Developing an executive relocation package can be difficult because there’s no one-size-fits all answer. Much depends on the relocation resources available in-house, or the resources a company is able to access through outsourcing. However, the most important question to consider when estimating how much to invest in relocation is related to the value of retaining key talent within your organization.
A corporate relocation involves investing in many aspects of the move. Typically, management and HR staff focus on easily quantifiable, up-front corporate relocation costs. Rarely is the cost of losing key talent considered – and this cost is really the basis from which all other calculations should be made.
Additional corporate relocation expenses you may face if your key talent refuses to relocate:
- Cost of key talent going to a competitor (especially if a non-compete clause was not signed at the time of original hire)
- Loss of intellectual property and human assets
- Potentially bad publicity if high-profile company executives leave
- Loss of company and stockholder morale following the loss of key personnel
Other tangible costs of losing key staff
There are tangible costs associated with losing key staff. The costs of losing company leaders won’t be on the balance sheet as part of your corporate relocation expenses but if you are unable to keep valuable talent on board, you’ll find these hidden expenses add up. Also keep in mind that these expenses, because they are not quantifiable in typical accounting terms can’t be considered tax-deductible like other corporate relocation expenses or business losses. For example:
- The costs of hiring and training new employees, which can equal up to five times the amount of an executive’s salary
- Loss of productivity during onboarding with new employees
- Additional corporate relocation expenses if you need to look outside your region for talent
All of which means that the first question your company needs to ask when trying to calculate your investment in a corporate relocation program should be, “What is it worth to us to have our top performers to stay with us, or not?”
Reducing the costs of corporate relocation
Proper planning and design helps companies efficiently manage relocation program costs. It’s crucial to design a relocation program that fits and compliments your corporate culture, while also meeting the major needs of your relocating employees.
This is a balancing act that challenges many companies. Staying up-to-date with the features your competition offers transferees is a full-time job all by itself but it’s necessary to ensure that your relocation program remains attractive to employees. The alternative is to work with an experienced and established relocation services provider to help build a relocation program that compliments your company and its goals, while maximizing your investment in your top talent. To get some ideas for customizing your relocation program, give us a call or shoot us an email – we’d love to help you move the right people to the right places!