Case Study

What can we learn from exceptions?

Effective management of exceptions allows businesses to facilitate a more seamless transition for employees, while also ensuring costs are kept in check and policies are consistently followed. One Weichert client was keen to understand how their performance – i.e. ratio of exception spend to total spend – stacked up to other companies.

Performance metrics showed that in the prior year, exceptions represented 1.9% of total spend. Feeling confident that their Weichert team implemented processes to audit and manage exception requests, the next step was to analyze their data against other companies. We understood that they wanted to look a bit deeper at where they ranked, the factors  influencing their exception rate, and any improvement opportunities.

The Solution:

Weichert’s Advisory Services used a 360-degree approach to benchmarking for this request:

1. We conducted a targeted research effort, looking at our client portfolio to curate a list that mirrored their size and scope of program. We examined the exception activity of companies with similar spend, policy scope and geographic dispersal of move volume that aligned most closely with the The final list contained ten world class companies.
2. We looked at secondary research for any data and trends in the mobility industry that may impact the rate of exceptions now or in the future.
3. We reached out to our Client Services teams for further insight behind the data and governance of the exceptions among companies in the benchmark.

We analyzed each client’s total annual program, their exception spend, satisfaction rates, and year-over-year trend analysis.

The Findings:

Through our benchmarking analysis of ten companies, we confirmed that the client’s exception rate of 1.9% is performing  better than or equal to three of the peer companies, and above the remaining seven.

The numbers were just one part of the story, so we also inquired with the Weichert Client Service teams for each of these companies to obtain further insight into the results.  In the process, we uncovered some interesting commonalities. The teams for the companies with the very lowest rates cited both company culture and astute counseling and account governance as key to their favorable rates.

Our secondary research supports the client’s performance metric as lower than average. Just a reminder, when it comes to exception rates, “lower than average” is good! There is limited industry data published on the exception process, however, we found that the rate of exceptions in fully outsourced global programs is typically 2-3%, and between 5 and 10% is average across all programs according to Worldwide ERC.[1] Exception rates will differ, and in our review of processes of global programs with various structures, the rates will differ to reflect the variety of policies, scope of benefits, company culture, and program governance.

Other notable observations that were important to the client:

• The simple act of effectively setting expectations is powerful. Those companies with the very lowest rates have a near “zero-tolerance” approach which is communicated to transferees up front, and reinforced through policy language and governance process to virtually eliminate the situations that lead to exception requests.
• Sometimes flexibility is the answer. Weichert’s Client Services teams cited the implementation of core-flex programs as a reason for low rate of exception requests, with one reducing exceptions by an astonishing 85% in their first full year of their core-flex program’s use.
• “No” isn’t always a bad word. Ready for a surprise? The companies with the lowest rates of exception reported some of the highest employee satisfaction rates, even with their conservative approach. In fact, the company referenced above that reduced their exception spend by 85% also achieved a substantial INCREASE in their employee Net Promoter Score of their program during that same period.

We also found that across all clients regardless of exception rate rankings, the primary nature of exceptions was in temporary living extensions and household goods storage and related charges; categories that have been consistently highest over the last four years reflecting the effects of widespread housing shortages and shipping delays in the mobility process. These were the top two areas for the client as well, which gave them further confidence that they were not experiencing anything particularly unusual in their program.

The Outlook:

A common myth in the mobility industry is that when it comes to policy exceptions, the goal is to achieve an exception rate of 0%. This client understands that life happens, especially when you’re moving! The study confirmed that all the other companies deal with exceptions, with similar patterns, and that their rate was well within a normal range. After receiving the results of the study, they have a greater comfort level with their metrics, and we’ve worked with them to develop some new strategies and techniques that are being applied towards continuous improvement in this key program metric.

The Bottom Line:

Even when the performance metrics indicate positive ratings and they have effective processes in place, Weichert is able to research client patterns and data for continuous opportunities for improvements. We’re committed to finding solutions and using our technology to improve the client and employee experience.

[1] 2018 Worldwide ERC’s most recent statistic on Exception rates.