High Employee Relocation Costs ??
Have you ever moved for a new job? Or has your current job ever asked you to move somewhere else?
If you have, then you’re not alone. Employee relocation is a surprisingly common phenomenon: all over the world, every single day, dozens or even hundreds of people are moving so that they can work the job they prefer—whether because they’ve already got it and the company is relocating, or because they’re about to start a bright new career. In both cases, the company is there to help the employee: they will cover costs, help finance the journey, and even contribute to transport (that is to say, by lending the employee a car) once they have arrived in their new home.
Nevertheless, employee relocation incurs many costs. This makes it difficult for many employers to consider compensating someone for the opportunity cost of moving to live in a new area. In fact, these costs can actually be quite high, running up into the thousands of dollars. In some cases, employee relocation might even cost tens of thousands of dollars.
Now, let’s imagine you find yourself in one of these situations: you’re a boss, and there’s a candidate whose CV and interview really impressed you. You’ve offered them the job; they’ve accepted. Now there’s only one step left: to figure out how you’re going to pay for the new employee to move across the country.
Well, the best cure is prevention—and so, we’re going to begin with what you can do before this scenario happens, so that you can avoid it.
How can you avoid relocation costs?
First, seek to find local workers, who live in the area. Not only will this eliminate the possibility that they’ll need to pay to go to their new course of work, but local workers (even if they’re not working for your branch, franchise or regional section specifically) will be familiar with the area, which, as a general rule, tends to make things more efficient.
Second, do a careful job of screening out candidates for relocation. Should you really be considering moving an employee across the country if they’ve implied that they’d like to start looking for a new job soon? What about if they have very young children who shouldn’t be moved around too much?
Also, even if an employee performs decently at their job, that doesn’t mean you need to relocate them. It’s perfectly reasonable to find that the quality of their work, while high, isn’t high enough; or to suspect that they won’t fit in with the workplace culture of the other location. In cases like this, you might be able to hold off on employee relocation until you find an employee who’s a better fit.
Third, make sure potential candidates are aware of every condition of their relocation. Are you going to offered them benefits or incentive packages? Will you help subsidize their rent or housing? What city would they be located in, and would they have good access to transport services? If you’re truly considering having them work in the other location, write up a detailed contract and have them read it. They might not agree with all the conditions, and as such might disagree to take the job outright—even if they’ve previously agreed to take it.
Write a list to evaluate the costs of employee relocation
And now, to the meat of the matter: it’s time to evaluate whether or not the costs of employee relocation justify the displacement of a given staff member. To make this decision, there are several factors you’ll have to take into account. In particular, you’ll have to take a look at what the costs are like for other businesses in your sector. To do so, look up statistics based on your area. How much are other employers paying for relocation? When looking up this information, be sure to take all the relevant factors into account, including company size, number of employees, locations (both for departure and arrival), and how much other companies pay their employees in general.
You’ll need to have a full accounting sheet (credits and debits) before you make any solid decisions. Calculate every possible expense, to the best of your ability. Also be sure to add additional funds for errors, mistakes, and unforeseen expenses. Don’t forget to add taxes, either; taxes for relocation can significantly increase your costs, and might turn an otherwise manageable move into something that simply isn’t worth the expense.
In writing this list, you’ll also have to take into account how many days of lost work will occur as a result of the move. For a move within the same city, the opportunity cost will be reasonable; for a move into another state, you’ll have to pay a bit more, but will have the employee up and working again in a few days. If, however, you’re bringing an employee to another country entirely, then you’ll have to give them more time.
Depending on what you’re providing as the employer, they will need time to find housing, borrow or buy a car, sign their kids up for a new school, and get properly settled into their new home. In such cases, their spouse will also need to find a new job. Your company’s guiding principles will affect how much of these monetary costs, you, as an employer, will absorb. For example, if your company’s founding principles state that it will do everything it can for its employees and their families, then perhaps their standard procedure has been to help employees’ spouses find jobs, subsidize language lessons for the family, and pay for some of the children’s tuition. In some cases, the employer might agree to hire the spouse into their ranks; if this is the case for your company, you might even find it to be a net benefit.
Finally, in writing the list, you’ll have to include the cost of moving itself. This includes the costs of packing everything up, emptying out the office—distributing materials to other employees, wiping the data and the logins on the computer—and having everything shipped to the new location, whether it’s by train, plane, or moving truck. In some cases, you might pay for moving pods instead (in which you can pack your things up into a moving pod and transport them yourself); these can also rack up a hefty fee, so be careful.
Employee relocation can be difficult if you’re not using the right resources. The right moving company, for example, can make all the difference. You won’t have to worry about boxes damaged or lost during shipping, you can expect the company to come on time, and you’ll know that all the staff will be working in a professional manner. If you’d to relocate your employees to or from the Texas area specifically, then you can consider hiring a company like the M&M Moving Company. They will help ensure that the move is as smooth as possible, so that the relocating employee has one less thing to stress out about.
Examine your list of expenses
Once this list has been drawn up, you can scrutinize it carefully to see if there are any areas where you can save money. In some cases, you might realize, after writing the balance sheet, that sending out an employee to another location simply isn’t worth it for you.
Alternately, you might realize that it might be less expensive to move the employee to another location than was originally planned. They can be moved to another region or state, or even in Canada, if you live close to the border. Also give some thought to placing them in a less populated area, where property values are less expensive. If they’re able to deal with the commute on their own, then you won’t need to pay so much to rent out their housing. The employee can transfer some of the costs of the transport burden onto their own shoulders.
If you’ve decided that employee relocation is indeed worth it, take a good look at the contracts you’ve written regarding employee relocation. Do they offer competitive packages for your employees—which will be to the detriment of you, the employer? Do they offer no benefits at all, and consequently no employees are willing to come forward for relocation? Don’t be afraid to meet with a specialized consultant or a business lawyer. They will help make sure that your contracts are fair, for both you and your employees, and they will help you evaluate any points where you can save money. After all, you might have added clauses to the contract which cost more money for you, but without giving you anything of value.
The cost of employee relocation: tough decisions ahead
If you’re considering moving your employees to another location, then you already know that doing so can be difficult and stressful. You’ll have to take a number of factors into account when deciding how much the move will cost your company. However, once you’ve evaluated the costs and chosen the perfect employee, you can rest easy: your hard work will soon be paying off. There’s only one step left after that: hiring the M&M Moving Company!