Four Ways to Lower your 2023 Global Mobility Budget
It’s no great secret that the economy has been struggling through most of 2022. When faced with an economic downturn, many companies understandably find themselves seeking out cost-cutting opportunities. Or, as some like to say, achieving efficiency gains.
Whatever your terminology, executives of global enterprises are typically unanimous in their approach, and they will undoubtedly want to see global mobility leaders follow their organization-wide cost-cutting lead.
There are many tried and tested ways to analyze your global mobility budget to find potential savings. The key is to do so without sacrificing the support provided to employees who have been awarded the chance to move and work abroad, many of whom are high-potential team players deemed worth grooming for higher levels of leadership.
With the 2023 global mobility budget planning cycle upon us, Ineo has put together several tips to help you sort through the options.
Four ways to lower your global mobility budget
A great way to find savings opportunities is to review past expenditures. For example, you need a detailed report of costs surrounding your company’s global mobility activities. In that case, you should reach out to the accounting department and find out if they can put something together.
Review your expenses in various ways: year-over-year, quarter-over-quarter, trends over 2-3 years, etc. Your historical knowledge of primary cost drivers (e.g., a sudden surge in international assignments following 1.5 years of pandemic lockdown, increase in housing costs due to more people working remotely) will help you make sense of the variations. You’ll need that understanding to find predictors of future costs and opportunities to cut back without sacrificing the quality of support you provide employees.
Executive leadership frequently creates and shares its cost-cutting target percentages, usually based on projected revenue and the profit margins they hope to achieve across product lines, geography, etc. For instance, they may want to see a 10% reduction year-over-year for administrative cost centers, which will help guide your decision-making. Getting some early insight or best guesses from friends and allies within your organization could help you get a head start on preparing for cutbacks.
You may start looking for any processes or services that are not critical to the overall mission of supporting your company’s global mobility requirements. If any services or products could be eliminated without impacting your overall delivery of support, add them to the proverbial chopping block in the event cuts are more than anticipated. More often than not, it’s relatively easy to trim a little fat across a wider swath of your global mobility offering without enduring too much pain in your department.
If it’s a worst-case scenario and the cuts are expected to be much deeper, then you may be forced to make some pretty tough decisions – significantly reducing the number of international assignments in the coming year, eliminating outsourcing of any functions, staff reduction, etc. The sooner you can prepare mentally and administratively, the better off you’ll be, and the faster you can make the cuts.
You may also have opportunities to revisit vendor service agreements, especially entering a new budget season. If your latest contract and related pricing were reflective of a post-pandemic economy experiencing unprecedented growth, then it’s an opportune time to renegotiate with an eye toward a cooling economy. Most vendors realize their customers will tighten their belts in the next budget cycle. As such, they may be willing to flex more to help you meet your cost reduction goals than in prior years.
It may seem counterintuitive, but a bruising economy can lead to smart investments in technology that yield efficiencies (a.k.a. savings) over a long period. For example, if your global mobility process is highly dependent on manual spreadsheets and calculations, taking your department through a digital transformation by implementing a global mobility software solution could be the answer.
Undoubtedly, an end-to-end global mobility software solution will help bring greater control and efficiency to your workflow. For example, instead of continuously updating spreadsheets and manually building reports, a seamless global mobility solution allows you to focus more time on delivering your services to the key stakeholders in your company.
Even if your company still needs to obtain the budget for an entire software solution, it’s still possible to take advantage of some critical aspects of a solution. For budgetary or internal resource issues, some companies implement pieces of the global mobility workflow on a module-by-module basis. That way, they automate the workflow’s most painful, error-prone elements. Vendor and partner management, mobility expense and payroll, relocation assignment cost estimating, assignment management, and mobility compensation are available to deploy and run independently to help you maximize your efficiency.
Deciding if a software solution is right for your company is a complex process. Your best bet? Review your company’s past performance and expenses related as they pertain to the global mobility function. Once you have a comprehensive cost based on time, materials, and actual expenses, compare that to the potential savings you can yield from an automated solution customized to your needs.
If you’ve never done this kind of analysis before, you should lean on your IT and accounting departments for advice – they’ve undoubtedly helped figure out the ROI of a software purchase for other departments. Just remember to factor in any unforced errors that cost the company, whether in dollars, reputation, or employee goodwill. Those costs matter and are a direct result of a lack of automation.
Global mobility software solutions that fit your budget
As a global mobility professional, navigating your program budget during an unpredictable economy requires smart solutions. Make the most of your international mobility program’s budget by consolidating disparate systems and streamlining administrative tasks with Ineo’s full-service software solutions.
Contact Ineo today to discover how our comprehensive global mobility software solutions can help your mobility program flourish.