You’ve heard it before…you can’t manage what you don’t measure. Well, that is certainly true as it relates to domestic relocation costs. Relocation costs, on average, for renters exceeds $20,000 while homeowners exceed $90,000.
Also, 26% of respondents to AIRINC’s latest Mobility Outlook Survey say they expect an increase in domestic relocations in 2022. The combination of these cost and volume pressures makes it important to understand the financial impact so you can support the business in making strategic talent investments.
We take a look at some of the questions companies seek answers to in order to accurately predict, measure and adjust their relocation costs.
How precise should they be?
Precision often depends on accountability. Will senior management be part of the review and approval process? If so, you likely will want a comprehensive calculator that incorporates one-time, on-going, tax and miscellaneous costs. Location specific costs, ability to customize cost components and time-sensitive data are all items that are part of a maximized cost estimate process. If a formal review process doesn’t exist, some will use historical or industry averages. You get out what you put into the process…more data and detail yield better results. Better results lead to better decisions.
Who does the number-crunching and in what form?
The process depends on the resources. Do you have internal resources to dedicate to the process and to be held accountable for the results? This takes a lot of data, spreadsheets and administration. Is it better to rely on a partner to produce cost estimates because they have dedicated resources, strong data, calculators and extensive experience? We’ve seen many companies outsource this function because of resource constraints, lack of data and the desire to get to the most accurate answer possible.
How long does it take to complete a cost estimate?
I’ll answer this question with another question…who is doing the work? Companies that handle cost estimates internally can take a few hours or a few days. Outsourcing this function often takes minutes or hours which trims vital time off the process while boosting accuracy.
Several factors contribute to accurately and quickly predicting relocation costs. Contact us for more information on how to calculate relocation cost estimates that address your program’s philosophy, policy and budget.
