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Mobility Costs: Time to Flip the Script

Managing the rising and increasingly unpredictable cost of global mobility programs remains a challenge for mobility leaders around the world, as it has been for the past several years. Budgets and value were discussed extensively during Graebel’s recent insideMOBILITY® Global Leaders conference in London

In my conversations with clients, I’m seeing that their companies are closely examining cost-saving measures across their organizations. Often, specific spend-reduction targets are assigned to the human resources function — where mobility typically resides on the org chart — without providing guidance on how to achieve these savings or recognizing mobility as a value-driver rather than a cost item. So what factors are driving the increasing corporate focus on effectively managing mobility costs and maximizing the value of every dollar spent?

  • First, while there are exceptions, mobility is not always widely understood or supported by corporate leaders as a key driver of talent attraction and retention, or as an important enabler for execution of corporate strategy.
  • Secondly, according to Morgan Stanley (region restricted), U.S.-based public companies are discussing operational efficiencies and cost containment on earnings calls with investors more frequently than ever before to show that they are pushing back against inflation-fueled expenses.
  • Lastly, mobility programs are also competing with other priorities, such as AI and other technology advancements, for finite corporate investment dollars, forcing mobility to prove its worth like never before.

At the same time as mobility budgets are being scrutinized, market forces are contributing to upward pressure on costs.

 

What are the main drivers of mobility cost increases?

There are many cost-drivers facing global mobility programs and they vary from country to country. Here are three of the main forces Graebel teams are discussing with our clients.

 

Rising cost of real estate transactions

Three factors are contributing to higher housing costs for mobility programs in the U.S.:

  1. While interest rates have eased somewhat, the average 30-year fixed U.S. mortgage has surged throughout 2024, averaging 7 percent as of early November. Homeowners paying off a comfortable 3 percent mortgage are less willing to sell their home and sign up for a higher rate and may ask for rate buy-downs or other “make whole” relocation benefits.
  2. Changes to compensation rules for U.S. real estate professionals puts more responsibility on buyers in some circumstances, which may require policy changes to account for extra expenses to cover these agent commissions.
  3. Home prices remain historically high in the most desirable relocation destination markets, driven by factors such as limited housing inventory and strong demand.

All these factors contribute to upward pressure on the housing cost component of mobility budgets. Similarly, in EMEA, housing costs remain high in the most desirable destination markets, largely due to gaps between housing supply and demand driven by insufficient new construction, rising building costs and a growing trend of using properties as investments.

 

Rising costs of household goods shipping

Not only are housing costs under pressure, but the cost of shipping household goods (HHG) to furnish homes for relocating employees is also on the rise due to several factors, including:

  • A return to more typical levels of post-pandemic global trade has contributed to increased air and sea shipping costs, as have labor issues in certain key ports like U.S. East Coast harbors. The high cost of fuel has significantly increased the expense of moving, whether from Baltimore to Bremerhaven or Shenzhen to Singapore.
  • Instability on key shipping routes such as the Red Sea has increased transit times for shipments through the Suez Canal and escalated inflationary pressures on maritime insurance costs everywhere. The global transportation industry’s efforts to combat climate change — such as the International Maritime Organization (IMO)’s 2050 greenhouse gas plan, which aims to achieve net-zero greenhouse gas emissions (GHGs) from international shipping by or around 2050 — all are contributing to higher costs in the HHG category.

 

Rising cost of immigration

The 2024 election year has seen several developed countries around the world elect new governments, with immigration policy emerging as a key focus in many cases. Some of these governments have implemented policies – or plan to – that increase the complexity and cost of entry and work authorization for non-citizens, leading to budget pressures for mobility programs.

Our EMEA team, among others, has found that fees to governments, in the form of visa and work permit application costs, are on the way up. For example, in the UK, individuals can now expect to incur visa application fees of up to £10,000 if living with their partner and/or children; this amount increases with each accompanying child, as well. Changes in government and immigration policies and costs do not always happen in predictable ways, leading to volatility in this mobility budget component.

I’m seeing that companies are increasingly relying on specialized and often costly immigration legal counsel to navigate evolving regulatory landscapes and to address the shifting needs and demographics of mobile employees and their families. For example, forthcoming changes in the Schengen visa regulations may make it harder for companies to staff positions with business travelers, potentially pushing a trend toward more long-term assignments — which could significantly shift how business has been done in the EMEA region.

As policies take shape in the year ahead, it’s unclear what additional immigration-related changes might emerge, and their impacts on mobility budgets, so it’s important to stay prepared for potential new challenges.

 
 

"One of the most widespread misconceptions I hear is that delivering exceptional experiences for mobile employees is only achievable through additional investments or policy benefits — creating the perception that rising costs are unavoidable for maintaining employee satisfaction. Mobility managers should challenge this assumption and look for organic ways to improve the employee experience, such as by improving policy transparency, offering personalized support and/or leveraging technology to streamline processes."

Lucy Penney, Graebel vice president of EMEA client services

 
 

Getting a grip on the mobility cost conversation

In my interactions with Graebel clients, it’s becoming clear that mobility costs will always be a topic of conversation and less of a transitory phenomenon. I would encourage mobility managers to flip the conversation from one of cost to one of value by demonstrating the value of mobility as a driver of enterprise strategy and success. While mobility managers and their relocation management company (RMC) partners must rise to the challenge of managing costs, we also must seize the opportunity to broaden the conversation, going beyond costs and demonstrating the value of mobility as a driver of enterprise strategy and success.

Here are some ideas on how:

Leverage data and trends: Mobility professionals should use research, program data and insights to educate their organizations about the value of mobility. By benchmarking mobility programs and leveraging data — especially mobility outcomes and ROI data — to inform decisions, mobility managers can position themselves as expert advisors, helping business leaders identify trends while making the case for mobility investments.

Align mobility programs with business goals: Mobility managers should ensure they have visibility into corporate goals and strategies, to identify and communicate ways that mobility can align and support. For example, if a company’s growth plan calls for technology or manufacturing investment in a particular region, mobility managers can anticipate and advise on sourcing talent to manage those investments effectively — which may require relocating staff with relevant expertise. Being proactive and taking on an advisory role, not just a program management role, makes it more likely mobility will be supported as an enabler of strategy.

Remain transparent, flexible and creative: To establish themselves as trusted advisors, mobility managers must demonstrate how mobility serves as a value-driver, not just a cost to be managed. Achieving this requires transparency about the factors impacting costs, outcomes and employee experiences. Megatrends like inflation and geopolitical instability naturally shape mobility management, much like shifting consumer preferences influence sales and marketing strategies. The key is to address these factors openly, proactively and effectively, using business-focused communication to implement a clear plan to balance cost, value and mobile employee satisfaction and experience.

Creative problem-solving can go a long way toward managing costs and positioning the mobility function as a solutions-oriented business partner. For example, Graebel recently introduced the “Move it or Buy it” calculator as part of our new guided experience called “Plan My Move” on the digital move planning tool, Graebel CitySwitcher®. This resource helps compare the expenses of transporting essential furnishings with a relocating employee to the costs of purchasing new items upon arrival in the destination market. Results from this tool have revealed opportunities for cost savings and reduced stress regarding shipments in certain cases.

Mobility managers should also consider sustainable practices as an avenue to reduce costs. For example, Graebel partners with Home Sweet Home to extend its Discard and Donate Program, helping mobile employees donate any unwanted household goods to those in need before their move. The program has reduced moving costs by 3 to 4% in many cases and cut carbon emissions by up to 250 kilograms, contributing to more sustainable relocation journeys and impactful cost savings.

Lean into trusted partnerships: The most effective mobility programs are those where mobility managers and RMCs are true partners in value creation, not just administration. This requires trust, transparency and open communication about program priorities, strengths, weaknesses, and the role of mobility within the broader talent mobility strategy. It also necessitates responsiveness and flexibility to adjust programs and policies swiftly in a dynamic environment.

Another important aspect is fostering a strong RMC partnership grounded in the right mindset, including an openness to addressing common mobility myths and assumptions. My London-based teammate Lucy Penney, Graebel vice president of EMEA client services, said: "One of the most widespread misconceptions I hear is that delivering exceptional experiences for mobile employees is only achievable through additional investments or policy benefits — creating the perception that rising costs are unavoidable for maintaining employee satisfaction. Mobility managers should challenge this assumption and look for organic ways to improve the employee experience, such as by improving policy transparency, offering personalized support and/or leveraging technology to streamline processes."

To Lucy’s point, the true key to creating an exceptional mobile employee experience is delivering great service every step of the mobility journey. This includes everyone from the RMC supporting program management, policy, data and insights to housing partners; the moving crew responsible for packing, shipping and unpacking household goods; immigration experts handling entry and work permits; and destination management experts assisting with crucial needs like finding the right schools for mobile families. Exceptional experiences don’t have to come at a higher cost. Mobility managers should expect high service standards from their RMCs and supplier networks to ensure a seamless relocation experience for employees at every stage of the process.

Graebel leverages insights, learnings and best practices gained from supporting mobility programs for some of the world’s best-known companies, to help clients elevate the mobility function, align with corporate strategy and deliver exceptional results and value for mobile employees — while maintaining cost efficiency. I encourage you to reach out to your Graebel representative for more information on mobility trends and solutions or contact us to learn more.

About the Author

Joe Jackson serves as the SVP of client services and account management practice, after serving as SVP of business development for nearly five years. He is accountable for our clients' health, retention and driving innovations across the practice. Having joined Graebel in August 2014, Joe previously worked for another third-party relocation company for more than 14 years. His extensive background has included positions in operations management, global account management and global director of client services for numerous multinational corporate accounts. There, his leadership earned him the company's President’s award for his role on a customer-facing sigma initiative. Joe attended the Ancell School of Business at Western Connecticut State University. He holds a Certified Relocation Professional (CRP®) and Global Mobility Specialist (GMS®) designation from the Worldwide ERC®. Additionally, Joe is certified in Lean Sigma and is a green belt in Six Sigma operations and project management."

Profile Photo of Joe Jackson