In today’s global economy, companies increasingly need to move employees abroad for international assignments. Global mobility assignments can expand market reach, enhance cross-cultural collaboration, and facilitate knowledge transfer. However, global mobility comes with international relocation costs.
Before making significant investments, businesses must carefully evaluate whether these global mobility costs are worthwhile and will yield a favorable return on investment (ROI).
Relocating employees is a complex undertaking that involves numerous considerations, including logistical challenges, cultural adaptation, and family needs. Companies must assess the international relocation costs and the strategic value of each assignment.
This article is a comprehensive starting point for organizations estimating international relocation costs for employees. By understanding the factors that influence the cost of relocating, businesses can make informed decisions about their global mobility strategies and ensure they align with operational goals and employees’ needs.
Budgeting Global Mobility Costs For Corporate Relocation
Effective budgeting is crucial for planning how many employees will move internationally for global mobility assignments and what to include in global mobility benefits. Organizations can make informed decisions by understanding the various factors that influence the cost of relocating.
Origin and Destination International Relocation Costs
The location from which an employee is relocating and their new destination significantly impacts international relocation costs. Differences in the cost of living, housing availability, distance between the origin and destination, and local regulations all affect the overall international relocation cost.
Home Ownership
Whether an employee rents or owns a home is one of the most significant impacts on global mobility costs. Home sale programs and closing fees add significant relocation costs if the employee is a homeowner selling their home for a long-term or permanent global mobility assignment. The greater the cost of the home, the greater the expense.
Employee renters might face much less expensive lease cancellation fees or deposits for new housing.
Employee Seniority
The seniority of the relocating employee influences the benefits and support they receive. Senior employees often require more comprehensive relocation packages, are more likely to require a home sale, and often have more extensive household goods relocations, which increase overall costs.
Family Size
Another important factor is the size of the employee’s family. Relocating an entire family involves additional international relocation expenses, such as bigger housing, more household goods to transport, schooling, and settling-in services.
Number of Global Mobility Benefits
The specific benefits included in the relocation package can vary widely. A more extensive range of global mobility services—such as temporary housing, cultural training, and visa assistance—can lead to higher relocation costs. It’s essential to clearly outline the benefits offered to each employee in a global mobility policy.
Average International Relocation Costs For Corporate Employee Moves
The estimated average starting international relocation cost is approximately $77,000. This amount will vary widely by individual circumstances, including the employee’s home, family, origin, and destination.
To better understand average global mobility costs, we break down this $77,000 cost by corporate relocation service below.
Global Mobility Costs By Corporate Relocation Service
Cost of Home Finding and Orientation Trip
The estimated average global mobility cost for a home-finding and orientation trip is $7,500. This includes transportation, lodging, and meals during the employee’s trip to find a home and get acquainted with the new area. This cost will vary by destination.
Cost of Destination and Departure Services
The estimated average global mobility cost for destination and departure services is $3,000. This covers area tours, settling-in services, housing searches, school searches for employees and their families, and other destination services.
Cost of Temporary Housing
The estimated average temporary housing global mobility cost is $15,000, based on approximately 60 days of furnished accommodations.
Additionally, car rental expenses of up to $2,500 may be required for the same 60-day period while a long-term vehicle solution is arranged.
True housing housing costs will vary by the destination location, home size, and amenities.
Cost of Employee Return Trips
The estimated average employee return trip global mobility cost is $1,500 per trip. According to the company’s travel policy, this covers transportation for the employee to visit their family or employer at the origin.
International Relocation Costs of Employee Household Goods Moves
The estimated average global mobility cost for an employee household goods move is $25,000. This amount includes approximately $5,000 for air shipment of up to 500 lbs per person in one container via airline cargo, as well as sea or land shipment in a container, which typically costs around $20,000 for an international employee move.
Cost variables include the size of the shipment, the origin, and the destination.
In addition, other global mobility moving costs may apply, such as auto shipment costs or storage costs.
Cost of Employee Travel to the New Location
The estimated average global mobility cost for employee travel to the new location is $7,500. This figure is dependent on the company’s travel policy and encompasses transportation, lodging, and meals for the employee and their family.
Misc. Global Mobility Allowance (Net)
The average miscellaneous global mobility allowance is $5,000. This flat amount covers some incidental costs of relocation that are not explicitly covered by other expenses.
International Relocation Costs of Visa & Immigration
The estimated average cost of visa & immigration global mobility services is $5,000. This includes standard paperwork and preparation by immigration lawyers for short-term, long-term, or permanent assignments in another country.
Cost of Global Mobility Tax Services
The average cost of global mobility tax services is approximately $5,000 per global mobility assignment. This covers tax consultation prior to the international move and preparation of two-country tax forms for a one-year international assignment by a global mobility tax expert.
Corporate Relocation Service Fees
Corporate relocation service fees pay for global mobility assignment management. A global mobility company provides comprehensive support for all the logistics and international corporate relocation services. Additionally, a relocation company’s global financial services provide specialized financial assistance for relocating employees’ unique needs.
The final fees will depend on the type of employee relocation and the specific services required. These services ensure a seamless transition and help address any challenges that may arise during the relocation process.
Pie Chart: Average Employee International Relocation Costs By Service
Use this pie chart to better understand each international relocation service’s contribution to the overall average employee international relocation cost.
Discretionary Employee International Relocation Costs
Discretionary employee international relocation costs are optional services that are only required for some employee relocation scenarios or to enhance the relocation experience.
These international relocation costs increase the overall average global mobility expenses for employees and may include services such as cultural training, language classes, and assistance with home sales or purchases.
Home sale services and programs are particularly impactful, as they can substantially raise average international relocation costs. The need for these global mobility services will depend on the employee’s personal situation and the company’s relocation policies.
Home Sale & Purchase
Home sale and purchase costs apply if the relocating employee is a homeowner. These global mobility costs include real estate agent fees, closing costs, and potential losses from selling below market value. Some employers offer home sale programs to expedite international relocation. Home sale and purchase assistance eases the financial burden on the employee for an international relocation and incentivizes them to take on a global mobility assignment.
Lease Cancellation
Lease cancellation costs are the fees incurred when a renter employee needs to break a lease on their current rental property to make their move for a global mobility assignment.
Vehicle Loss
Vehicle loss costs occur if the employee needs to sell their vehicle at a loss or if there are fees associated with breaking a vehicle lease. When an employee relocates internationally, they may be unable to take their vehicle with them, which has financial implications.
Cultural Training
Cultural training programs help employees adjust to a new culture and environment after relocation. These programs can cover social norms, business etiquette, and local customs, making a global mobility assignment more successful.
Language Training
Language training classes or self-service resources to help employees communicate effectively in their new location. This support is crucial for fostering successful interactions both in personal and professional settings during a global mobility assignment. Including language training as part of a relocation package significantly enhances an employee’s ability to adapt to their destination country.
School Assistance
School assistance helps employees enroll their children in new schools and may include registration fees and tuition expenses. This support eases the transition for families relocating internationally. When children quickly adapt to their new educational environment, employees are likelier to stay on a global mobility assignment.
Duplicate Housing
Duplicate housing costs arise when an employee maintains two residences—one at their departure and another at their destination. These expenses can be substantial, particularly during a prolonged transition period.
Repatriation
Repatriation refers to the global mobility costs of relocating employees to their home country after completing an international assignment. Costs for repatriation include moving expenses, housing arrangements, and assistance with reintegration into the previous work environment.
COLA (Cost of Living Adjustment) International Relocation Costs
Another consideration when budgeting for international relocation costs is the cost of living adjustment or allowance (COLA). COLA helps employees maintain a comparable standard of living after relocating to a new country or region.
Living expenses can vary significantly from one location to another and impact everything from housing costs to daily necessities. COLA helps bridge the gap between the employee’s previous salary and the new cost of living. Employers should especially consider COLA for employees moving from regions with lower costs to those with significantly higher expenses. The additional compensation allows employees to avoid financial strain and focus on their new role.
For more detailed insights into calculating COLA and its cost implications for international relocations, read our article about relocation cost of living adjustment or allowance.
Quotes For International Relocation Costs For Your Employees
Estimating international relocation costs can be complex, with various factors influencing the overall expense. However, NRI Relocation is here to help your company budget global mobility.
NRI Relocation provides tailored global mobility assignment estimates based on your company and employees’ needs. Our relocation consultants will help you create and implement a global mobility strategy that aligns with organizational goals and provides comprehensive personal support for your relocating employees.
Fill out the form below to recieve a quote tailored to your employee’s unique situation and needs. Providing NRI with the specifics of your employee’s move will allow us to offer a more accurate corporate relocation cost estimate.