Hidden Costs Of Employee Relocation (And How To Avoid Them)

Relocating employees can often make good business sense. But before you put together a financial package, you need to be aware of the hidden costs associated with employee relocation. You can then take the right steps to avoid those expenses.

The Main Costs of Relocating Employees

Typically, the main employee relocation costs are moving and travel expenses. That means paying for the contents of an employee’s home to be shipped to the new location and funding the travel costs for the employee’s whole family.

You will probably also need to include expenses to cover the costs of an employee selling and buying a home, and temporary housing when the employee’s new home is not available immediately.

If your relocating employee is moving to another country, your company should also cover the costs for relevant documentation, like visas and work permits.

You can cut some costs and make more precise financial estimates by using an excellent relocation company like ARC relocation.

In addition to helping you save money with employee moves, a professional relocation service can help to reduce the time it takes to organize relocations, build better relocation policies, and increase the success rate.

The Hidden Costs of Relocating Employees

In addition to the main costs of employee relocation, there are numerous hidden costs that you need to be aware of. You can then take the correct actions to avoid them.

Here are some of the most common hidden costs associated with relocating employees.

Housing Costs

Your company will probably cover costs for an employee selling and buying a new home, but real estate transactions can contain various hidden expenses you have not considered.

For instance, closing costs alone can add up to five-figure amounts, and deposits on new houses can be costly.

You need to be aware of each different real estate cost to determine whether you will cover them all. For things like deposits on new properties, you could cover the initial cost and have the employee pay it back through his or her paycheck over time.

Settling-in Costs

From new furnishings to international driver’s licenses, there are numerous settling-in costs to think about. Those expenses may be small individually but they can soon add up.

By being aware of each potential settling-in cost, you can decide which exact expenses your company will and will not cover.

A Salary for the Employee’s Spouse

You need to consider whether the employee who is relocating has a spouse or not. If he or she does, then you may be expected to help finance the spouse before he or she finds a job in the new location. After all, the spouse will probably have taken a huge income cut.

Offering spousal assistance is sometimes a necessary hidden cost, but you can limit the cost by putting a timeframe on the duration of the financial assistance. You could even relocate mostly employees who are single if they have the skills and experience necessary for the roles.

How to Avoid the Hidden Costs

In addition to taking on board the above tips, you can avoid hidden costs by being organized and offering the right kind of relocation package from the offset.

For instance, rather than offering a standard lump-sum relocation package, you could provide a more personalized package that suits the reality of encountering numerous expenses.

A tiered package is a good idea, as it is generally more cost-effective. The expenses of relocating are determined by the employee’s position in your company and other factors like his or her living arrangements. For instance, an executive with a family would be on a higher tier than a single intern.

Also, as previously mentioned, it is often best to hire a professional relocation service that can find the best ways of putting together packages that help you to avoid hidden costs.

Do you have a news tip? Call us at (661) 298-1220, or send an email to newstip@hometownstation.com. Don’t miss a thing. Get breaking KHTS Santa Clarita News Alerts delivered right to your inbox. Report a typo or error, email Corrections@hometownstation.com

KHTS FM 98.1 and AM 1220 is Santa Clarita’s only local radio station. KHTS mixes in a combination of news, traffic, sports, and features along with your favorite adult contemporary hits. Santa Clarita news and features are delivered throughout the day over our airwaves, on our website and through a variety of social media platforms. Our KHTS national award-winning daily news briefs are now read daily by 34,000+ residents. A vibrant member of the Santa Clarita community, the KHTS broadcast signal reaches all of the Santa Clarita Valley and parts of the high desert communities located in the Antelope Valley. The station streams its talk shows over the web, reaching a potentially worldwide audience. Follow @KHTSRadio on Facebook, Twitter, and Instagram.