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Adjust for Market Conditions/Trends
Market conditions have an impact on your relo budget. For example, the pandemic forced housing shortages, price inflation and supply chain interruptions. This adds stress on employers and employees in the form of higher prices and longer wait times.
Use data from previous years to account for an appropriate response to these changing market conditions. More often than not, it will take more money to ease the burden for you and your employees - budget for it!
Home-finding trips that once resulted in a purchased or leased home during a 3-day trip now require multiple trips due to overly competitive markets. Household goods shipments that once arrived in five business days now require 10, 15 or more days, forcing families into longer, more expensive short-term housing arrangements.
Whatever the need, your department needs to be adequately prepared to meet it. And that often requires additional funding. Don’t sacrifice your employee’s satisfaction with their move - and their new company, for lack of foresight in budgeting.
Be Strategic - Consider a Combination of Benefit Types
It’s easy to think of ways to spend money, but what about opportunities to save on relocation expenses? Using your relocation analysis, get strategic! Consider offering a combination of benefit types to suit your employees while saving additional coin.
Offer a fully covered or managed budget for expenses like short-term housing, household goods shipments and home-finding trips. Take care of the incidentals and lesser-utilized benefits with a stipend. Providing a lump sum can help employees with expenses like utility deposits, connection fees, driver’s license fees and more! It’s a nice gesture that goes a long way!
And don’t forget about taxes! Ensure your employees are covered with Uncle Sam for the relocation benefits they receive. Tax gross-ups are essential in ensuring your employees remain happy with their relocation experience - end of the year tax surprises are never fun!
Budget a Contingency Fund for Exceptions and Negotiations
You can’t anticipate every need, but you can plan for it. The more you analyze your data, the better prepared you are to meet the needs of your employees.
Every situation is unique and may require a different approach. If your policies are written strategically (thanks to the outstanding job you did on your analysis), you shouldn’t have many exceptions. When you do, however, it’s essential you have a contingency fund to handle the extraordinary request.
Don’t expect all employees to take their relocation benefits as is either. Be prepared for negotiations with additional room in your budget to ensure the employee is happy and well taken care of. It’s often much less expensive to negotiate on relocation benefits than it is on salary - salaries are an annual expense whereas relocation benefits are paid only once.