There is a paradox in the way most relocation management companies (RMC’s) earn money for their services that makes it difficult to align the RMC’s goals with their client’s goals. It’s a giant elephant in the room for the relocation industry and to understand why, we have to go back to the 1980’s.

In the early days of the relocation industry, employers paid their relocation partner a fee to administer a tax protected home sale program and all costs of services were passed through with no upcharge. Very much like you would expect for a consultative service company. Fees for professional services.

In the 1990’s the industry evolved. Competition grew and relocation companies were forced to drop their fees. Employers thought this was great – no fees are good, right? Well, not always. Relocation companies still had to make money. Gradually fees were replaced by commissions and rebates added to the services managed. With every dollar that an employer spent on things like furnished housing or moving household goods, a percentage went to the relocation company.

The ugly news is that adding commissions and rebates to supplier costs now INCREASES your tax bill. And the more these services cost, the more an RMC earns!

And that’s how we arrived where we are today. RMC’s tout zero or minimal service fees, with their actual service cost buried in pass-through invoice amounts. Supplier rebates received by the RMC are not disclosed and difficult to identify even if a client knew to look.