For Relocators
Understanding Relocation Costs: A Comprehensive Guide
November 28, 2024
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Relocations and graduate schemes are apparently the great divider of the Global Mobility Industry!
As everyone knows, grad schemes often require movement across multiple locations, so it’s natural relocation support is needed to find the individuals housing, organise transport and rights to work locally etc. What you might not know is that there is currently incredible variation in the support given by companies to their interns and graduates.
From PerchPeek’s discussions with Global Mobility Leaders, we learned that companies support for graduates range from a very slim cash lump sum to a very generous £25k full package policy.
So we're going to dive into these strategies, and feedback what's the best outcome for graduates. We've helped 1000s of graduates at many of the world's largest companies, so we know a thing or two about getting the best results for early career movers!
Companies giving over £20k support packages to interns are often doing so in line with their traditional RMC relocation policies, including large shipping allowances, expensive temporary accommodation allowances, and consultant support delivered over email or phone call.
The challenge with this strategy is that the company is very likely to be spending this very generous amount of money on items that the grads don’t necessarily need or want.
Large shipping allowances, often in the multiple $1000’s aren’t always what a graduate, who’s just moving out of home properly for the first time, needs - they often only have a suitcase to bring with them.
Highly expensive temporary accommodation support also often forms a major part of the cost - and given their early stage salary bracket, graduates are not necessarily going to be grateful for such a high amount to be spent on accommodation for them, when they are likely to see other items that would be far higher on their spending priority list than extra deluxe accommodation. If the accommodation is safe and functional - they’d probably like the money put elsewhere (into their paycheck perhaps…)
PerchPeek consultations for companies with such policies will regularly feed back that the companies could make major savings here and maintain both safety and satisfaction of the relocators very easily!
At the other end of this spectrum, companies that would give reasonably generous relocation packages to standard employees, were at times giving just an unstructured cash allowance to the individuals - the argument being something along the lines of “It’s fairest. I can’t do much with the budget I have so they will have to use the cash and figure it out!”
The sad irony with this situation is that, for young professionals who are moving to a new city for the first time, advice and guidance can be more important than it is for anyone else! For a first-time-mover, a lack of knowledge and support can make life really difficult, and the early impression they receive of their new (and often, first) employer can be very disheartening. They need someone to turn to for advice and answers to their questions, or at least some guidance of where to go to get their answers! They will often be among the employees most likely to make mistakes in their move, and can have a higher probability of causing their HR & Mobility teams a headache!
As with all relocation policy strategy, the key is to understand your assignees, and personalise their package to their needs, Broadstrokes don’t tend to work in relocation.
With these relocators, the most important things to note is that they don’t expect a ton of money, and they’re often very capable of taking care of many items on the relocation checklist themselves, however what they do need more than anything is someone guiding them in the right direction. Not heavy handedly, just advice on best steps and cautions against the mistakes they could make, and tailoring the experience enough to make them feel supported and valued.
There is no problem with companies giving their employees super expensive support and taking care of their every possible financial need on their journey, but spending money on high end temporary accommodation or shipping containers should come well down the pecking order of priorities. These employees, on early stage salaries, probably aren’t going to be moving into plush 1-bed apartments, with a shipping-container’s worth of furniture to come with them, after their 4 weeks in temporary housing.
These are also the self-service generation, meaning that they also are often very happy to go and do a home viewing themselves after work, instead of going on a 3-day home search tour with a consultant in a car! That’s another $3k saved, for a more enjoyable experience!
Some of the great, low cost ways of providing great relocation support are:
These can all be covered for under $1000 total (don’t let your provider tell you differently!), and they provide massive value for the individual, in removing stress and preparing them with the knowledge to enjoy a great relocation experience. Don’t waste the $2k by just giving it in cash, and definitely don’t waste the $20k on a traditional relocation policy format, as it won’t provide value in the ways the individuals need it!
Once the basics of advice, guidance and support are covered, then policies that can flex to the needs of the individual, are optimal. This might look like a Core-Flex policy, where the above options are included in the Core, and a flex budget is given to allow the individual to tailor the move further to their requirements.
Note - Do NOT use a Core Flex policy that heavily restricts service options that the relocator can choose to just high-end, high-price options. That again would be making the policy not fit for purpose - these people want lower-budget options to stretch their money further. Points-based Core-Flx relocation policies are often culprits of this - where you can choose your provider as long as it's one of 5 super pricey options...
Throwing money at problems is not often the best solution in HR. Personalising Global Mobility policies to your graduates and interns will save companies a lot of money, and make your new starters feel fantastic about the company they’ve decided to work for.
If you need proof of whether this strategy works, and that we actually know what we're talking about - take a look at the PerchPeek Trustpilot score!
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