In a recent post, we looked at how relocation pricing works and how to positively impact your relocation spend and budget. In this post, we continue our discussion of relocation pricing, focusing on three ways you can lower your relocation expenses.
Audit Your Relocation Program
Before you can start making decisions on how to reduce costs, you have to understand your current program – what you offer, what you don’t, and most importantly how your program reflects the real-life experiences of your relocating employees. That means going through each step of the relocation process and analyzing both quantitative and qualitative data; not only looking at the numbers from your previous moves, but also surveying your employees who went through the relocation process and uncovering what benefits were truly meaningful to them. For example:
- Which benefits did they use the most, and how were they used? For example, if your program allowed for one house hunting trip, would a second trip have been helpful?
- Which benefits did they use the least? Is that because they truly didn’t find it helpful, or because they didn’t understand the policy or its value?
- What changes to the program would they like to see? Why?
Even if budgetary limitations prevent you from following through on every request, fully understanding the process can help you make sure you’re providing the right benefits and eliminating the ones that aren’t providing value. By making sure the policies are clean from the start, you’re laying the foundation for a time- and cost-efficient relocation.
Stay on Top of Exceptions
One thing every relocation has in common is the need for precise timing and logistics: When the unexpected occurs during a relocation, you can bet it will impact the logistics throughout the rest of the process. The closing on a new home gets delayed? That means you’ll need to find temporary housing for the transferring employee’s family and extend their storage arrangements. These exceptions result in higher costs. In fact, two-thirds of moving exceptions stem from temporary housing.
The first step to minimizing exceptions and their impact to your bottom line is by designing a thoughtful and data-driven relocation program. The more your program reflects the lived experiences of your transferring employees, the better you’re able to plan around the exceptions. However, the execution of the program is equally as important. Which is why we train our Relocation Counselors to anticipate needs before they are requested, level-set expectations upfront, and regularly check in with transferees throughout the move. Should an exception be required, our Counselors review all possible alternatives first—Can a closing date be moved? Is there a more cost-efficient storage alternative? Can the cost be covered by a miscellaneous allowance?—to make sure the impact on the relocation budget is minimal.
Staying on Top of the Trends
To find relocation cost savings, you don’t always want to look at the dollars – you want to look at the pennies. When you move 100 people per year, there is a lot you can’t change. Real estate prices are what they are and moving fees are largely consistent among service providers. But with a little creativity and by staying current on what’s happening in the industry, you’d be surprised what savings you can find.
One of our favorite examples is flat screen TVs. Fifteen years ago, when flat-screens were first in demand, they were both expensive and incredibly fragile. Moving companies would build custom crates to transport at a cost of nearly $500 each.
And what’s a little crazy is…that’s still the process today. Even though flat-screens have evolved since the early 2000s, are far less expensive, more durable, and most people have 3 or 4 per house. You no longer need a custom box to transport them. A blanket will do just fine. If you take that savings of $2,000 per move and multiply it by the number of moves you have per year, suddenly we’re talking about a significant savings.
Or look at home sale bonuses. Ten years ago, companies would offer $10,000 bonuses to employees to motivate them to sell their homes quickly. That benefit is still prevalent today, even though homes are currently on the market on average only 78-days.
Through the use of regular benchmark studies and clear and consistent reporting, we’re able to identify any gaps and redundancies in your policy as well as opportunities for savings. Savings that can then be used to optimize your policy for a better relocation experience for your employees.
While a relocation benefit is a significant investment in your employees and your business, there are ways to implement it thoughtfully in a way that keeps your employees happy and minimizes costs. Tailoring your program to the real-world experiences of your transferring employees, keeping on top of the relocation process and staying aware of industry trends not only make for a smoother move experience for your employees, but it helps keep your expenses down.