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[Updated post] How will the SIRVA and BGRS announcement impact the global mobility industry?

In an announcement that has shocked some in the industry, SIRVA and BGRS have announced their intention to merge. Together they will be the clear market leader by revenues and staff numbers. With similar mergers taking place in recent years including MI Group and Weichert, Teams and SIRVA and the now infamous failed deal between SIRVA and Cartus this signals a clear current trend in the industry.

In reaction to this news, on the same day it was released, The View From The Top broadcast a special edition of the show taking a deep-dive into this huge announcement and exploring what this means for the mobility industry.

In this show Brian Friedman discussed:

The global mega-trends and economic events that are driving the consolidation in our industry including:

    • Private equity coming into our industry e.g. Vialto Partners.
    • The disruption caused to supply chains in recent years through a series of major events including the  pandemic and more recently a new “iron curtain” coming down on Europe.
    • An increase in obstacles to travel with immigration barriers on the rise in many locations.
    • Advances in digital services within mobility which both improve employee experience while also driving down program management costs.
The implications and ramifications from multiple viewpoints and in the short, medium and long term were considered:
    • Existing BGRS and SIRVA Clients:
      • Challenges may be faced as previous examples show that the bigger an organization gets, the more difficult it is for them to properly serve the middle market clients. “Go Big, Go Niche, or Go home!”
      • Consolidation and streamlining internal and external facing technology — decisions on which platform will be used will need to be made quickly to avoid duplicate costs. With the options including to use SIRVA’s or BGRS’s or to invest in a new platform. All options will likely impact the existing clients in some way.
      • Internal expertise and thought leaders within the expanded talent pool will likely drive thought leadership which could be made available to existing clients. Current BGRS and SIRVA Supply Chains will also likely be consolidated. As Both companies have their own supply chain — similar to the questions around talent and technology, the impact to the existing supply chain will need to be resolved. It is unlikely that all suppliers will be able to support the expected downward pressure on costs which may impact future choice.
      • When and how will the cost pressure on suppliers be felt?
      • The likelihood of a consolidation of the supply chain will also have an impact on the downstream supply chain.
    • Competitors:
      • Short-term: Expectations are that as BGRS and SIRVA consolidate and streamline their operations they will be distracted from day-to-day delivery to existing clients which may result in clients opting to test the market through issuing more RFP's. This would open up new opportunities for the competition.
      • Medium term:  With increases in scale, the new company could use this increase in size and market ownership to gain cost efficiencies through putting pressure on the supply chain.
      • Long Term: Major competitors will likely face a challenge as the combination of SIRVA and BGRS results in one very large organization with access to more human capital, marketing, thought leadership and so on. However, scale has its own challenges and sometimes agility, speed and adaptability are lost.
    • BGRS and SIRVA Employees
        • It is understandably a very worrying time as operational efficiencies and redundancies are expected. However, this new source of talent will likely be absorbed quickly by others in the industry with so many job opportunities available (including at Benivo!)
        • Specific areas of the companies are more likely to be impacted, for example supply chain job security where an expected focus on cost reduction from suppliers will be initially felt.
    • The show concluded with addressing the live comments and feedback from participants.

Access a recording of this fascinating industry debate on the impact this merger will have on the Global Mobility Profession both in the short-term and over the years to come.

View show recording

Beth Neilson

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Beth Neilson

Created on 17-5-2022