When the demands of business change, it is critical to be able to adapt to the market and create a strategy to keep the company moving forward.
Employee relocation and relocation expenses have increased over the last five years, correlating with moving expenses, but also employee wages and compensation benefits in an employee’s market.
Keeping overhead to a minimum during the employee relocation process isn’t an easy task, but it’s what we intend to help you tackle today. In fact, you can also look at affordable options like business moving services in order to keep your moving costs at a minimum.
Moving costs have increased, but why?
According to data compiled by Forbes from the U.S. Postal Service change of address requests, Pew Research surveys, and YouGov surveys, the Covid-19 pandemic had a significant impact on change of address requests throughout 2020 to 2021.
The data presented shows that the U.S. saw a 3.3% increase in permanent address changes between 2019 – 2020, while temporary address requests increased by an incredible 41.3%. Much of this had to do with people leaving cities, whether to avoid contagion, or switching to work-from-home opportunities with current or new employers.
2021 saw a different trend though – temporary address changes saw a downtick, while permanent address changes continued to uptick, which indicated that the desire to relocate was still strong, particularly amongst urban dwellers.
This of course had an impact on housing inventory availability, and combined with the rising costs of fuel, further exacerbated by the ongoing Russian conflict in Ukraine, and you have a recipe for increased costs across multiple sectors that correlate with employee relocation.
We’ll talk a little more about the situation in the U.S., but it ties into a broader global framework. The situation as it occurs in the U.S. is merely a frame of reference. For international employee relocation, companies need more than ever global relocation services, which take into account all the various factors of the current economic situations, and formulate employee relocation strategies that minimize overhead as best as possible.
Several large moving services have dramatically decreased services to California, as these companies logistically depend on a healthy flow of inbound and outbound commercial trucks between hubs to complete their business. California, for example, has seen a mass exodus throughout the pandemic, with significantly fewer people moving into the state.
Thus, shipping and moving companies increased their prices to compensate for the decrease in volume, which obviously has ramifications for companies trying to relocate employees into major urban cities such as Los Angeles, New York, and San Francisco.
What strategies can companies use to minimize relocation costs?
We’ll discuss our methodology and the data we found, but first, let’s take a look at how much companies are expected to spend on relocation expenses in 2022.
In 2021, it was estimated that companies spent up to $79,000 per homeowner, and around $25,000 to relocate a renter. While statistics on total global spending on employee relocation are not readily available, the relocation industry itself grew by a CAGR of 4% in 2021 and is now valued at around $14bn.
Thus, we can readily extrapolate that this number will be even higher by 2022, and that an increasing number of companies are preferring to use professional relocation services, rather than managing the whole process themselves.
The following tips pertaining to employee relocation budgets are offered by numerous relocation companies, as well as HR specialists:
- Consider whether the financial gain of relocating an employee outweighs the costs of hiring professional movers san antonio.
- Be clear in your employee relocation policy to reduce ambiguity in communication and expectations.
- Set expense caps on relocation benefits, including but not limited to real estate asset depreciation during the home sale process.
- Research and engage relocation firms early, and accept bids from multiple relocation firms, to ensure you get the best deal for your company.
Ultimately, the biggest cost-saving you’ll find is by partnering with experienced Nashville movers that offer you a reliable package, at competitive pricing, so don’t be afraid to ask for a competitive quote.