How to save costs on your relocation policy

How to save costs on your relocation policy

Relocating employees has traditionally been a very expensive task. Factoring in travel, shipping, housing and more, corporate relocation costs easily get into tens of thousands of dollars.

It’s all about the right balance. You need to budget enough so the move is as enjoyable, efficient and stress-free as possible - it’s in your interests, since losing staff due to bad experiences will cost more in the long run! Yet, it’s crucial to keep employee relocation costs under control.

Here we’ll walk through five key ways to make your relocation policy more cost-efficient and still comprehensive, without sacrificing the standard of support your employees need.

1 - Flex your policy

To make your employee relocation expenses more cost-effective, flexibility is key. Our number one piece of advice is to avoid a one-size-fits-all policy - this is an easy way to waste money.

We’ve seen many examples of companies being guilty of this:

●     Putting restrictions against where money can be spent, and

●     Insisting that employees receive support for items that aren’t a high priority for them.

For example, we’ve worked with a major retailer that used to give all employees a huge shipping container as part of their relocation policy. One of their young movers with very few personal belongings had nothing to ship, so ended up buying bicycles in the UK to try to fill her container!

Everyone has different needs, and will want their budget to be focused on the elements that are the highest priority for them. The best way to manage this is by implementing a core-flex relocation policy. This is where you shape your relocation packages to be able to concentrate funds on what’s important to the individual. This way, you can make your budget work smarter.

Core-flex support comes in two parts:

  1. A Core benefit, which is a specific set of services that every employee receives, and
  2. A Flex benefit, which is an additional allowance (often as a financial sum) that can be allocated to what matters most for the individual from a list of additional services.

Core benefit examples:

●     Home-finding - enquiries, viewings and applications, contract review (according to a PerchPeek survey, over 90% of movers find this the hardest part of relocating

●     Tax and immigration support

●     Utility setup support

Things like getting a work permit and finding a place to live are the base elements of support that employees at all levels will need and should be entitled to, in order to help their relocation go as smoothly as possible and help you avoid lost productivity or employee attrition.

Flex benefit examples:

●     Shipping - from a few bags and boxes, to a full house move

●     Staying in temporary accommodation for longer, while they look for a long term home

●     School support from a local consultant, for those moving with children

The beauty of flex benefits is not forcing upon your employees any services they really don’t need or want. This creates a better moving experience and of course, your budget goes further.

Ways to flex a package:

●     Don’t shell out on a shipping container if your mover only intends to pack one suitcase!

●     While some staff will benefit from a serviced apartment, others prefer a cheaper option

●     Formal cross-cultural training is rarely of value outside the executive level

Here’s one of our clients’ thoughts on the core-flex model they adopted through PerchPeek:

“We used to just offer a cash allowance to relocators as we struggled to find affordable relocation services that could provide high value support in a range of markets. Now, our employees feel incredibly supported throughout their relocation but still get ownership over how they spend their allowance.”

Global Director, Recruitment & Outreach - Framestore

To build on the core-flex approach, a great way to control relocation costs while empowering your staff is to make your policy more employee-driven, where appropriate.

Some of the more tech-based relocation companies provide more self-service-based relocation programmes. These are highly suited to more tech-driven, younger demographics and greatly reduce cost vs. manual hand-hold services. PerchPeek supports a lot of junior employees and intern relocation assignees in this manner.

2 - Set policy bandings

One way to manage relocation costs is to put bandings in place. This is when one defines a number of fixed employee relocation cost packages with increasing levels of predefined support, then allocates a specific package to each employee depending on their seniority.

This is a cost-saver because having this variation of packages allows companies to manage annual relocation spend easily and without ambiguity. With this method they can adjust bandings according to what their budget is and make sure they adhere to that.

Of course, this approach to corporate relocation costs has its advantages and disadvantages, and it’s important that within each band there are still options to flex the budget to the mover’s individual needs. We’ve explored the pros and cons of this approach and offered advice on flexing banded policies; keep an eye out for our package bandings guide!

3 - Create elite yet highly focused VIP packages

While staff at all levels will benefit from a base level of relocation support, keep in mind that when it comes to your executives, the stakes are highest: if their relocation goes badly, it could have a catastrophic effect on your business. That’s why it’s so important to make every effort to make sure they have a first-rate move.

There are many things a VIP relocation policy can include to transform a typical move into a five-star experience, but the key to keeping costs down is to make it feel ‘VIP’ by tailoring it to your executive’s needs. Not only will this mean you’re not wasting any budget on services that are going to go unused, it’ll also make for an even better mover experience - win-win!

Look out for our article where we take a deep dive into the elements that an elite VIP relocation policy could include, and how to flex the budget to keep it cost-efficient and more suitable for the individual’s requirements and expectations.

4 - Use a wider variety of housing options

Traditionally, the norm in relocation has been to place employees in serviced apartments; these can cost up to an eye-watering $400 per night in some places!

Don’t get us wrong - in some cases these are the best option, and when it comes to more senior employees, this is exactly what they expect. However, other accommodation providers like Airbnb* can provide a comparable ‘home-away-from-home’ experience at a lower cost.

This is a great tactic for more junior employees; by giving them the option of alternative housing types, the remaining budget can be flexed towards other needs.

* Note: All accommodation providers should be vetted thoroughly to ensure employee safety.

If moving several junior employees at once, consider arranging shared housing. As well as being far more economical than individual serviced apartments, it means the team can start building those all-important relationships and offer mutual support.

5 - Pivot to results-based supplier fees

Many traditional relocation providers charge clients based on the number of days of service, such as a two- or three-day home search. If the job isn’t completed during that period, this means needing to add in additional time and extra fees being added on as a result.

Additional days of home-searching can cost well over $1,000 (USD) per day, and be extremely damaging to budgets for future movers. What's more, in current housing markets across the US and in major European cities such as London, Dublin, Berlin and Amsterdam, housing searches are so competitive that these payments are required more and more frequently.

You’ll get more from your budget by switching to a supplier that charges based on results achieved, rather than the number of days spent on the project; with more impetus to get the job done, efficiency is higher.

Make your own cost-efficient relocation policy - get a free cost estimation

It can be tricky to know where to start with relocation expenses for employees, whether you’re setting up a brand new policy or you want to validate and cultivate your existing one.

PerchPeek are more than happy to help any HR team construct a highly flexible, cost-effective relocation policy. Simply let us know a few key details about your business needs and we’ll provide a free cost estimation.

We specialise in flexible policies to make your budget go further by focusing on what really matters, helping set practical staff relocation costs to suit employees at all levels.

PerchPeek’s free relocation policy cost estimator tool can help:

●     If you’re building a relocation policy from scratch

●     If you want to tighten up your policy to make it more cost-efficient

●     If you want to develop your policy further, e.g. make it more self-driven

We love to chat. If you’d like to learn more about how to get relocation support set up for your employees, just drop us a note here. We’ll be more than happy to arrange a call with you so we can find out more about your needs and answer any questions you may have.

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