Interest vs Flat Fee Funding on Talent Mobility Services
Identifying unexpected costs associated with Relocation Management Companies (RMC) is often overlooked during the proposal or renewal process. While direct costs for shipping goods, home sales, home purchases, temporary housing, and other in-policy services are straightforward, the interest associated with funding these costs can accumulate quietly and impact the overall spending of your relocation program.
The cost of funds can vary by RMC. Most RMCs offering expense management services charge a Prime Rate plus a 3% or higher interest rate on each invoice paid on behalf of the corporate client. The interest calculation begins from the processing date to the time payment is received from the corporate client. This approach provides the RMC with an additional revenue source and can be costly, depending on the number of invoices and payment terms.
Based on the number of invoices, expenses, and payment conditions, a single funding charge can significantly lower the fees associated with your relocation program. This one-time payment addresses all relocation costs directly rather than imposing interest charges.
Companies can gain better control over their relocation expenses by opting for a flat funding fee. This approach simplifies budgeting and forecasting, eliminating the uncertainty associated with fluctuating interest rates. Additionally, it allows for more transparent financial planning, making it easier for businesses to allocate resources effectively.
When considering the best option for your relocation program, it’s essential to evaluate the total cost of each method. A flat fee can often lead to significant savings, especially for organizations that manage many relocations. Furthermore, this model can enhance the overall experience for employees, as they won’t be burdened with unexpected costs or payment delays.
Work with GMS to save on Relocation Costs
At GMS, we understand that every relocation is unique, and we tailor our services to meet your organization’s and employees’ specific needs. Our team of experts is dedicated to providing comprehensive support throughout the relocation process, from initial planning to final settlement. We offer various services, including destination services, home-finding assistance, and cultural training, ensuring a smooth transition for your employees and their families.
Moreover, our technology-driven solutions provide real-time tracking and updates, allowing you to monitor the progress of each relocation. This transparency keeps you informed and helps build trust with your employees, as they can see the status of their move at any time.
Partnering with GMS also benefits you from our extensive network of local service providers. This network enables us to negotiate better rates and services on your behalf, allowing you to enjoy cost savings without compromising quality.
Let us help you streamline your relocation program and enhance your employees’ experience. Contact Global Mobility Solutions today to discover how we can assist you in achieving your relocation goals while keeping costs manageable.
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TJ Henderson
Over the past 13 years, I have been fortunate to work in various mobility roles, including Global Operations, Global Account Management, and Global Supply Chain. Each role has been a stepping stone, providing me with a comprehensive understanding of what a successful, all-encompassing mobility program should entail. With my extensive experience in both Global and Domestic mobility programs, I am confident that we can collaborate to find effective solutions for your mobility needs.
