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.
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.
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.