Providing relocation assistance can involve many complexities including selecting a mover, providing help with selling a home and support beyond the move in the new location. With a global relocation however, there are additional concerns such as visas, international taxes and housing allowances, all of which may involve a high cost.
Cost control, which is nothing new to relocation managers, continues to reign as the most frequently cited challenge. According to a recent industry survey, some of the trials involved with high-cost control involve the increasing role of business managers in mobility decision making, exception requests and new demands from employees, and use of costlier move types.
Some strategies that CapRelo uses to help manage relocation costs include:
- Educating decision-makers about costs so as to carefully estimate the cash, resources and other out-of-pocket expenses needed for a transfer. Underestimating is one of the most common mistakes made.
- Establishing a fair ceiling for housing and related costs for employees, by making sure to account for the area’s monetary and real estate market fluctuations.
- Considering the length of the assignment. The longer the employee will stay in the new location, the more the compensation rates should be in line with those of the host country, while also ensuring that no employee loses money as a result of a transfer.
A comprehensive global mobility policy will keep many factors within your control, but other factors affecting cost – the value of overseas real estate or global monetary fluctuations, for example – are not. If you allow for surprises when planning your budget, you will be better prepared to get your employees off to a good start in their new locations.