Relocating a company is a complex process that requires careful consideration and analysis of all stakeholders that could be affected. It can mean transferring an office from the center to the suburbs, moving an office from one city to another, or relocating a part of the office to a different location. The relocation of a company has both short and long term financial impacts, and it is important to evaluate all the factors involved in order to make the best decision for all stakeholders. The quality of life aspects of a state are of paramount importance when considering the relocation of a company.
Affordable housing, quality schools, nearby shopping and cultural attractions, climate, pollution statistics, energy costs and availability of medical services should all be taken into account. The cost of moving is one of the most self-explanatory considerations, but also one of the most complicated because of all the hidden or secondary costs involved. The greater the distance, the greater the potential cost of moving. Additionally, your new location has the potential to increase or decrease your overhead by changing lease payments, utilities, and taxes.
It can also affect the wages you pay to your employees, the cost of shipping, and other secondary impacts. When relocating a business, it is important to consider the “hidden costs” associated with the move. These hidden costs may be different for each organization, so it is important for those involved in the relocation decision to thoroughly evaluate any financial surprises that may arise as a result. The impact on employees and stakeholders should also be taken into account.
For example, if you were to move from Kansas City to New York, would you be able to pay the costs of all your employees to move? That could be a very costly expense. You will most likely also have to substantially increase your salaries to cover the cost of living in New York. And because going from Kansas City to New York is such a big move, many of your employees won't want to move. Depending on the attrition rate, your company may have to bear huge costs associated with hiring and then training new talent in New York to fill these vacancies. It is also important to assess the tax status of your new location.
Depending on where you move to and your original location, taxes could have a big impact on your organization's profitability. Your customers are also an important factor when relocating a business. It is important to consider how this move will affect them in terms of an increase or decrease in cost as it will get closer to them. As soon as you know you are moving, start looking at community profiles within commuting distance of your new employer. Do advance research on housing expenses and cost of living at your new location before signing any lease or mortgage agreement. You may be excited about getting a new job with a higher salary, but if the local economy is significantly more expensive than the one it comes from, you may find yourself further behind financially rather than ahead. Many large employers have relationships with relocation companies that offer great financial benefits such as covering moving expenses and closing costs and even offering a purchase option if your home doesn't sell before your move date. An employee relocation package is a benefit that companies use to help new and current employees move from one location to another because work requires it.
While the final cost of an employee relocation package varies widely, there are ways companies can estimate and reduce these costs. Businesses evaluating relocation often consider recreational opportunities, educational facilities, crime rates and other factors that could affect their employees' quality of life.