For Relocators
Understanding Relocation Costs: A Comprehensive Guide
November 28, 2024
Read More
Hiring top talent from abroad is becoming a central part of talent strategy in order to fill open roles in developed economies. However, it can be really difficult to get internal buy-in for investment and engagement in a strong relocation programme.
Understanding how and why the relocation experience is poor for the majority of assignees is crucial for People Leaders, to use this knowledge to obtain internal buy-in for global mobility, elevate relocation policies and improve employee support. That’s why we’ve created a comprehensive guide on this topic!
In this guide, we take a look at:
Here we have a brief summary of each section, but for the full lowdown on identifying how the relocation experience is often so bad for employees, why that can have a catastrophic impact on employers, and how to make the experience so much better, take a look at the full report!
1 - Lack of knowledge - about relocating, and the destination itself
For most relocators, there’s a massive knowledge gap around processes to follow, as well as the destination city. And without support, the onus is on individuals to find the answers to their many questions - which is fraught with problems. The huge amount of conflicting information online leads to stress and confusion, it’s hard to know which sources to trust, and it takes ages!
2 - Competing in increasingly challenging rental markets
In many cities, demand for properties is hugely outstripping supply, meaning competition is fierce and prices are skyrocketing. When assignees go it alone, unfamiliar with the nuances of the local market, their chances of securing a home quickly and easily are far, far lower, meaning a much more stressful and lengthy process and more money spent on temporary housing.
3 - Difficulty of managing many fragmented processes
There’s so much more to a relocation than getting a visa and finding a place to live! Relocators may need to sort out 25+ services, from shipping to opening a bank account. Younger employees who’ve never moved before will be grappling with these processes for the very first time. And to make matters worse, each process may be handled by different suppliers on different platforms!
4 - Huge amount of time and effort needed
It’s a massive endeavour to pack up a life and start over, especially when doing it unsupported. Assignees need to find the time to search for a home, find suppliers for services and compare quotes and SLAs, and manage their budget effectively. Of course, this is all time and headspace that could be better spent on work - especially for those about to start a brand new role!
5 - The current support solutions often don’t work
For those employees that do receive a relocation support package through their company, the actual support on offer is often not fit for purpose. Fully managed packages are super expensive and so only available to a tiny proportion of employees, half-day consultant support really isn’t enough to achieve anything, and cash lump sums leave assignees to fend for themselves.
1- Wasted budget
Poorly managed relocations have an adverse effect not only on HR Teams’ time and resources, but their budgets too. And of course, in 2023 we’re seeing budgets being cut left and right, making it even harder. Here are the three most common pitfalls:
Cash lump sums - poor cost control and management
This is a very common band-aid solution to helping someone relocate, but one with many pitfalls and frequent escalations coming back to HR teams. It’s tricky to work out the right amount of money to provide. If it’s too much, that’s simply wasted money that employees then use on irrelevant things. If it’s too little, employees may struggle to find cost-effective providers and in the end will need to request extra budget, which further hurts the wider organisation's bottom line.
Providing services that aren’t needed or wanted
Even when assignees receive defined relocation support, costs are often wasted. We’ve worked with a client that provided shipping as standard. One relocator with very few belongings had nothing to ship, so ended up buying bicycles in the UK to try to fill her container! If People leaders are seen to be wasting budget this way, it’s bound to hurt their credibility within the company, as well as their balance sheet!
Extra costs for additional support and services
When assignees are responsible for managing their relocation process, their budget and the suppliers they use, it’s easy for things to go wrong. Extra costs often crop up, such as a longer-than-expected stay in temporary accommodation, or access to costly local consultants for much-needed relocation support, which hurts People leaders’ budgets unexpectedly.
When relocations go badly, you don’t just risk employee unhappiness and lost productivity. More seriously, some 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.
Crucially, failed assignments are a big blow to businesses. Repercussions include:
As you’ll know well, a company’s people are their most important asset. As you may not know, failing to provide adequate relocation support means you’re at risk of losing yours, in two ways:
“Poorly crafted relocation packages are a turn-off to new hires and established workers alike. If you’re not careful about managing your relocation assignments, you may end up with employees leaving your company in search of better options.” - Globalization Partners
Over 30% of UK employees have left a job because they were denied a relocation opportunity - Wakefield Research
Not offering relocation opportunities, or neglecting to provide relocation support:
There’s a serious worker shortage in various industries across the world:
Pitfalls for People teams:
1 - Offer real support, not just a lump sum
Our top piece of advice to improve the experience and your recruitment efforts is to offer actual support, whether in-house or outsourced to a relocation company! This offers:
2 - Align with transferees and manage expectations from the start
When it comes to arranging a move, the many ever-evolving nuances between markets mean assignees’ initial expectations are often out of touch with reality, and here frustration arises. It’s a great idea to arrange an advisory call at the outset to manage expectations, and share data on costs and timelines - this way, you’re more likely to avoid issues down the line.
3 - Use tech capabilities to make consultant support even better
More and more smart relocation solutions are appearing, suitable for an increasingly tech-savvy workforce - augmenting real life expert support with amazing content and handy tools. A basic suite of tech tools massively improves the relocation experience, and they’re often very straightforward to implement.
They may include:
4 - Help with home-finding in today’s crazy rental markets
According to a PerchPeek survey, nine out of 10 respondents say home-searching is the most difficult part of a relocation. And that’s hardly surprising, judging by just how crazy and competitive rental markets are in cities all over the world right now.
How tech- and expert-driven solutions can help relocating employees find a home:
These are low-cost solutions that are available through many relocation companies if not catered to internally!
5 - Don’t neglect emotional support!
Providing emotional support doesn’t have to cost a lot, but is essential in keeping employees happy and turning their relocation into a success. Suggestions include:
Here you can find PerchPeek’s full report, where we dig into all the details on why the relocation experience sucks for employees, why that’s a disaster for their employers, and of course, how to massively improve the experience easily, and without breaking the bank!
We’d love to hear more about your mobility program. Chat with one of our account managers to find out how our platform can support your team
Just add your details here; we’ll be back in touch as soon as possible!
We’d love to hear from you with any questions or concerns about your existing employee mobility program, or we'd love to help you start one!
The best first step is finding out how our platform can best support your team and all your needs so simply fill out your details and we'll be in touch as fast as possible!
We can't wait to assist with all of your company's relocation needs.
.webp)
