Report: Relocation companies could cut costs of employee moves

Agencies could save $60 million by contracting with relocation management companies to help with sales of employees' homes rather than directly reimbursing employees for costs, according to a report from an independent consulting firm.

The report, issued last week, was compiled by Raffa, a Washington-based accounting and consulting firm that serves nonprofit organizations, for the Employee Relocation Council. The firm used data provided by the six relocation management companies that help agencies move their employees to produce the report.

Cris Collie, a member of the Governmentwide Relocation Advisory Board and executive vice president of the Employee Relocation Council, analyzed the data in the report and confirmed the savings figure. He also concluded that employees could save an average of $7,358 during a relocation in out-of-pocket costs that usually go toward repairs and mortgage interest, among other expenses.

The report stated that relocation companies handled 5,712 residential transactions in fiscal 2004 for 98 percent of federal agencies. Estimates indicate the government relocated between 18,000 and 22,000 workers last year, but since agencies are not required to track relocations, the exact figure is unknown.

Previous relocation cost analysis reports have been fraught with errors, because agency records are incomplete. The new report bypassed the agencies and went directly to the companies serving agencies to compile the data on home sale transactions.

The Government Relocation Advisory Board, made up of government and private industry representatives, is preparing to recommend changes this summer to federal relocation rules.