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Blog

The Hidden Costs Behind Mobility Spend

by Elaine Baker, SVP Sales & Account Management Global Support

Ask a room full of mobility stakeholders to create a list of their top priorities, and they’ll all place cost management somewhere near the top. While this probably isn’t surprising, a statistic pulled from our latest annual mobility survey might be: According to Talent Mobility for Business Growth – Aligning Practices to Drive Organizational Impact, mobility stakeholders indicated that they also can’t quantify true mobility spend for their company (48% - 72%, depending on move type).  

Certainly, the structure of a mobility program can play a role in mobility complexity, from a lack of alignment between policies and organizational goals to unintentional task duplicity. Inconsistent program application, exceptions, and out-of-scope management decisions can also add to cost control challenges. But the disconnect between wanting to control these costs and an inability to measure them is usually tied to factors that are less tangible.

Forgotten Contributors to Mobility Spend

Administrative Costs: Even when a company has a grasp on measurable mobility expenses (tax gross ups, household goods shipments, temporary housing, etc.) stakeholders often forget the internal administrative costs associated with relocation. This can be problematic, particularly if policies being utilized encounter frequent exceptions or have been administrated by those who don’t recognize the financial impact of mobility decisions. In short, an internal mobility professional may need hours of research or troubleshooting to correct a mistake or address an issue that a subject matter expert could tackle in minutes, thanks to his/her wealth of knowledge, contacts and experience. In short, when problems occur with internally-handled relocations, unless administrative problem-solving time is factored into the full cost of a relocation, the true cost of mobility will remain elusive.

Out of Purview Expenses: When quantifying spend per employee, company stakeholders often miss factors that might take place outside of their field of vision, including activities performed by a relocation services provider, interest charges on funds that were advanced on the company’s behalf, compensation that local payroll processed but did not flag or report as a component of the relocation, or any service fees that may be paid as part of their supply chain. To quantify the true cost of mobility, stakeholders must identify all resource expenditures that have been dedicated to the process, including the less tangible ones.

Identifying Costs – and Containing Them

There are a variety of things companies can do to identify the hard and soft costs associated with mobility – and then manage them. Our white paper, Controlling the Costs of Mobility, addresses many of these suggested action steps, in addition to providing guidance on tracking mobility spend to improve a company’s return on investment (ROI), and how to appropriately weigh cost control against value and a positive employee experience. To learn more, download the paper or contact us at concierge@sirva.com.