1 Veeco Relocation Program November 1 st, 2004. 2 Overview Initial Objective Areas of Opportunity...
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Transcript of 1 Veeco Relocation Program November 1 st, 2004. 2 Overview Initial Objective Areas of Opportunity...
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Veeco Relocation Program
November 1st, 2004
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Overview
• Initial Objective• Areas of Opportunity• Benchmark Data• New Objective• Proposed Relocation Program• Estimated Cost Savings• Next Steps
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Initial Objective
• To find a New Moving Van Line Company & Agent which provides better customer service and competitive pricing.
• Why?• Veeco outgrew current agent• Too many complaints / issues from new
employees / transferees
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Areas of Opportunity • Relocation Policy vs. “True” Program• Monitor, Control and Reduce Relocation &
Recruitment Costs• Not Employee Focused• Lack Expertise• Various Point of Contacts
• HR, Moving Co., Relocation Co., Payroll, Mtg Co., Tax Dept, etc.
• We want our employees focused on their new role and not worried about their relocation
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Benchmark DataComponent Current Veeco Policy ERC Runzheimer
Tiered Policies - Two TiersHome Owners: same for all levelsRenters
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52% of organizations use tiered approachThree Tiers is most common72% use grade or salary level for criteria
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66% of organizations use tiered approachTwo or more is most commonMost common tiers job level, homeowner
Home Sales Assistance
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Direct reimbursement to typical expensesSelling commission cost excluded from policy cap for homeowners
- 70% of companies surveyed use a third party company; 13 % uses an in-house program and 9% by direct reimbursement
- 85% reimburse some of all costs to sell home
New Home Purchase Assistance
- Covers typical fees incurred - 90% cover normal closing costs - Reimbursement of normal closing costs remains constant
Rental Assistance - Up to three months' rent for ease cancellation charges
- Generally two months' rent for lease cancellation fees
- Not surveyed
Temporary Housing
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Up to 60 daysOne Trip home every two weeks
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97% provide assistanceAvg. Length of time is 57 days for employees / 50 days for familiesTwo trips per month commonly allowed
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83% provide assistanceAvg. length of time is 54 days
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New Objective• To find a Full Service Relocation partner which
provides better customer service and innovative products to reduce our total spend while increasing employee benefits and program delivery.
• Why?• Veeco outgrew current agent• Too many complaints / issues from new employees /
transferees• Employee Satisfaction• Reduce Expenses• Create consistency across all Veeco business units• Vendor accountability for full process
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New Objective - Full Service Program
ExpenseAdministration
Cost Savings
Technology
Flexibility(Tiered Program)
DestinationServices
Move Management /Moving Services
Home Purchase /Home Sale
One Point of ContactRelo Counselor
Employee FocusedAnd Dedicated
“Soup to Nuts”Relocation Program
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The Relocation Company• SIRVA Relocation
• The world’s largest global moving and relocation services company
• Publicly traded company listed on NYSE (SIR)• In excess of $2.3 billion in revenue• Over 7,700 employees in 46 countries across 4
continents• Six Sigma Initiatives – 50+ black belts• Operating Network in over 148 countries• Over 5,000 corporate clients around the world• Moving Services, Relocation Services,
Insurance Services
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Customer Dashboard - Sample
Measure-Customer Driven CTQ’s
Analyze-Factors Affect Key Measurements(Critical X’s)
Improve-Processes Internally
Control-Dashboards, Controls Charts, Early & Often
From Analysis to New Philosophy of Metrics. . .
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Service OverviewTransferee is
offeredrelocation
Client sendsauthorization form
to SIRVA
DestinationSpecialist makes
initial call totransferee
Needs analysis
DestinationSpecialist
arranges pre-decision trip, if
needed
DestinationSpecialist
arranges face-to-face homefinding
Pre-decision tripTransferee
acceptsrelocation?
Final billing sent toClientNO
RelocationCounselor calls
transferee todiscuss relocation
Additional needsanalysis/Q&A re:home marketing,
destinationservices
Transferee givesappraiser choices
to SIRVA
Transfereereceives pre-
decision materials
Transfereereceives auth.
package
Transfereecooperates with
brokers conductingBMAs & anyinspectors
DestinationSpecialistarranges
homefinding trip(s)
RelocationCounselor calls T
with brokerrecommendations
Transferee selectsbroker from SIRVArecommendations
Transferee,broker, & personal
move managerdevelop marketing
plan
SIRVA makesguaranteed offeron transferee's
home7
Outside buyerfound?
YES
Offeraccepted?
Transfereeforwards offer topersonal move
manager
Transfereenegotiates withbuyer (SIRVA'
assistance)
SIRVA makesoffer to transferee
that matchesbuyer's
Transfereeaccepts SIRVA'
offer
SIRVA listsproperty; closes
with outside buyer
YES
Transfereemarkets home on
his or her ownNO
Transferee signsContract of Saleand sends it to
SIRVA
Transferee sellshome to SIRVA; isfinished with home
sale process
YES
SIRVA sends finalreconciliation to
Client
Transferee selectshomefinding
broker from SIRVArecommendations
Homefinding trip(s) Home found?SIRVA assiststransferee with
offer negotiations
SIRVA assists withtemporary living
accommodations
YES
NO
SIRVA stays incontact with
transferee throughclosing
SIRVA sends finalreconciliation to
Client
Transfereecooperates with
appraisers
Transfereemarkets home toattempt to find an
outside buyer
NO
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Two Tiered Program OptionsFixed BVO• Veeco pays 9.80% of home sale
price.• All standard and customary home
sale closing costs included• Eliminate the need to gross up the
employee’s home sale costs• No Guaranteed Buyout offered
• Outside buyer needed • If home sale falls through or goes to
inventory, Veeco is not responsible for loss on resale, cost of carrying the home, etc
• Closing Costs on New Home Purchase Included
• Expense Administration, Reimbursement & year end tax reporting ($300 per person)• SIRVA reimburses expenses to
the employee and supply chain per policy then bills Veeco
Flex Fee 60/90 • Veeco pays 11.85% of home sale
price.• All standard and customary home
sale closing costs included• Eliminate the need to gross up the
employee’s home sale costs• Employee offered a guaranteed
buyout on day 90 of marketing period from SIRVA.• No outside buyer needed• Sale Price is based on
average of two appraisals • SIRVA not Veeco takes title on
purchase• Closing Costs on New Home
Purchase Included• Expense Administration,
Reimbursement & year end tax reporting ($300 per person)• SIRVA reimburses expenses to
the employee and supply chain per policy then bills Veeco
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Cost Analysis SIRVA
Based on a home sale followed by Current Fixed BVO Flex Feea home purchase by a single individual Veeco Policy (UnBuyout) (60/90)
Sales Price of Home: $340,000 340,000.00 340,000.00Shared Service Fee 9.80% 11.85%Related Commissions/Closing Costs: $21,501 21,501.00 33,320.00 40,290.00
Federal Withholding 28% 10,589.76 0.00 0.00State Withholding 7.5% 2,836.54 0.00 0.00Medicare Withholding 1.45% 548.40 0.00 0.00FICA Withholding 6.2% 2,344.88 0.00 0.00
Grossed Up Amount - Home Sale 37,820.58 33,320.00 40,290.00
Purchase Price of Home: $629,000Related Purchase Costs: $12,529.16 12,529.16 0.00 0.00
Federal Withholding 30.38% 6,988.83 Included in Included in Federal Withholding 28% 0.00 fee above fee aboveState Withholding 7.5% 1,725.22 Medicare Withholding 1.45% 333.54FICA Withholding 6.2% 1,426.18
Grossed Up Amount - Home Purchase 23,002.93 0.00 0.00
Overall Cost
Van Line Cost 15,127.00 13,614.00 13,614.00
Total Original Cost 34,030.16 33,320.00 40,290.00Total Gross Up Cost 26,793.35 0.00 0.00Expense Administration Fee 0.00 300.00 300.00
Total Cost to Veeco 75,950.51 47,234.00 54,204.00
Increase/(Decrease) in Veeco Cost 0.00 (28,716.51) (21,746.51)
Percentage Increase Charged to P&L 154.51%
Estimated Annual Relos by Veeco = 30Annual (Savings)/Additional Cost (861,495.30) (652,395.30)
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Estimated Savings
$0$200,000$400,000$600,000$800,000
$1,000,000$1,200,000$1,400,000
Tier IITier I
Tier II $287,160 $430,740 $574,320 $717,900 Tier I $217,460 $326,190 $434,920 $543,650
10 Relo's per Tier
15 Relo's per Tier
20 Relo's per Tier
25 Relo's per Tier
: this annual savings has an EPS impact1 of ~1.6 ¢ EPS annually 1-($750K savings *.65% effective after tax rate) / 30.2M shares outstanding as reported
in Q204 financials
$504,620
$756,930
$1,009,240
$1,261,550
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Next Steps
Next Steps Status / Timeline
Conduct Reference Checks on Sirva Completed
Meet with Executive Management 15-Oct-04
Greg Robbins to Review Contract Agreement Week of October 18th
Hold Implementation Meeting with Corporate HR / Finance Team and Sirva Management
22-Oct-04
Conference Call with General Managers & HR Team to Review Program
1-Nov-04
Facilitate Conference Call with Business Unit HR Team and Sirva Management
Week of 11/8/2004
Implement New Relocation Program 15-Nov-04 / 30-Nov-04