Gaining Competitive Advantage in the Global Marketplace
"Everybody has accepted by now that change is unavoidable. But that still implies that change is like death and taxes - it should be postponed as long as possible, and no change would be vastly preferable. But in a period of upheaval, such as the one we are living in, change is the norm." --Business management guru, Peter F. Drucker
The global, dynamic marketplace and a mobile workforce require successful companies to embrace change to seize new opportunities. Supporting transitions and managing costs are increasingly imperative business strategies.
According to a recent Ernst & Young survey of senior executives, "Gaining Competitive Advantage: The Procurement Opportunity," the biggest impact on the procurement functions in organizations over the next two years will come from pricing pressures and attracting the right talent. The survey highlights that organizations are most concerned about the ability to manage change effectively. The challenge of supporting these transitions and controlling costs is even more complex today with the recent economic turmoil and pressure in credit markets.
The survey reports that despite an understanding of the key challenges ahead, many executives do not have confidence in the ability of their company's procurement function to tackle and manage the challenges. Yet, there is broad agreement that those organizations that successfully align procurement strategies with corporate objectives will obtain true operating cost savings and create a significant competitive advantage and enhanced shareholder value.
CORT, a Berkshire Hathaway company, works with 80 percent of the Fortune 500 to support strategic transitions. As a business partner, CORT helps businesses rapidly deploy employees, establish offices in new locations, contain costs and ultimately, build a competitive advantage. For more than 35 years, CORT has been instrumental in the start-up of thousands of new businesses and in the rapid deployment of key talent by providing residential and office furniture on both a rent-to-rent and just-in-time basis across the United States. More recently, CORT has established a global network of furniture rental partners in more than 50 countries to support the immediate needs of companies and employees around the world. To provide additional support for workforce transitions for companies and their employees, CORT launched a broad range of relocation services in 2006. Today, CORT's deployment and destination services support companies and employees throughout the United States.
Companies seizing new business opportunities in the global marketplace rely on their ability to rapidly recruit and deploy employees and project teams. Failed deployments are costly, and few experiences can be more stressful for an employee and family than relocating to a new city or country.
More than 1.5 million workers relocate for their jobs each year, a number that continues to rise with the expansion of the global enterprise, growing international business relationships and a multicultural workforce. Yet finding and retaining the best employees is more challenging today than ever before.
Demographic trends are working against companies in the "talent war." Older working populations are shrinking as the baby-boomer generation reaches retirement, and generational attitudes toward work are evolving as well. Engagement and loyalty are declining, and more employees are willing to change companies when they believe that their company is not taking care of them.
Economic and societal changes are driving a preference to rent rather than purchase a home. The continuing instability in the housing market makes many employees unwilling or unable to relocate as they struggle to sell their homes or secure employment for their spouse. The high cost of housing makes purchasing a home impractical for many young employees earning an entry-level salary, and home ownership inhibits the mobile lifestyle many young employees prefer. In response to these trends, CORT is leading the way to meeting these changing needs by targeting their services to this upwardly mobile population.
With the increasing number of temporary international relocation and the shift from long-term to more short-term assignments of less than 14 months, many companies are tapping CORT's global furniture network and wide range of deployment and destination services in the United States to contain costs and ease the stress for employees and families in transition.
In the United States, which remains the top destination for international assignments, CORT offers the nation's most comprehensive range of destination services that include fulfillment of hotels, apartments, corporate housing, single-family home rentals, destination touring services,
utility services, renter's insurance, car rental, job search assistance for spouses and much more. The most prevalent reason for failed international assignment is the difficulty for employees and families to adjust to their new locations. Considering that more than half of people relocating for a job and more than 90 percent of those on temporary assignment will choose to rent, companies choose to work with CORT because they know their employees will become productive more quickly by finding a suitable place to live and getting settled into their community faster. Employees are ready to focus on work from their first day on the job.
In addition to help in finding a home or apartment, one of CORT's most rapidly growing destination services is local-market tours, offered virtually everywhere in the country. Area orientation tours help employees and their dependents become familiar with their new communities, including assistance with choosing ideal locations for homes and apartments from a local market expert.
In addition to area tours, CORT's destination services include "settling-in" neighborhood orientation services such as providing school and church information and assistance obtaining a driver's license and other documentation for international transferees.
Companies invest thousands of dollars and many hours of time to recruit and hire a new employee who is the right fit for the job. Today, many companies are also investing to foster confidence that the company and the community are the right fit for the employee.
Providing "pre-decision" tours during the recruitment process helps employees and families become more comfortable with a decision to relocate.
According to Gallup research conducted over the past thirty years, an employee's sense of connection to their organization or senior management consistently ranks in the top five indicators of their longevity with that company. One of the most important factors in fostering strong connections with an organization is establishing an affiliation with the community.
Supporting a transition with an area tour helps foster a feeling of loyalty to the company and belonging in the community while enabling the employee to quickly get settled and focused on their new job.
With the increasing number of temporary international relocation for the globally mobile workforce and the shift from long-term to short-term assignments, many companies and their employees are considering furniture rental as a cost-efficient and convenient alternative to the transportation of household goods. This shift in assignments, coupled with furniture rental, eases the relocation stress for employees and families in transition and provides an alternative to the high cost of shipping furniture to support temporary assignments.
Renting furniture can eliminate the need for temporary living in both the departure or destination location, which eases and accelerates the transition into a new home and location. Families can settle into their new homes right away and immediately be more productive in their new job. Even in the case of longer-term temporary assignments, furniture rental can be advantageous compared with the costly shipment of household goods.
CORT has a global network of furniture rental partners in 50 countries. In 2008, Roomservice by CORT was established in the United Kingdom to provide furniture rental services to companies establishing new offices and as an alternative to moving household goods for relocating employees in one of the world's leading and fastest growing business centers.
To accommodate flexibility and the mobile lifestyle of employees, companies are providing more flexible working environments for employees when they arrive. Instead of conventional office cubicles, "alternative officing" trends include telecommuting, fl ex hours, home offices and "hoteling" for on-demand office space to support people who visit the office periodically.
Renting furniture from CORT allows companies to conserve capital for other business expenses that produce profi ts and a return on investment, and offers the flexibility for companies to respond to actual usage, including employee turnover and shifts in department tasks.
Over time, companies realize that the significant financial investment to buy furniture is not in the front-end purchase cost. Instead, it is the back-end cost of storing and managing furniture assets. Industry surveys report that too many companies use off-site storage for offi ce furniture, accumulating costs for storage space as well as salaries and time required for employees to manage the space. In many cases, these costs and substantial depreciation expenses are incurred for furniture that they are unlikely to re-use. CORT makes it easy to add or subtract furniture as needed, providing "on-demand" furniture that is delivered and removed as business requirements change.CORT also provides a valuable resource for companies to respond to a crisis or disruption due to a disaster. Disaster plans help companies establish a protocol for communicating with employees in the event of a disaster. Planning must include how to contact employees as well as short-term and long-term contingency planning, including establishing temporary office space and ensuring that employees and their families have a place to stay. CORT can quickly outfit alternative office sites, maintain an inventory of office furniture and, if needed, help employees and families find temporary lodging, enabling an organization to quickly restore business functions.
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