Managing Relocation Costs: Where to Spend and Where to “Slack”

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Are you in charge of your company’s global mobility program?  If so, you need to be able to effectively evaluate employee relocation costs, so that you can design and manage a successful program for your organization.  We hope this will help!


What relocation services do companies typically provide to their employees?

 This can be a very difficult question to answer, since one size doesn’t fit all.  There are many variables that go into the equation, and relocation benefits can differ widely from one company to the next, and from employee to employee based on their unique situation and position with the company. So, not every employee necessarily receives the same benefits.

Generally speaking, relocation services and costs can include anything and everything from packing, moving and storage, to relocation home-sale benefits, and everything in between.


Here are some of the big ticket items for a domestic relocations:

  • Packing and shipment of household goods
  • Home sale and home purchase assistance
  • Mortgage assistance
  • Temporary accommodations
  • Vehicle transportation
  • Home-finding and rental assistance
  • Miscellaneous out-of-pocket expenditures


For international relocations, companies might elect to pay for additional benefits, such as:

  • Cross-cultural training
  • Destination services
  • Language training
  • Tax, legal and immigration services


Considerations for your relocation program

It is important to first look at what your current and potential needs are, then try to strike a healthy balance between the services needed by your relocating employees, and what makes sense for your organization.

You should then look at the components that you would like to include in your relocation program, and what the estimated costs will be for each one.  This will guide you in determining a relocation budget for your organization and show you if and where any adjustments should be made.

Developing a successful relocation program for any company can be quite a cumbersome and even overwhelming process.  So, you will need to decide if this is something that is best accomplished and managed in-house, or whether your organization would be best served by outsourcing of the program to a third-party relocation management company.

Either way, you will need to decide which components are the most important ones to include, and which ones you might be able to do without.  And, since not all employees and situations are the same, you will need to consider how rigid or flexible the program will need to be.


What are the most important aspects of a relocation program?

On a very fundamental level, you want to be able to cover the relocation costs that an employee would incur as a direct result of the move.  That would include items such as the transportation of the employee’s household goods and other specific expenses that the employee might incur.

But, you also have to look at the level of the employee, how long they have been with the company, and what it would take for them to be able to move themselves and their family from their current location to the new one.


What can you do without?

Deciding which relocation benefits to do without might seem difficult to determine, but there are always extraneous items that might not be as important to your employees or the success of your program.  For instance, spousal or partner career assistance is a relocation benefit offered by some companies.  That doesn’t mean that it is something that you need to include in your relocation program.


How to keep costs down, while not compromising on key benefits

 At the end of the day, the goal is to ensure that your relocating employees are being well taken care of, and that they are incentivized to make the move.

So, you want to make sure that your program follows generally accepted standards in the marketplace.  But, keep in mind that if you are in an industry that is fiercely competing for talent, you might need to sweeten the deal.


The good news is, you don’t have to go it alone!  We are always here to answer any questions you might have, and to help guide you through the difficult choices and considerations for developing and managing a relocation program that is most appropriate for your organization. So, please contact us anytime!

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