Corporate Relocation is an investment. It is an investment of time, money and human capital. When an employee is tapped to take a corporate relocation their company is ready to make a big investment in that person to share their expertise and knowledge with another office. The reasons to relocate an employee is often twofold, 1) the company needs to use that person as a resource in the new location and 2) it gives an opportunity for a deserving employee to bolster their experience with a relocation, which as we noted in the past is becoming an essential quality of corporate leadership.
The cost of the relocation is often the number one factor used to decide which candidate is right for the job. Understanding what benefits are needed to relocate an employee and their family prior to a move will significantly help to determine if the employee is a good fit for a relocation. Often times, companies rush into choosing a candidate for a relocation and then it turns out they weren’t the best choice in the first place which leads to frustration, excessive costs and even a failed relocation. This is why Paragon’s standalone service, Pre-Decision Consulting, is so popular. Pre-Decision avoids the mistakes before they happen significantly increasing the return-on-investment of a relocation.
To determine how much a relocation will cost it is important to understand the employee’s family and housing situation because this will dictate the amount of benefits they will need to successfully relocate to the new location. For example, relocating a Senior Executive with a family of five with a large home is going be a much larger investment than relocating a single new hire recent grad who lives in a one bedroom apartment.
What are the Average Relocation Costs?
In a recent Mobility Magazine, they published the Worldwide ERC 2011 US Transfer Volume & Cost Survey which included the below data on the average corporate relocation costs by move type.
Breaking Down Relocation Costs by Move Type
- How much does it cost to relocate a homeowner? – On average it costs $90,081 to move an existing employee who is a homeowner. An existing employee homeowner relocation costs more because it relates to the size of their home. Existing employee homeowners typically have larger homes which increases the costs of relocation benefits that relate to real estate and because their home is larger they also often have more stuff to ship using a household goods company which increases the price of the overall relocation as well.
- How much does it cost to relocate a new hire homeowner? – On average it costs $69,020 to move a new hire employee who is a homeowner. Similar to an existing employee homeowner relocation, a new hire homeowner relocation costs more than a renter relocation because it relates to the size of their home. The new hire homeowner may not always need the full array of benefits that an existing employee homeowner needs on a relocation and the costs to relocate these employees is less.
- How much does it cost to relocate a renter? – On average it costs $23,497 to move an existing employee who is a renter. An existing employee renter relocation typically costs considerably less than a homeowner relocation because benefits related to real estate are not needed for these employees and because often times renters have less household goods to be moved which results in smaller moving costs.
- How much does it cost to relocate a new hire renter? – On average it costs $20,168 to move a new hire employee who is a renter. A new hire employee renter relocation very closely resembles an existing employee renter relocation but with a little bit narrower scope of benefits.
Paragon Relocation uses complete transparency in pricing and reporting to show our clients the true costs of each relocation. We bring the average costs of relocation down with smart relocation program design that aligns our client’s relocation budget goals with their corporate talent goals. Relocating an employee is a big investment for any company to make, and while relocation management fees are a very small part of those costs, Paragon is always thinking of new ways to save its client’s money. In terms of reducing overall costs, the inclusion of the Pre-Decision Consulting as well as other cost cutting services such as our preferred household goods provider bidding engine, Partner Select, have saved our clients well above 10% on each participating relocation. In addition with the full launch of our industry leading Relocation Information Management System, PRISM 2.0, we are also saving our client’s time touching relocation with its user friendly features and robust reporting suite.
Would you like to save time and money on relocation? Contact us today for more information on how you can save time and money on your relocation program!
For more information on how much a relocation costs, please see this previous post: How much does it cost to relocate an employee?