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Key Performance Indicators for Relocation Programs

Not long ago, we released a whitepaper titled, “How to Talk to Your CFO about Relocation.” One of the things we stressed in the piece was the important of honesty – especially when it comes to home inventory costs and risks. We also stressed that strategic HR and relocation managers should be ready to talk numbers. It’s easy to shy away from providing cost estimates to your CFO because you either don’t have them or you don’t want to dissuade buy-in due the expense. This tactic, however, is a sure fire way to breed mistrust. Most CFOs do not want surprises.

So, how do we talk numbers effectively?

Setting up a good policy or program is a critical step towards delivering accurate numbers to your CFO. A market competitive policy that clearly outlines which benefits are offered and to whom will help you organize your budget.  First, you will How to Talk to Your CFO about Relocation by XONEXneed to identify how you are budgeting for your relocation expenses. Some companies will establish budgets by policy, where others will run a budget for the entire relocation program.

I believe that the detail required to budget by policy paints a clearer picture for the relocation team, as well as the CFO, so, if possible, set your budgets by policy. You can build individual policy budgets based on the very specific benefits offered, which will give a more accurate view of what those transferees are costing the firm. Further, if you are halfway through the year and your relocation expenses are over budget, you will be able to identify which components are driving cost more easily.

To illustrate these nuances, you may want to provide your CFO with line by line cost estimates for each relocation policy, as well as information about who is eligible for which policies.  It will help your CFO understand who gets what benefits and why the company is making the investment. To further illustrate which elements of a relocation policy or program are driving costs, you should work with your CFO to develop a set of key performance indicators (KPIs) that are meaningful to him or her so that you have a group of benchmark measurements to work against. Below are some of the KPIs that you may find useful, as well as the stories they tell your CFO:

Average home cost. If home costs are higher than the average set in your budget, initial home buyout investments will jump, as well as carrying costs. This number can be swayed by a housing market shift, or one very expensive home taken into inventory. Budgeting by policy will help identify the root cause more easily.

Average days on market. If homes are sitting on the market longer than expected, carrying costs will increase.

Variance of distance. If you are relocating people further than expected, either to a different location than initially planned or because transferees live, on average, a greater distance away, household goods transportation costs will increase.

Average move and storage cost. If moving costs jump, it can be a sign that you are moving bigger homes with more items. If storage costs jump, it can be a sign that homes are not selling fast enough and transferees are staying longer in temporary living.

Average spent on exceptions. If money spent on exceptions is higher than the average in the budget, this may be a sign of a shift in the market place. For example, if transferees are requesting more time in temporary living, then it’s likely that homes are not selling. On the other hand, exceptions may be up because business line managers are being too lenient. This is an area that should be looked at closely and actively managed by you and your CFO.

These are just a few KPIs that you might find helpful. Your CFO will have additional ideas based on your industry and location. This is an area where you can shine by collaborating with your CFO to find the best measurement strategy.

What KPIs do you use for your relocation program? Please share below.


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VP, Client Services

VP of Business Development Northeast Region


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