Revisit your Relocation Budget to Save Money
Assemble a cost-conscious global mobility relocation budget without compromising positive employee experiences.
When reassessing your global mobility relocation budget, you’re undoubtedly wondering how you can make the most of your funds. Rather than focusing solely on the question, “How much money did we spend?” it’s best to look at the bigger picture. In the past, did your budget provide the best possible return on your investment? If so, can you manage it at a lower price point?
There are methods to make the most of your mobility program’s funding, guaranteeing your company receives a strong ROI without penny-pinching your budget into non-existence.
Use data to assess your spending
Calculating correct cost estimates is critical to developing your mobility program’s financial goals and budget limitations. With access to previous years’ data, you can assess your budgeting efforts and pinpoint opportunities for improvement.
Compare year-over (YoY) trends with information you’ve gathered to find areas needing revision. Start with the fundamentals, such as the number of moves completed, the average cost per move, and the percentage of benefit utilization. You may overspend in a specific area. If one area is underutilized, another is consistently over limits, how should you modify your budget?
Try separating assignments by site and job position to develop a clear overview of expenditure and need in various markets. Focus on areas where employees have requested or negotiated changes or have spent extra money. Compare the most frequently used benefits to those that aren’t as common.
Anticipate changes in the market and trends
Your employee relocation budget will undoubtedly be affected by the fluctuating state of the market. For example: because of the COVID-19 pandemic, there were severe housing shortages, rising prices, and disruptions in the supply chain. As a result, costs and delays increased, putting pressure on global mobility programs and assignees alike.
Due to intense competition in the housing market, multiple-day trips that resulted in purchasing or leasing a home may now necessitate several trips. Families are forced to stay in longer, more costly short-term housing arrangements due to the increased time it takes for household goods shipments to arrive.
Your department must be prepared to address relevant market fluctuations as they arise. As these market conditions change, use data from previous years as a guide. Analyzing past data will help you anticipate any added costs required to alleviate any financial burden on you and your employees.
In many cases, market changes and trends necessitate additional funds, which should be baked into your budget. Lack of budgeting forethought regarding market changes may mean unmet funding expectations and jeopardize your transferee’s satisfaction with their assignment. A strategically written policy should account for surprise situational spending as much as possible.
Plan ahead and combine benefits in your relocation budget
What about ways to save on relocation costs? Think about offering a mix of benefit types to meet the needs of your employees and save money.
Include justifiable expenses like short-term housing, household goods shipments, and transportation in your mobility program budget. The cost of utility deposits, connection fees, and driver’s license fees, among other things, can be made easier for employees with a one-time lump sum payment.
Prepare a fund for employee negotiations
Not all employees will accept their relocation benefits outright, so prepare for negotiations with extra funding to ensure a satisfactory compromise can be found. Negotiating relocation benefits is often less expensive than salary negotiations, as relocation benefits are paid only once.
Base your budget on professional estimates and predictive analytics
It’s impossible to anticipate every budgeting need, but having first-rate mobility software at your fingertips can ensure you’re prepared. Ineo’s TechSuite offers relocation and assignment cost estimates to help generate the perfect budget for your global mobility needs. Contact us today to learn how we can help you save money without sacrificing program quality.