When to Set a Relocation Budget
When a company is relocating an employee, there are many expenses to track and logistics to coordinate in order to make it happen. When creating relocation policies and benefits on behalf of the company, there are many aspects of a relocation to consider. This can include buying and selling a home, moving the employee’s household goods, and short-term housing in the new location.
With all of the complex movements required for a successful relocation, it can be hard to know when to begin the budgeting process for the relocation. Should it happen before the position is posted? Before the employee is made aware of the opportunity? When the company finds the best prices for relocation services? While there isn’t a definitive answer, there are several mobility industry standards to consider when determining when to budget for the employee’s move.
The Right Time to Set a Relocation Budget
Typically, the best time to set a relocation budget is once the offer is extended to the candidate, especially if the company is working with a relocation management company. The primary reason for this is because the relocation company can work with the candidate to discuss their questions or concerns with the move. By allowing a relocation company to assist in the interview process, can ensure the employee has their needs covered, while the company is not overspending.
For example, an employee may have multiple cars that need to be shipped to their new destination. After speaking with the candidate, the relocation company can then report back to the company on the potential costs and services needed to relocate the employee and their family.
If the company’s policies only cover the cost of transportation for a single vehicle, that information can be communicated back to the employee. Policy restrictions play an important role in helping companies control costs. However, some organizations may agree to an exception to their policy in order to assist the employee with their move and ensure acceptance of the relocation offer. These changes will impact the total cost of the relocation.
Alternatively, the second-best time to start relocation budgeting is once the job offer is accepted by the candidate. Now that the employee understands that he or she is moving, the relocation team can work with them on what to expect and allow them to get the most out of the relocation benefits offered by their employer.
How to Calculate for Relocation Costs
When planning for relocation costs, there are many things to keep in mind, specifically costs like:
- Real estate costs, such as buying and selling a home
- Moving of household goods, cars, or pets
- Travel expenses
- Storage facilities
- Temporary housing in the new location
Once all foreseen costs are accounted for, the relocation budget can be managed by the relocation provider. It is recommended that companies work with a relocation management company that utilizes relocation technology and software that can include real-time tracking of employee moving expenses. This helps companies not only stay on budget but create or renew budgets for future relocations.
Working with the Best to Setup Relocation Budgets
GMS is here if you have questions about developing relocation budgets. Our team can support your employees in getting the most out of their relocation benefits, while your company can stay within your relocation budget. Contact us today online or call 1.800.617.1904 to speak with one of our qualified team members.
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