Your policy is the core of your workforce mobility program and it can dictate as much as 98% of the costs you incur. You want to control spend, especially since average domestic relocations can cost upwards of $80,000. International moves can be even more expensive. How do you contain common cost drivers and still attract and retain the “A” players that will take your organization to the next level? Here are 5 tips.
1) Watch home selling related expenses. Your key talent will be keener on relocation if you make it easier for them to find and purchase a new home. Yet, this one of the of the largest cost components, particularly when it comes to moving employees from a low cost to a high cost location. Something to consider is to take advantage of tax deductible expenses and leverage home sale programs that comply with tax avoidance strategies to reduce tax implications.
2) Understand your supply chain. Your relocation provider is responsible for handling the supply chain of brokers, appraisers, inspection companies, van lines, etc. You want to have the right balance of system, service and procedures to provide your transferees with a smooth move. That way, your mobile employee will be able to get up to speed in the new location, quickly.
3) Create a scalable model for mobility. An international assignment has many moving parts such as home/host combination, length, tax treaties and whether or not there is a trailing spouse and family to accommodate. Your organization is wide open to compliance risks on all fronts. Have a scalable model that looks at tactical as well as strategic aspects to manage the mix. Look to use effective tax planning and take advantage of local tax regulations.
4) Have the right boots on the ground. Working with qualified DSPs (destination service partners) can help control costs as well as expedite the process. A well-connected DSP is like a well-oiled machine. They can help your mobile employee tour safe and affordable housing, negotiate fair leases and purchases, find schools for accompanying children, etc. Perhaps most importantly, they can manage transferee expectations about what they’re going to find in the new locale, shifting the blame for any unrealistic hopes away from your organization.
5) Adopt a shared philosophy for educational expenses. In the past, one way a company showed its commitment to families on assignment was by paying 100% of tuition for accompanying children on assignment, as well as additional fees for books, uniforms and extra-curricular activities. Another way to approach this is to look at whether or not the children were already receiving a private education in the home country. If that has been the case, you can negotiate a partial contribution from the mobile employee for this expense.
As a corporate mobility manager, you’re under pressure to reduce spend while simultaneously providing your organization’s star talent with an attractive package. To learn how to create a program that meets both these objectives, request our whitepaper “Reducing Your Spend On Workforce Mobility” by emailing us.