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How to Maximize Your Relocation Program Budget

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In this presentation you will learn:

-Why you need to re-examine your relocation budget in 2019
-The variables and hidden costs to consider when setting a budget
-5 ways to do more with less by retooling parts of your relocation program
-Real-life examples of competitive, cost-effective employee relocation packages

Published in: Recruiting & HR
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How to Maximize Your Relocation Program Budget

  1. 1. TODAY’S HOSTS MICHAEL SCHWARTZABBY BAUMANN ACCOUNT EXECUTIVEMARKETING MANAGER
  2. 2. TRENDS IMPACTING THE INDUSTRY 5 WAYS TO DO MORE WITH LESS REAL-LIFE POLICY EXAMPLES TODAY’S AGENDA VARIABLES & HIDDEN COSTS QUESTIONS
  3. 3. WHY ARE WE HERE FULLY COVERED CASH HAPPY MEDIUM DATA-DRIVEN AGE: HR MUST PROVE ROI RELOCATION COSTS DUE TO TAX REFORM 4% UNEMPLOYMENT RATE
  4. 4. DO YOU KNOW WHAT YOU SPENT ON RELOCATION LAST YEAR?
  5. 5. HOW WOULD YOU FIND OUT WHAT YOU SPENT ON RELOCATION LAST YEAR? A. PULL ONE REPORT (SELF-SERVICE) B. PULL MULTIPLE REPORTS AND MANIPULATE IN EXCEL (SELF-SERVICE) C. REACH OUT TO OTHER STAKEHOLDERS & HAVE THEM SEND YOU REPORT(S) D. I DON’T HAVE THE RESOURCES TO DO THIS
  6. 6. IT SHOULD BE AN EASY QUESTION TO ANSWER
  7. 7. SITUATIONAL FACTORS Lease breakage fee Security deposit Closing costs Marketing a home sale RENTERS VS. HOMEOWNERS SOFT COSTS VARIABLES & HIDDEN COSTS Family size & children Distance of travel Size of house, personal belongings, number of cars/pets Special circumstances: ATV, antique doll collection Employees distracted at work or leaving early to plan their relocation Internal teams coordinating logistics Relocation management company costs Tax gross ups ADD-ONS
  8. 8. 5 WAYS TO DO MORE WITH LESS
  9. 9. 1. TIERED RELOCATION POLICIES Build tiered relocation policies to apply to different populations
  10. 10. NEW HIRE VS. CURRENT EMPLOYEE EMPLOYEE LEVEL OR SALARY BAND RENTER VS. HOMEOWNER Offer different policies for current, tenured employees versus new hires Build tiered relocation packages, scaled to different types of employees (new hires, managers, C-suite) Provide different benefits based on whether an employee owns a home or is a renter
  11. 11. USING DATA TO CREATE TIERS
  12. 12. USING DATA TO CREATE TIERS
  13. 13. 2. RIGHT-SIZE THE MOVE Work with a wide range of supplier-types to accurately service your employees
  14. 14. FULL-SERVICE VAN LINE CORPORATE HOUSING SMALL SHIPMENT OR CONTAINERIZED MOVE ALTERNATIVE HOUSING
  15. 15. 3. GET CREATIVE WITH GROSS UPS Covering the tax burden on all relocation benefits provides the best employee experience—but not every budget can account for this. How do you cut costs while still providing a stellar end-user experience?
  16. 16. 2 Gross up on the most impactful services Only gross up on the benefits your employees will most likely need for their move: household good shipment, temporary housing and final destination travel. 3 Gross up for the most mission-critical employees Provide gross up benefits to employees you hunted vs. the employees who found you. Often times, candidates seeking a new job want to relocate compared to other employees who you ask to relocate. 1 Avoid gross ups altogether with home sell tax benefits US tax law still preserves the tax excludable status of corporate home sale programs (BVO & GBO). For cost-conscious companies looking to maximize the purchasing power of their relocation budgets, going “all in” on a BVO or GBO benefit makes a lot of sense.
  17. 17. 4. DISCARD, DONATE & SELL Reduce the size of your employee’s household good shipment
  18. 18. ORIGINAL QUOTE $36K* DISCARD, DONATE & SELL WEIGHT = COST *including gross up FINAL COST $15K* *including gross up
  19. 19. 5. MANAGED LUMP SUM PROGRAMS Maximize flexibility & support for employees (while saving money)!
  20. 20. SAVE MONEY & ELIMINATE RISK OF OVERSPENDING Budget Capped spending but no opportunity for savings Lumpsum ofcash MOVE 1 MOVE 2 MOVE 3 MOVE 4 MOVE 5 MOVE 6 MOVE 7 MOVE 8 MOVE 9 Budget Capped spending with opportunity for savings Managed lumpsum MOVE 1 MOVE 2 MOVE 3 MOVE 4 MOVE 5 MOVE 6 MOVE 7 MOVE 8 MOVE 9 MOVE 1 MOVE 2 MOVE 3 MOVE 4 MOVE 5 MOVE 6 MOVE 7 MOVE 8 MOVE 9 Budget Traditional Program Uncapped spending
  21. 21. APPLYING THESE COST-SAVING TIPS TO REAL-LIFE POLICIES
  22. 22. POLICY EXAMPLE #1 VP/Executive Level Policy ✓ 3 day home-finding trip with destination services ✓ Home sale closing costs via BVO COVERED IN FULL* ✓ Household goods move with discard & donate service ✓ Final move travel ✓ Auto shipment ✓ 30 days short-term housing ✓ 30 days of storage $5,000 CASH ALLOWANCE* *company covers the gross up
  23. 23. POLICY EXAMPLE #2 Manager Level Policy - Renter $7,500 CASH ALLOWANCE ✓ Final move travel* COVERED IN FULL ✓ Shipment of household goods* ✓ Rental assistance *company grosses up on shipment of household good and final travel only
  24. 24. POLICY EXAMPLE #3 General Policy for All Employees ✓ Home-finding trip with area tour ✓ Pet shipment ✓ Security deposit ✓ Move-in fees ✓ Furniture set up UP TO $15,000 ALLOWANCE* ✓ Household goods move (employee can choose supplier type) ✓ Final move travel ✓ Auto shipment ✓ 30 days short-term housing (corporate housing or AirBnB) ✓ 30 days of storage *company covers the gross up
  25. 25. AVG SAVINGS PER MOVE OF MOVES ARE UNDER BUDGET 94% $1,461 IN THE SPIRIT OF COST CONTAINMENT 71% UrbanBound is more than just technology, we’re redefining what it means to be a relocation management partner. Service and a great experience is always our first priority, but saving money is icing on the cake. OF CLIENTS SAVE MONEY
  26. 26. ONE-SIZE DOES NOT FIT ALL: CREATE TIERED POLICIES RIGHT-SIZE EMPLOYEE MOVES WITH A DIVERSE SUPPLIER NETWORK TAKE ADVANTAGE OF HOME SELL PROGRAMS & GROSS UP WHERE IT MATTERS ENCOURAGE DISCARD, DONATE & SELL MANAGED LUMP SUM PROGRAMS RELOCATION TECHNOLOGY BRINGS IT ALL TOGETHER IN SUMMARY
  27. 27. QUESTIONS?
  28. 28. CHECK YOUR INBOX FOR A COPY OF THE SLIDES & RECORDING TAKE THE SURVEY REQUEST A DEMO ABBY BAUMANN MARKETING MANAGER ABAUMANN@URBANBOUND.COM MICHAEL SCHWARTZ ACCOUNT EXECUTIVE MSCHWARTZ@URBANBOUND.COM
  29. 29. THANK YOU!

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