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 are part of the package. Climate, pollution statistics, energy costs and availability of medical services should be added to the list. The relocation of a company is something that must be done with careful consideration and analysis for all stakeholders that could be affected.
But before we get into the heart of the matter, let's look at what relocating a business actually entails. Relocating a company can mean several different things. It may refer to the transfer of an office from the center to the suburbs. It can also mean that you move your office from one city to another, possibly across the country.
Another example could be the relocation of a part of your office to a different location, while still maintaining ownership of the original location. The relocation of a company has short and long term financial impacts. It's not a cheap effort to move all the contents of an office. And the price only increases the farther you are from your original location.
In terms of long-term costs, 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. Therefore, for all these reasons, it is important to carefully evaluate all the factors involved in the relocation of a company. This is one of the most self-explanatory considerations, but also one of the most complicated because of all the hidden or secondary costs involved in relocating a business.
First of all, you need to consider the cost of moving from one place to another. The greater the distance, the greater the potential cost of moving. For example, relocating an office of 3000 people across the country will be much more expensive than moving an office of 20 people across town. However, in both cases, you'll want to assess whether the cost-benefit outweighs the actual cost of moving.
Next, you'll want to consider how your new location's overhead will affect your day-to-day operations. Things like lease or mortgage payments, utilities, shipping, and wages could be impacted. For example, if you were to move a business from Kansas City to New York, the rent of your office space and the cost of salaries would go up a lot. Next, you'll want to think about the “hidden costs of moving”.
These hidden costs may be different for each organization, so it is important for the people involved in the relocation decision to thoroughly evaluate any financial surprises that may arise as a result of the move. Based on the example above, 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. Impact on Employees and Stakeholders To address this, your organization may build a parking lot, lease a parking lot, or reimburse parking. But once again, this will affect the costs of the move and should be taken into account. If you have customers or customers who fly frequently to visit your organization, it could also be important that your office is within a decent distance from the airport.
When moving from county, state, or even country, it's 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 the lifeblood of your company's financial health. So, when relocating your business, you need to consider the impact it will have on your customers.
This could be in the form of an increase in costs (due to increased overhead) or perhaps a decrease in cost as it will get closer to a customer. Because of this, some would argue that it is a company's ethical responsibility to evaluate and minimize the community impact associated with a company's relocation. The decision to relocate a business can have enormous impacts and should not be taken lightly by leaders involved in the relocation. It is important to consider all the factors involved in relocating a company and then make the best decision for all stakeholders involved.
To make sure everything on your list is checked (twice), we asked a panel of 13 startup founders from the Young Entrepreneurs Council (YEC) the following question. 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 be find 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, healthcare, climate, and other factors when assessing a city's quality of life. Although most companies have a relocation package, mostly resolved by the time they offer a job, employees may have individual needs or requests to make the move as simple as possible.
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