this year, there’s urgency for change that seems so unavoidable.? Some things I heard discussed.

-????????? High interest rates continuing to impact real estate viscosity and suppress transferee volume

-????????? Change in the role of mobility for both individuals and organizations.? Individuals are more reluctant to move, and organizations are placing a greater emphasis on immigration, tax, and business traveler compliance than traditional relo.

-????????? Most companies supporting the talent mobility industry (quietly) share that they are down 20-40% on volume with mixed reviews for the start of 2024.

-????????? Policies are shifting from managed programs to smaller, flexible, employee driven policies.? I heard about large increases in managed cap policies.? Core Flex is growing, but not as much as anticipated.? Technology capabilities supporting Core Flex have arrived, but policy changes and execution haven’t actualized as rapidly as anticipated.?

-????????? There’s wildly different ideologies in talent right now.? Many companies attending BAMM are operating in a war for talent, wanting to ensure employee retention and good employee experiences. In one session, we heard from about work from (mostly) anywhere policies that weren’t just allowed, but financially supported by the company.? Conversely, the past two years have seen the balance of power swing from the employee to the employer.? ?There are those in Talent Mobility that look at “Duty of Care” as a bug, not a feature.? I spoke with more than one company that doesn’t want the responsibility associated with the noise and problems that occur in mobility.? They didn’t want managed lump sums or to support the transferee beyond the cash. ?For them, mobility functions for immigration and tax compliance, but relo is totally on the employee.

All of these elements are creating downward pressure in our industry…

...but there was one topic at BAMM that was discussed more in supplier conversations that has a huge potential to change our industry - the National Association of Realtors settlement this past week.

Historically, real estate brokers in the US have typically received 6% of the home cost in broker fees, with 3% going to the buyer broker, 3% to the selling broker.? The ruling this past week changes the existing dynamics substantially.? Buyer agents will now need to clarify their fee up front and receive a signature from the transferee prior to showing properties.? It’s also more likely that buyers will negotiate down the overall broker fee at a high frequency. ?There is no doubt brokers and Relocation Management Companies (RMCs) will get creative on how to preserve this revenue, and much of the existing revenue may be retained.? But long term, I think it’s likely that RMCs are a loser in this seismic change.? The real winner from this settlement: big tech.?

Big tech real estate companies are positioned to become the buyer broker for less money. ?They’ll have exceptional user experiences to show the properties, volume, data, and streamlined processes. And as they gain more power in the transaction process, they’ll be able to negotiate and reduce compensation to partners including RMCs.?

Why is this important?? Today, RMCs typically make 70 to 80% of their revenue based upon U.S. domestic home sale referral fees. ?So if the real estate broker fees drop from 6% to levels similar to the next highest major market (Germany at 4.5%) on average, this represents about a 20% drop in overall revenue to RMCs.? That is a tremendous hit, and it’s possible that is optimistic in the long term.? Broker fees in UK and Australia average 1.3% and 2.5% respectively, and while it seems unlikely we’ll end up that low, this shift creates existential challenges.? Coupled with all the other challenges, leaders in our industry are going to be adapting.?

As a result, the next 2 years are a unique time where there is an urgency to change.? Much of that change is going to be utilizing technology better in our industry.? Anywhere tech can drive out costs will be seriously considered.? This is both exciting and terrifying depending on where you sit. ??We saw Joshua Hyatt show his AI relo consultant avatar speaking Japanese using an instance of GPT trained in mobility.? It was exciting, even though today, it’s a mediocre solution.? But with people being the biggest cost driver in companies, and AI improving incredibly rapidly, 5 years from now, the role of a relocation consultant could look very different.

To be clear, I don’t think RMCs or the mobility supply chain are going away.? RMCs have been the best solutions for HR relocating their talent for a reason.? They will adapt to continue to serve the customers they understand better than anyone.? Additionally, customer inertia is strong in our industry and policy changes often take years, so change isn’t going to happen overnight.? But it’s clear we’re at an inflection point… and I’m excited about what the future will bring.?

With all the changes and experiments occurring in our industry today, I’m grateful that BAMM exists to help bring us all together to collaborate, celebrate, and learn from the different perspectives that exist across our industry.? Cheers to the BAMM Board including Jordan Blue , Ferrah McKeown , Brett Sipes , Alejandra Zapatero , Dawn Brandenburg , Morgan Snapp , Jessica B. , Andreas Strohschein, GMS-T , Christina Blondheim , Cata Mayorga, JD , Greg Dummer , and David T. for creating an exceptional environment for collaborative learning, connection, and community.