use these tips to keep relocation costs within budget
It’s no secret that relocating an employee is a costly endeavor. Creating global teams for your business can be highly beneficial. However, you might lose money on the project if you fail to play your cards right. It’s easy to feel overwhelmed with all the expenses you encounter during this process. There is so much to account for when managing employee relocations. Just a few of these things would be:
- Moving company expenses
- Benefits packages
- Acquiring accommodation
- International transport (when applicable)
- HR department bonuses
And the list goes on. However, it’s not all bad news. If you work strategically, you can save on relocation costs while keeping your employees happy when getting them from point A to point B.
Create tiered packages for employee relocations
The first strategy you can use to stay on budget when relocating an employee is creating tiered relocation packages. This means that the benefits package for an entry-level employee who has been with the company for three months should differ from that of an executive. This is a widespread and very effective strategy. Many employers have three or even four relocation benefit packages. You can create additional layers to those categories based on employee productivity.
Secure housing before the move
There are a lot of hidden expenses that come with moving on a whim, from renting out storage for your employee’s items to an indefinite time spent in short-term accommodation. And since using a storage unit isn’t tax deductible for businesses anymore, it’s even more expensive. Securing housing for your employee before moving is an excellent way of managing employee relocations while saving money.
Additionally, one of the most common reasons employees won’t relocate for work is that the move seems too hassle. So, securing everything in advance will not just help you save money; it’ll also help with employee satisfaction.
Introduce expense caps
Introducing expense caps is a great way to ensure your relocation program stays on budget. Expense caps are a great way to ensure no employee abuses their allowance. It’ll prevent surprise expenses from becoming the norm within your relocation program.
When introducing expense caps, there are two essential factors to keep in mind:
- Permissible exceptions – You should have some leeway in your budget if something goes wrong during your employee’s relocation. If they need to make an unplanned expense that is deemed necessary, you should be able to provide that;
- Expense caps should be personalized – It’s important to remember that living expenses differ in different areas. Ensure that your expense caps are calculated with the average cost of living in the area in mind.
Managing employee relocations is not ‘one-size-fits-all’
While offering every employee the same budget, guidelines, and services when managing their relocations may seem much more straightforward at first glance, you’ll quickly realize that it’s not. For example, a young single employee will require very different services than an older married employee with two kids.
It’s essential to account for the individual needs of every employee you are relocating. Don’t worry if some mistakes come up the first few times. After a while, you’ll learn which services and guidelines are necessary for which group of employees. Ensuring that benefits packages and relocation services are tailored to the needs of your employees will help you save in two main ways:
- You’ll be able to cut out any expenses that aren’t necessary for that worker;
- You won’t be cutting out vital things to your employee. This will help keep morale (and productivity) up.
Other Relocation Costs to Keep in Mind
Conversely, a great option is to secure a fully furnished new home for them. That way, they only need to bring essentials and valuable personal possessions. Some other ways to cut costs on a long-distance move would be:
- Choosing the suitable date – Moving during the off-season (winter and fall) can usually get you lower prices;
- Shopping around – Getting estimates from a few moving companies is a great way to ensure you’re getting the most bang for your buck;
- Compound expenses – If you plan on hiring professional packers in addition to movers, try finding a company that offers both. That way, you can get a deal on both services instead of paying the total price for each.
Ready for the best deal on relocation services?
Global Mobility Solutions (GMS) is your best bet to get a proper quote when it comes to relocation services. First off, all of our service providers are strictly vetted. And second off, we use a multi-bid approach when it comes to hiring vendors for each move.
Most relocation services companies (RMC) will have a trusted partner vendor they use most of the time. Which is why their prices stay set at what they are. But GMS will get multiple bids from different vendors so that our savings on relocation costs get passed on to you.
If you’re ready to hear more about how GMS can help save your company money on relocation costs, contact us today to schedule a free consultation.
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