Hidden Costs of Corporate Relocation: Protecting Your Assets
Through careful planning and vetting potential relocation service providers, companies can minimize hidden costs and maximize the opportunity of a business move.
Mike Gonzalez, President, Armstrong Relocation (2011 Directory)

Expense. Organizational upheaval. Logistical challenges. These are just a few words that arise when discussing a business relocation. Moving a facility can be an exciting time brimming with opportunity, or a frustrating burden. While straightforward tactics contribute to the overall expense of relocation, cost-conscious companies should know several important strategies, especially when moving long distances.

Moving doesn't have to cause a migraine. Fundamental planning principals that factor in multiple variables can position an organization for a fresh start with potential for growth.

A company must consider two distinct components for any relocation. It must begin with a comprehensive plan to move both the personnel and the business operation, in which the company and relocation partner collaborate. The transfer of employees and their families, coupled with the wholesale move of a facility, are complex matters that must be scrutinized closely to avoid excessive spending.

Moving Personnel
Corporate Productivity Drains - When transferring employees and their families, relocation decisions aim to reduce administrative burdens on an organization and bolster its resources to preserve cash flow. Although maintaining a thrifty mindset is in the company's best interest, it can prove disastrous.

A lump-sum payment for relocation may seem to be the most efficient way to convince employees to move. However, as they slowly follow their company to a new destination, lost productivity can hurt the employer.

In an ideal situation, the employee will accept the payment and research the relocation outside of business hours. But this is rarely the case. Typically, the employee becomes consumed with the relocation process, spending countless hours on the phone and Internet analyzing moving companies, contacting realtors, and searching for a new home, all on company time. This can cost the company due to the distractions of handling relocation. Companies cannot afford to take this risk.

Multiply one employee by a hundred, and the profit and productivity loss is immense. The employee himself or herself is another casualty of the process. Some companies can encounter unforeseen worker's compensation claims if employees decide to pocket some of the cash, rent their own moving vehicle, and injure themselves.

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Corporate relocations can be stressful, but they don't have to be. If you have questions on how to streamline the process, submit them below to Ask Area Development and the article author will respond.
The right relocation strategy can avert these situations. By investing in a comprehensive solution for employee relocation, business leaders can minimize lost productivity and maximize the relocation process.

Overwhelming the Administration - Expecting human resources to carry the load can set an organization back. For a complex relocation, merely issuing an internal HR handbook to guide the move is insufficient for the employee and the company. Relocation requires a degree of handholding to ensure smooth execution, which can only be provided by an experienced relocation partner.

Without appropriate processes in place, calls and e-mails can inundate HR departments from confused, agitated employees. Who can blame them? They don't understand the process, don't have any explanation from their supervisors, and want to save time and money. Unless employees are educated in selecting a relocation provider, buying a home remotely, and coordinating travel, the process can overwhelm. Many downsized HR departments cannot handle the additional workload of a long-distance relocation. Whether due to a lack of experience or bandwidth within HR, relocations can cost thousands of extra dollars to overcome the administrative shortfall.

Moving the Facility
A Strategic Approach - Hidden costs come into play when relocating an entire operation. A lack of planning before, during, or after relocation can dramatically affect the final bill. Relocation begins before the first box is packed.

Advanced planning is critical. Relocation analysis can take several months on average. While company size creates variables, planning should begin nine months out. The scope of the entire operation must be clearly defined to avoid costly change orders, which significantly increase price. Planning should focus on packing time and the actual time required to transport corporate facilities and heavy industrial equipment. The relocating company must work closely with its provider to determine the work`s extent, the time needed, and, most importantly, what it will cost.

Expect the relocation company to understand every component of your operation the move affects. Based on size and scope, a phased approach allows a company to remain fully functional throughout the transition.

Roles and Responsibilities - A successful relocation means a company must understand how to work effectively with its relocation partner. All parties have their responsibilities. For instance, employees must be instructed on collecting personal items and work materials for efficient packing and transfer. Facility common areas present a primary hidden cost that creates change orders. These areas are not the responsibility of a specific individual, but must be prepared for relocation. Storage rooms, supply closets, and other locations must be secured to avoid excessive costs. Conducting the process haphazardly is a sure way to create invoice overages that are easily avoided.

Avoiding Surprises
A Sound RFP - To mitigate the costs of lost productivity and overwhelmed administration, partner with a full relocation specialist. These providers streamline relocation and alleviate potential burdens. Relocations can be highly stressful, so it is important to relieve the internal team of as much of this arduous task as possible.

Some relocation companies manage many industries, while others focus on specific verticals. Individual organizations must conduct due diligence to identify a suitable provider that fits the company's needs.

Analyze at least three prospects and request references to make an informed decision. A quality provider will offer a complete array of services for domestic or international relocations, from real estate management to moving and storage, and immigration and repatriation for overseas moves.

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Corporate relocations can be stressful, but they don't have to be. If you have questions on how to streamline the process, submit them below to Ask Area Development and the article author will respond.
Issuing an RFP is highly recommended to secure potential relocation partners, but they should be crafted to eliminate undesirable suitors. Considering some key points, companies can develop an RFP to secure the right candidate to execute a successful move in terms of both performance and price. These points include:

Comprehensive Solution: To avoid productivity losses and smooth a long-distance move, a provider should offer complete turnkey services, from packing, moving, and storage of employee household items, to helping workers find housing.

Industry Experience: A relocation partner must have specific industry experience and the references to prove it. They should be meticulous planners and trusted counselors throughout the process. Ongoing access to leadership executives is also important. If an issue arises, the partner must be able to immediately contact a company leader.

Employees and Equipment: Consider working with full-time employees. A company that solely uses contractors suggests a lack of training and accountability. A relocation provider should also have a large fleet of modernized trucks to avert property damage, as well as global resources to support the relocation regardless of destination.

Insurance Certification: Adequate insurance will protect property and access to new facilities. Without appropriate insurance, property owners have been known to bar a company from moving into their new location. Besides cargo insurance, competent relocation providers will assume responsibility of goods during a move, and in some cases hold drivers liable for damage. That's extra motivation and accountability for a job well done.

Accounting Practices: Line items within a relocation invoice can be overwhelming. Choose a relocation partner based on its accounting and auditing practices. Every charge needs to be easily verified to avoid overages and lapses. Complete transparency throughout the process is paramount.

Asset Management: It might not make sense to relocate all office and industrial equipment due to cost restrictions or new purchases. A relocation provider with expertise in asset management can help green the relocation by repurposing or recycling unwanted items. Office and industrial equipment can be sold to recoup some relocation costs, or recycled to eliminate waste and protect the environment.

Ask Area Development

Corporate relocations can be stressful, but they don't have to be. If you have questions on how to streamline the process, submit them below to Ask Area Development and the article author will respond.
Moving in the Right Direction
A corporate relocation can mark a new era for a company and bring greater opportunity and profitability. But it can also adversely affect productivity and the bottom line. Strategic planning that considers all variables can help trim hidden costs to keep a move on time and within budget.

Working with a comprehensive relocation solutions provider can offer peace of mind and control in the midst of a taxing endeavor. Controlling the entire process and understanding the costs involved is crucial. A successful relocation begins long before the trucks are loaded. It requires solid planning to dissect each component of the operation to avoid excessive expense, especially hidden costs.

For a smooth relocation, these steps will help your business move in the right direction.

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