Cutting Relocation Costs in the Age of Inflation

Right about now, employers are hammering out their 2024 budgets—and, thanks to inflation, things aren’t looking so good.



For starters, employers are budgeting an average wage increase of four percent. For many, that’s higher than last year. As for health insurance, that’s even worse, with premium increases averaging 8.5%.      

Supplies cost more. Loans cost more. The cost of doing business costs more. Is there any expense that employers can actually cut instead?

Well, yes. Yes, there is: their relocation program costs. There are simple ways to slash relocation expenses, without compromising benefits or the employee experience.

If you want to save money on relocation in 2024, this is how to do it.


Demand Supplier Discounts    

Some relocation providers negotiate volume discounts with the movers and suppliers in their vendor network. But others actually add commissions—aka “mark-ups”—to every supplier’s invoice: movers, short-term housing, the works.

So, take a good, hard look at your relocation provider’s invoices. If the supplier charges seem higher than they should be, it may be because they include hidden mark-ups.

If you don’t know, ask your provider how its supplier pricing works. Don’t let them tell you the industry is all commissions-based—it’s not. (At UrbanBound, for example, we charge a simple software licensing fee.)

Bottom line: a provider that profits from your expenditures will never help you save money, because the more you spend, the more they make.

The good news is, you have a choice.

For more about supplier discounts vs. markups, read this.


Review Your Relocation Reports   

Next, collect your relocation program reports year-to-date and review your spending. Are you over or under budget, collectively, and per employee? How is your money being spent?

Wait…your relocation company doesn’t automatically provide reports? Ask. Because you can’t possibly manage your program costs wisely without them. Or, for that matter, budget effectively.

For example, when reviewing program costs with one of our healthcare clients, we noticed that their short-term housing costs were high. With a little research, we were able to identify the culprit: their hot housing market. Because demand outpaced supply, incoming employees were staying in short-term housing longer than average, until they could purchase a home.

Our recommendation: lift the cap on house-hunting trips, so employees can find permanent housing faster. They did, and it lowered their costs—all because eyes were on those reports.

To see what your relocation reports should look like, click here.


Stay up to date

Subscribe to the blog for the latest updates

Upgrade from a Lump Sum to a Managed Budget Plan   

Lump sum plans are popular, with good reason. They’re easy for employers to budget, they offer employees flexibility, and they lower exception requests. Still, they’re not as cost-effective as they could be.

The fact is, managed budget plans offer all of these benefits, too—while providing employers with potential cost-savings of $2,000-$3,000 per move.

Here’s why: with lump sum plans, employees keep any unspent funds to use however they like. With managed budget plans, employers keep those unspent funds instead.

Plus, managed budget plans offer employees moving support, including the services of relocation specialists and access to the provider’s (hopefully discounted) supplier network. That not only saves money but yields superior relocation experiences.

Not ready to give up your lump sum plan? With UB Marketplace, you can keep it, while giving employees access to UrbanBound’s discounted supplier network and relocation specialists, too.

For more about lump sum vs. managed budget plans, watch this quick video.


Switch to a Software-based Relocation Provider    

Without question, the single, most effective way to slash relocation costs is by moving to a tech-powered provider. You just can’t beat the cost-efficiencies of technology.

Specifically, tech-based relocation providers have lower labor costs, pay less overhead, and enjoy greater efficiencies—so they can charge clients less and stay profitable.

Need to see some numbers? When employers switch from conventional relocation companies to UrbanBound, they reduce their spending by up to 66% per move. Plus, they give their employees access to slick online tools that make everything easier.

In fact, our clients’ relocations come in under budget 94% of the time.

So, if you truly want to cut relocation costs next year, get up to speed on relocation technology.

Because while some cost increases are unavoidable, relocation isn’t one of them.

Learn more about how UrbanBound’s relocation solution can save you money in 2024 while improving your employees’ relocation experience.

Human Resources Today