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Mitigating the Cost of Employee Relocation Expenses
from:Especially when competing for top level executives, the cost of employee relocation expenses can seem excessive. However, there are ways around getting your company involved in a relocation package that it will never recover in executive talent without seeming cheap. Technical employees are rarely granted such extravagant relocation packages, so there is usually little if anything that can be reasonably trimmed from such packages.
For starters, there are quite a few real estate related expenses that have proven very expensive indeed for some companies. For instance, it became popular in the 1980s to purchase a new employee’s old home if it wasn't selling. These sorts of employee relocation expenses that involve the company in becoming the owner of property is not only very spendy, but can also look a bit shady when watchdogs scrutinize the amount paid for it. It's next to impossible grant your employee a fair price and not be accused of paying too much. Anyhow, if it's your business to make paper envelopes, why should the company invest in an Italian Villa?
Other employee relocation expenses are less straightforward. For instance, should your company give a moving stipend, or grant an expense account that needs to be clearly documented? While it may seem cumbersome to begin with expense accounts immediately, professional relocation companies can handle all the particulars. On the other hand, the family of an executive may not be as judicious with such an account or afraid to use it, just in case a legitimate moving expense isn't covered. Clearly, hashing such particulars of employee relocation expenses out first is key.
Before your company makes any offers to cover over-generous employee relocation expenses, it might just do some good to talk with the employee in question and find out what her or his personal circumstances are. For instance, if he or she is single, even a very nice condo in a downtown area can be less expensive than a 3-bedroom home in the suburbs with the use of a company car. In fact, preferentially locating your employees near the work site just might save you the expense of paying for and garaging a company car.
It is a delicate balance, finding the right amount to spend on employee relocation expenses, but if there is any sort of trick involved, it is to offer little and agree to much. You certainly don't want there to be any snafus along the way that could sour the relationship immediately. When given the choice to offer fewer benefits and use a more highly recommended relocation services company to oversee the process, always go for quality rather than quantity. You and your new employee will benefit from the attention to detail that makes relocation go smoothly.
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