As the new year approaches, employers find themselves stuck between a rock and a hard place. The rock: the raging war for talent, which is shaping up to be the #1 challenge.
The hard place: the need to cut budgets in light of a possible downturn.
How can employers balance these conflicting goals? How can HR attract—and retain—talented people, while operating on a leaner budget?
It won’t be by cutting compensation. Studies show that employers will increase salaries by more than 4% in 2023—higher than previous years—to support recruiting and retention efforts.
However, there is one recruiting-related expense where you can most likely make substantial cost savings: your relocation program. Chances are, there’s plenty of waste in there, if you know where to look.
The best part: make the right cost-cutting moves, and you’ll actually strengthen your relocation program, rather than water it down.
Specifically, if you’re one of the many employers that currently offer lump sum disbursements, converting to a managed budget plan will save you big money and improve your employees’ relocation experiences.
Yes, this could be the gamechanger you’re looking for. Here’s why.
If your company offers lump sums, you know how they work: you give relocating employees a chunk of cash, then turn them loose to arrange their move. It’s up to them to get movers’ quotes, choose real-estate agents and deal with the myriad details that accompany relocation.
You may think it’s a sweet deal, because there’s little administration on your end. Plus, your costs are easy to budget.
Except, here’s where you’re bleeding money:
With lump sum plans, employees keep all unspent funds. Regardless of their relocations’ costs, you pay the full flat amount, forfeiting your opportunity to save.
Some employees do a great job of organizing their relocation, but others drop the ball, resulting in stressful and sometimes delayed relocations. When employees miss their start date or show up distracted and unhappy, that costs you, too.
Because you don’t oversee your employees’ relocations, you won’t collect valuable data that can help you trim costs going forward.
Why would any employer sign up for this, when a sound managed budget plan eliminates these drawbacks, without creating more work for you?
In some ways, managed budget plans are like lump sums. Benefits are flexible, so employees can use them as needed, up to the maximum amount.
However, rather than hand those funds over upfront, expenses are paid as they’re incurred. But you don’t need to do that, because most managed budgets are handled by relocation providers—and cost-conscious providers build all kinds of saving vehicles into their programs, including:
Savvy relocation providers maintain networks of quality, pre-screened vendors that work at discounted rates in return for repeat business. Not only do services cost less, but vendors must perform to stay in the network—minimizing the chance of moving mishaps.
Instead of letting employees sink or swim, providers match employees with relocation specialists who offer guidance and troubleshooting services. As a result, employees relocate with minimal drama—and show up for work grateful and ready to roll.