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Relocation is tricky, and not just for the person moving! For HR & Mobility people, there are a lot of relocation expenses to consider, from home-finding to shipping, and everyone’s needs are different. How do you strike a balance between supporting staff and protecting your bottom line? Traditional corporate relocation services often struggle to provide relocation assistance on a budget of less than £20k. However, the demands of talent acquisition now mean that ever-increasing volumes of employees are needed—not just necessarily C-suite, but across whole businesses.
What’s more, budgets are tighter than ever in 2023. Companies need to be able to acquire the best talent in order to fill skills gaps, and corporate relocation can be a solution to this, but it needs to become far more accessible to these companies in terms of price point to make it work. Perckpeek has worked with many companies to help tailor their relocation services approach to make them more cost-efficient whilst maximizing the output. We’ve been asked to design relocation policies that cost well under £20k (and in some cases, well under £5k) per employee, that still cater to the essential needs for someone who needs to relocate and start life over in a new city.
We’ve created this guide covering exactly how to set up a relocation policy that’ll work for your whole team, from interns to the CEO, whilst opening opportunities to reduce cost. It’ll offer the flexibility to cater to each person’s individual needs, with no budget wasted.
In this guide we’ll cover:
Corporate relocation costs can vary hugely based on your business needs, your employee’s individual requirements and level of seniority, and their destination city, to name a few! However, corporate relocation has traditionally been a very expensive task. Factoring in travel, shipping, temporary housing, and so on, you can easily be talking tens of thousands of dollars.
According to ARC Relocation, benchmark figures across most industries include:
When launching a relocation policy, it’s crucial to cater to the big challenges that employees face during their move.
The five biggest challenges for relocators include:
When aligning the costs of any relocation package, it’s all about finding the right balance. You need to budget enough so the move is as enjoyable, efficient, and stress-free as possible. It’s in your interests since losing staff due to bad experiences will cost more in the long run! Yet, it’s crucial to keep costs under control and not waste funds.
Later, we’ll explore the many ways to make your relocation policy truly cost-efficient without sacrificing the mover experience. First, let’s dive into your options for spending your budget!
There are a bunch of options for managing your corporate relocation services, but many traditional methods, while they might look cost-efficient at first glance, provide a mediocre or downright bad experience on both the employer and employee sides, and are, in short, a false economy.
Let’s start with the four approaches to avoid when working to a tight budget:
Employee Relocation Costs Can Vary Hugely
Employee relocation costs can vary hugely based on your business needs, your employee’s individual requirements and level of seniority, and their destination city, to name a few! However, corporate relocation has traditionally been a very expensive task. Factoring in travel, shipping, temporary housing, and so on, you can easily be talking tens of thousands of dollars.
According to a study by ARC Relocation, the benchmark figures across most industries are:
When aligning the costs of any relocation policy, it’s all about finding the right balance. You need to budget enough so the move is as enjoyable, efficient, and stress-free as possible. It’s in your interests since losing staff due to bad experiences will cost more in the long run! Yet, it’s crucial to keep costs under control and not waste funds.
Later, we’ll explore the many ways to make your corporate relocation truly cost-efficient without sacrificing the mover experience. First, let’s dive into your options for spending your budget!
There are a bunch of options for managing your corporate relocation services, but many traditional methods, while they might look cost-efficient at first glance, provide a mediocre or downright bad experience on both the employer and employee sides, and are, in short, a false economy.
| Policy type | How does it work? | Employee experience | HR experience |
|---|---|---|---|
| Unsupported | Employees organise and pay for the relocation themselves | Poor experience • Feeling abandoned and stressed • Poor budget management due to inexperience • Susceptible to scams and overpaying |
Poor experience • Dealing with escalations from struggling movers • Little control and poor visibility of mover progress • No spend data, meaning optimisation is not possible |
| Cash lump sums | Employees are given basic information and are reimbursed to a certain level of expense | Poor experience • Feeling abandoned and stressed • Frequent struggles without budget advice • Susceptible to scams and overpaying |
Poor experience • Dealing with escalations from struggling movers • Little control and poor visibility of mover progress • No spend data, meaning optimisation is not possible |
| In-house | The employer’s Mobility or HR team drive 20-30 processes in-house and work directly with vendors to organise the relocation | Mediocre experience • Additional costs, e.g. temporary housing extensions due to lack of home-finding support • Difficult for HR to have the necessary expertise (and time) to provide bestin-class support • Frequent delays on queries and gaps in support |
Poor experience • Sudden surges in workload - capacity hard to predict • Hugely stretched managing 20+ processes for every mover • Stress of resolving escalations and fielding queries |
| Managed moves | Employees receive a set of fixed relocation services | Mediocre experience • Typically, costs are much higher due to working with premium suppliers • Very little ‘personalised’ support in reality • Employees ask why they can’t use this budget for other services that are important to them |
Mediocre experience • Extremely expensive • Difficult to justify to the rest of the business • Negative feedback from employees who would prefer for budget to be spent on different priorities |
So if these are the approaches to avoid, what is the best solution? As we’ve discussed, the key aims are to maximize the employee experience—addressing the five key challenges we looked at above—while minimizing the amount of money spent.
In the next section, we’ll go through 10 key ways to make your relocation policy more cost-effective, starting with the most important approach—implementing a Core-Flex policy!
Here we’ll walk through ten key ways to make your corporate relocation services more cost-efficient and still comprehensive, without sacrificing the standard of support your employees need.
To make your staff relocation package more cost-effective, flexibility is key. Our number one piece of advice is to avoid a one-size-fits-all relocation policy—this is an easy way to waste money.
We’ve seen many examples of companies being guilty of this:
For example, we’ve worked with a major retailer that used to give all employees a 40ft shipping container as part of their relocation package. One of their young movers with very few personal belongings had nothing to ship, so ended up buying bicycles in the UK to try to fill her container!
Everyone has different needs and will want their budget to be focused on the elements that are the highest priority for them. The best way to manage this is by implementing a Core-Flex relocation policy. Also known as a Managed Lump-Sum relocation package, this is where you shape your corporate relocation services to be able to concentrate funds on what’s important to the individual. This way, you can make your budget work smarter.
Core-Flex support comes in two parts:
Core benefit examples:
Things like getting a work permit and finding a place to live are the base elements of support that employees at all levels will need and should be entitled to, in order to help their relocation go as smoothly as possible and help you avoid lost productivity or employee attrition.
The Flex element is where an employee can allocate the remainder of their move allowance (usually in cash or in a points format) to the services that matter the most to them. This means the move is tailored to their needs, and removes any sense of inequality from the relocation policy, as every mover receives a fair initial allowance, and is able to use it to the maximum according to their own preferences.
Flex benefit examples:
The beauty of Flex benefits is not forcing upon employees any services they really don’t need or want. For example, some may be glad to spend a month in high spec temporary housing when they arrive, but others might rather put that money straight towards their long-term home deposit and stay in a lower-cost property for their first 30 days. Giving flexibility creates a better relocation experience, promotes equality in your business and of course, makes your budget go further.
Note:
A slight adjustment to the Flex benefits is to give broad guidelines on where the spend can go. For example, instead of a £10k lump sum relocation package that is not directed towards any particular service, some employers dictate that £5k of it must be dedicated to temporary accommodation. This still gives flexibility on the type of accommodation and length of stay, but also creates boundaries. There are pros and cons to doing this, and it is up to each individual company which approach they take.
Ways to flex a package:
Here’s one of our clients’ thoughts on the Core-Flex model:
“We used to just offer a lump sum cash allowance to relocators as we struggled to find affordable relocation services that could provide high-value support in a range of markets. Now, our employees feel incredibly supported throughout their relocation but still get ownership over how they spend their allowance.”
Global Director, Recruitment & Outreach - Framestore
Empowering employees is a way to save costs
To build on the Core-Flex approach, a great way to control corporate relocation services costs while empowering your staff is to make your policy more employee-driven, where appropriate.
Some of the more tech-based relocation services provide more self-service-led programs. This is where the employee is encouraged to learn, browse and purchase additional services from within the relocation technology experience. A lot of mid-level employees, graduates, and interns enjoy the flexibility of being able to choose how to allocate their benefits.
How NOT to do Core-Flex
A word of caution: some Core-Flex policies include the caveat that flex is allowed but only when using a specific set of high-priced providers. This is very common in points-based approaches offered by some relocation services who rely on referral fees from their supply chain. However, a lot of employees don’t wish to pay for these premium suppliers.
An example of this is giving a “flexible” set of points to be used on the move, but then only the most premium serviced apartments being available to choose from as temporary accommodation options. This restricts employees just as much as a managed corporate relocation policy and isn’t addressing the core (if you’ll excuse the pun) issue of why employees are frequently choosing to cash out! It’s because they believe the money could be better spent on other providers that are lower cost. Rather than waste their allowance on expensive providers, they choose to go it alone and run into common issues that mainly stem from inexperience.
One way to manage corporate relocation costs is to implement policy bandings. This involves defining a number of fixed relocation packages with increasing levels of predefined support and then assigning a specific package to each employee depending on their seniority. If you’re not already doing this, there’s a good chance the lack of defined bands is allowing department leaders and others to arbitrarily set the support allowances, and that can get expensive!
Bandings are a cost-saver because having this variation of corporate relocation packages allows companies to manage annual relocation services spend easily and without ambiguity. With this method, they can adjust bandings according to what their budget is and make sure they adhere to that.
However, while this approach to corporate relocation costs has its advantages, it’s crucial that each band still allows for flexibility to address the mover’s individual needs. We’ve explored the pros and cons of this approach and provided advice on flexing banded policies in a separate article; check it out here!
While staff at all levels will benefit from a base level of relocation assistance, when it comes to your executives, the stakes are highest: if their relocation goes badly, it could have a catastrophic effect on your business. That’s why it’s so important to make every effort to ensure they have a first-rate move. And yet, the packages for these people do not have to break the bank!
There are many things a VIP relocation package can include to transform a typical move into a five-star experience, but the key to keeping costs down is to make it feel ‘VIP’ by tailoring it to your executive’s needs. Not only will this mean you’re not wasting any budget on services that are going to go unused, it’ll also make for an even better mover experience—a win-win!
Check out our full article here to learn more about VIP policies, including the essential elements of a top-tier VIP corporate relocation package and strategies for adjusting the budget to keep it cost-effective while meeting individual expectations.
Traditionally, the norm in corporate relocation services has been to place employees in serviced apartments; these can cost up to an eye-watering $400 per night in some places!
Don’t get us wrong—in some cases these are the best option, and when it comes to more senior employees, this is exactly what they may expect. However, other accommodation providers like Airbnb can provide a comparable ‘home-away-from-home’ experience at a lower cost.
This is a great tactic for more junior employees; by giving them the option of alternative housing types, the remaining budget can be flexed towards other needs. Of course, with Airbnb and similar providers, employees should be provided with appropriate guidance to ensure that they check host accounts thoroughly and are vigilant against scams.
Shared Accommodation: If moving several junior employees at once, consider arranging shared housing. As well as being far more economical than individual serviced apartments, it means the team can start building those all-important relationships and offer mutual support. Perckpeek has seen a number of clients use this strategy to great effect!
Companies wishing to give low-cost home-search support may look to DSPs offering half-day home-search support as a ‘quick-fix,’ but this is, in fact, a quick way to burn through budget without achieving the desired results of providing adequate support to employees.
In fact, a half-day of DSP service is regarded as one of the poorest relocation assistance solutions for low-budget movers in the industry, as very little support can actually be delivered in just five hours.
Within that time, a few poorly researched property recommendations can be sent over, and possibly a contract review alongside, but the personalization to the mover and the experience is broadly reported as being extremely poor. The results are often inadequate, with unsuitable home recommendations sent to the mover, and it inevitably leads to either the investment being wasted or frequent fee extensions, meaning the costs mount up quickly.
A better method for providing low-cost home search, if concierge agency support is not within your budget, is for movers to be given the tools and guidance to carry out their own home search independently and successfully. This can be done through great content, tech, and consultant advisory support for answering questions.
It’s the norm for relocating employees to spend some time in temporary accommodation when they first arrive in their destination city. This is because it’s generally very difficult (if not impossible, in some markets) to secure a long-term home before arriving in the city, and it’s also generally a bad idea for the employees! They’ll want to take time to settle in and make an informed choice about the right neighborhood and type of accommodation for them.
As employers, it can be tempting to just throw cash at the temporary accommodation allowance for the sake of getting employees in place and leave the remainder to the employee, de-prioritizing the long-term home search.
What happens next in this scenario? Employees also neglect their long-term home search! They get comfortable in temporary accommodation for the set 30- or 90-day period, then when this comes to an end, they panic and request more budget for temporary housing extensions.
To avoid wasting money on these costly extensions, it’s best to:
Remember, as we mentioned, nine out of 10 respondents in a Perckpeek survey said that home-searching is among the most difficult parts of a corporate relocation. And that’s hardly surprising, judging by just how crazy and competitive some of the rental markets are in cities all over the world right now.
And this support doesn’t have to cost the earth! Many transferees nowadays are confident, and tech-savvy enough to conduct their own search, and just need the right guidance to conduct it! Basic home search guidance can be provided for less than £1k per relocating employee, and more concierge home-finding support for less than £2k. This cuts down on initial temporary accommodation costs as it speeds up the home-finding process and avoids costly extensions.
Here’s how low-cost tech- and expert-driven home-search solutions can help employees find a home:
If you’re carrying out employee relocations, you’ll have a wealth of valuable data at your fingertips, both qualitative and quantitative, that may not be being used to its full potential.
Collecting and analyzing this data on a regular basis allows you to refine your corporate relocation policy, helping you identify and remove any cost inefficiencies and cut costs, and at the same time to improve the employee experience, avoiding failed relocations and reducing staff attrition.
Here are PerchPeek’s top three data analysis pointers:
When relocations are badly organized and/or provide little to no emotional support, employees are likely to experience high levels of stress and isolation. Their happiness level plunges, and mental health issues worsening are a real risk. And of course, when staff are feeling low, they’re going to struggle to perform to the best of their ability at work, so productivity also declines.
What’s more, often assignments fail altogether—the employee decides it’s not working out and returns to their original destination earlier than expected, without achieving the desired goals.
And when we say ‘often’, we mean it!
According to employment platform Globalization Partners, common reasons for relocation failures include lack of communication, unrealistic expectations, and family dissatisfaction. Uprooting a life and starting all over again can lead to homesickness, culture shock, and isolation. When movers don’t receive relocation assistance, these difficulties are far more likely to rear up.
Providing emotional support doesn’t have to cost a fortune, but it is essential in keeping employees happy and turning their corporate relocation into a success. Some suggestions include:
Far too often, employee relocations are managed on a case-by-case basis, and so involve the same information and advice on the relocation services process and the new city over and over again, as and when that info is needed. This wastes so much time and resources on the HR side, which is ultimately a waste of money when this time could be better spent on other business priorities.
Perckpeek has found that by simply documenting a lot of the repeatedly shared information into easy-access guides that are shared with movers at the relevant times, truly empowers movers to drive a lot of the relocation services process without additional support.
It can often be underestimated how much a mover themselves is willing to learn and make things happen for themselves, and simply providing the tools for them to do so can help them move much more quickly and efficiently, without needing a local expert or HR rep to do the work for them. This empowerment makes the employee more confident in being able to self-manage the process. These guides might include:
It’s worth spending a little time now—or indeed, using a dedicated service—to put these guides in writing. Once produced, they can be used for all relocating employees and will take a lot of weight off HR shoulders, allowing their time to be better spent elsewhere.
Many traditional relocation services providers charge clients based on the number of days of service, such as a two- or three-day home search, settling support, or school searching. If the job isn’t completed during that period, this requires additional time and extra fees as a result.
Additional days of relocation services can cost well over $1,000 (USD) per day, which can be extremely damaging to budgets for future movers. What's more, for services like housing or school search, searches are so competitive in markets such as London, Dublin, Berlin, and Amsterdam that these payments are required more and more frequently.
You’ll get more from your budget by switching to a supplier that charges based on results achieved, rather than the number of days spent on the project; with more impetus to get the job done, efficiency is higher.
While premium processing may expedite the visa application process, it comes with a hefty price tag that can make a large dent in your corporate relocation budget.
By opting for standard processing instead, companies can save significant costs while still ensuring that the necessary visa procedures are followed. Timely planning and effective communication with employees can help mitigate any delays and ensure a smooth relocation assistance process without the need for premium processing.
This typically means huge cost savings for clients while only minimally impacting the relocator experience (they still get their visa, which is, of course, the most important thing!).
Another (potentially) huge cost saving can be switching to only provide tax briefings to your relocating employees rather than paying for full tax returns in their home & host countries.
We don’t recommend this approach for assignments; however, for international new hires, ensuring their tax compliance is arguably their responsibility. Therefore, holding a briefing ensures they have the necessary knowledge and resources to navigate their tax obligations in their new country.
As well as the significant cost savings this can generate for companies, it also makes things significantly easier from an organizational perspective.
Below is a case study on how PerchPeek created a cost-effective relocation policy for a global tech company for under €5k per employee! This example demonstrates how €5k, while considered a small allowance in traditional relocation terms, can still have a significant positive impact for movers.
The problem to solve:
The €5k Solution
Facing challenges in hiring local tech talent, Intive turned to PerchPeek to tap into the global talent pool and relocate top tech candidates from overseas. The challenge was managing this with a slim budget of €5k per candidate.
Intive and PerchPeek developed a cost-effective relocation policy that included:
In total, the comprehensive relocation support came in under €5k per employee.
Hiring Top Talent Quickly and at a Low Cost
Intive advertised four positions on LinkedIn, highlighting their new relocation package, and received 996 applications from around the world. They successfully hired all 40 positions ahead of schedule and also identified 60 additional 'silver medal' candidates.
Remarkably, they achieved this without hiring any full-time staff to manage the process. Intive spent under €200k to relocate these 40 new hires from overseas, with the payback period for this investment being just four months from the project kick-off.
Testimonial:
“We would have massively missed hiring targets if it weren’t for PerchPeek. PerchPeek made it ridiculously easy to relocate people from overseas, and within six months, we’d managed to relocate an additional 40 hires for under €5k per hire. Not only this, but we had hundreds of high-quality applicants for the roles that advertised relocation in the title and are so, so happy with the results. We honestly thought that relocating employees would be a lot more expensive and time-consuming than it ended up being - in large part down to PerchPeek! Would recommend.”
- Uljana Naumenko, Real Estate and Workplace Experience Manager, Intive
Full case study
For more about how PerchPeek helped Intive meet recruitment targets in a quick, efficient andcost-effective way at <€5k per employee relocation, check out our case study!
Visit perchpeek.com for more on what we do and clients we’ve worked with!
As well as the challenge of making your relocation policy cost-effective, you’ll already know how tricky it can be to support relocating employees and how much time and resources it takes up for HR. That’s why outsourcing this support can lighten your load.
“Relocation is a difficult and time-consuming job, and PerchPeek took away all the work and made the process so much simpler. I would definitely recommend them; they offer support every step of the way.”
— Jemma Stapleton, INEOS
To find out more about how PerchPeek can support you by offering flexible, cost effective options combining award-winning technology with dedicated support, head to perchpeek.com!
Policy Templates
If you’d like to see some pre-built core-flex policy templates that have been used by some of the world’s largest and most innovative companies, feel free to reach out at relocation@perchpeek.com to receive one of these documents and “how-to” guidance.
Make Your Own Cost-Efficient Relocation Policy - Get a Free Cost Estimation
It can be tricky to know where to start with relocation expenses for employees, whether you’re setting up a brand new policy or validating and refining your existing one.
PerchPeek is more than happy to assist any HR team in constructing a highly flexible, cost-effective relocation policy. Simply provide us with a few key details about your business needs, and we’ll offer a free cost estimation.
We specialize in flexible policies to make your budget go further by focusing on what really matters, helping set practical staff relocation costs suitable for employees at all levels.
PerchPeek’s free relocation policy cost estimator tool can help:
Click here to leave us your details and get your free estimation!
We hope you’ve enjoyed reading this guide!
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