Ongoing Inflation. Chronic supply chain shortages. The looming threat of recession. For many businesses, cutting costs is a 2023 imperative—and that means cutting relocation budgets, too.
After all, more than 80% of CEOs are bracing for a recession. According to the Wall Street Journal, companies are actively seeking ways to cut costs: reevaluating suppliers, renegotiating contracts and reducing spending in any way they can.
However, WSJ also finds that employers—overwhelmingly—don’t want to cut their workforces. Or step back from their recruiting goals, since many remain in dire need of talent.
If you’re one of those employers, how do you thread the needle? How do you downsize your relocation expenses while aggressively recruiting?
3 Ways to Handle a Shrinking Relocation Budget
There are a number of ways to respond to a dwindling relocation budget, but some make more sense than others when it comes to supporting your recruiting efforts.
For example, you may be tempted to slash your relocation program across the board—tier by tier, benefit by benefit, in one clean sweep. But then, your recruiting efforts will take a hit, because your job offers will become less attractive.
Or, you can stop offering relocation packages altogether for most positions, limiting benefits to a chosen few.
But that means limiting job searches to your local candidate pool. For industries that require specialized training—say, healthcare—that will make recruiting infinitely harder, and open positions will remain open even longer.
Or, you can do the smart thing—the thing that won’t hurt your recruiting efforts. It’s easier than you might think, and it may give you a competitive edge just when you really need one.
How to S-t-r-e-t-c-h Your 2023 Relocation Budget
Rather than cut relocation benefits, why not work on cutting relocation costs? Frankly, it may not be too difficult, as many relocation programs are teeming with waste…once you know where to look.
Chances are, you can design a significantly leaner program without compromising benefits or services—and possibly even improving them. Here are three ways to get started.
1. Switch to a Managed-budget Policy
Whether you offer a traditional, fully-covered relocation policy or a modern lump sum plan, upgrading to a managed-budget policy is one of the best money-saving moves you can make.
Managed-budget policies blend the versatility of lump sum plans (i.e., employees can use their benefits pretty much however they wish) with the superior service of fully-supported relocations.
However, unlike lump sum policies—which allow employees to keep all unspent dollars, a really unwise idea—unspent managed-budget funds stay in the employer’s account. And unlike fully-covered plans, they gently steer employees toward cost-effective choices.
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2. Avoid Relocation Companies that Use Mark-ups
Did you know that many traditional relocation companies add fees to each item on a client’s invoice, including moving costs, airplane tickets, and short-term housing? They’re not interested in helping you save money. On the contrary, you’re their cash cow!
In addition, some relocation companies get commissions from vendors, which also drives up your costs. Some are legally affiliated with the suppliers in their network—a conflict of interest that doesn’t benefit you.
Now’s the time to find out if your relocation company marks up its invoices…collects commissions…or is related to its vendors. If the answer is yes, it’s time to take your business elsewhere—stat.
3. Upgrade to a Tech-based Relocation Company
Finally, if you use a traditional relocation company, consider switching to an online relocation provider. Software-based relocation programs are far more affordable than traditional ones. They’re more efficient, their overhead is lower, and they’re less labor-dependent.
Plus, today’s employees want and expect tech-based solutions. They seek transparency and autonomy—and you should, too.
In addition to lowering the cost of your relocation program, online relocation programs provide real-time analytics that will keep you on top of your spending and within budget day after day.
The Fastest Way to Start Saving
If you need to get your relocation costs under control for 2023, consider using us as a resource.
UrbanBound is the leading tech-based relocation company. We don’t do mark-ups or commissions, but we do know how to design relocation plans that stretch the tightest of budgets.
Need proof? When businesses switch to us, they reduce their relocation costs by up to 66%. In fact, 94% of the moves we manage come in under budget. And yes, our clients and their people love us.
If your 2023 relocation budget was cut, but your recruiting goals weren’t, give us a holler. We were made for this moment, and we can help.
