28 Apr The Many Ways of Reducing your Talent Mobility Program Costs
Has ROI (return on investment) costs on talent relocations changed in the post-pandemic world? It remains to be seen how global mobility service costs will change, but COVID-19 has accelerated the process for companies and global mobility professionals to find out how they will make adjustments in their budget. One way to look into it is the fact that there’s no such thing as one size fits all. Granted, how can one save costs while still achieving their talent management and business objectives.
TRC Global Mobility came up with some useful ways to reduce mobility program costs. Here are some of them:
- Analyze your historical costs
Go back to your assignment and relocation costs for the past few years and look for any patterns. Contact your relocation management company to help you crunch the numbers. After doing so, probe further to check where you can save.
- Assess your current policies
Review both your domestic and international policies. A traditional expat assignment will usually cost more than a permanent transfer or a virtual assignment.
- Ask your relocation management company to review your policies
Ask a relocation management firm you are working with to review the office policies and benchmark them against your peers. Ask for specific cost-saving recommendations. You want to offer sufficient benefits to remain competitive and even to retain a leg up, but you do not want to be overly generous or to offer benefits that are no longer necessary.
- Talk to your mobile workforce
Learn more about your mobile employees’ relocation experience, through both survey data and follow-up conversations. Gathering real-world information can help you to refine your program and reset the balance between cost and customer experience.
- Think about how remote work will affect your program and budget
HR professionals will need to make a strong case as to why an employee needs to relocate physically. In some cases, remote work with as-needed business travel will accomplish the same business objective at a lower cost. In other cases, it will be essential or desirable to have the employee physically on site. Be forewarned about how an out-of-state or out-of-country office can create compliance headaches for your company and the employee.
- Use policy tiers thoughtfully
Tiers are typically differentiated by job grade or homeowner/renter status. There is also a trend to have a dedicated “executive” tier for higher-level employees. There are mission-critical employees who receive the most generous packages, both as an inducement and a reward. New hires and employees on rotational assignments generally receive a less generous package.
- Rethink allowances
Consider reducing or re-aligning relocation or miscellaneous allowances, rather than offering a flat amount, to follow the logic of your policy tiers. For developmental assignments, some allowances might not be necessary at all. A more aggressive (and politically challenging) change would be to scale all of your allowances at all levels down one notch.
- Get a handle on exceptions
Approving policy exceptions can increase relocation costs markedly. Track all approved exceptions and look for patterns. In some cases, repeated exception requests could mean that benefit is inadequate and the company should revisit it.
- Try a discard and donate program
Working proactively with relocating employees to help them discard, sell or donate items before the move can reduce a company’s moving costs from 5 to 15 percent, maximize the employees’ charitable deductions and help worthy organizations as well.
- Approach COLA more strategically
COLA (cost of living allowance) varies among your international assignees depending on job levels, importance and location. Some companies also trim the COLA allowance once the employee is fully established in the host location. It is advised that COLAs be used sparingly and for dramatic location differences only.
- Consider program caps
Some program options, including managed cap, lump sum and core-flex, incorporate caps by design. If you use one of these programs, consider whether you can adjust any of the existing caps. You can also consider imposing a salary ceiling on international allowance calculations and cost of living adjustments.
- Rethink per diems
Evaluate your per diem calculations and make sure they reflect current conditions. Employees on short-term assignments who are living in apartments with kitchens do not require as generous a per diem as business travelers. The short-term assignees might opt to eat all of their meals out, but your company does not need to subsidize this choice.