Providing your relocating employee with a Lump Sum
payment rather than offering them assistance through Farthingtons can be
surprisingly expensive —particularly in terms of lost productivity.
Lump Sums are used for many reasons, taking
pressure off Human Resources personnel and also allowing the employee a degree
of control over how their relocation is managed.
But, if you treat this as an
investment opportunity it is easy to determine that outsourcing to Farthingtons
will actually enhance everyone’s experience and most importantly, have a
positive not negative effect on the transferee’s
productivity.
Working on accepted
principles, we find that:
Job Value -
the real cost of an
employee, the benefits they bring to the company, their support network etc., is
about three times the employment cost (salary, taxes,
benefits)
Hourly Cost - every hour the employee spends dealing with their
relocation will cost the company at least three times the Job Value
Efficiency - factoring in the time spent waiting on the phone
for an automated switchboard to put you through (usually to a voice mail),
travel, web searches, dealing with new and different tasks such as visa
applications, rental agreements, bank accounts, drivers licenses, vehicle
insurance, health services etc increases time spent (for ‘spent’ assume
‘wasted’) by a minimum of 50% for simple tasks and as much as 200% for ones that
are complex or involved.
Many tasks that we normally
categorize as simple become complex as lack of knowledge complicates and slows
down processes. Think about driving in a new city in a new
country:
-
Can you use your current Drivers License?
-
Do you need to take a new test?
-
Is your driving record valid?
-
What paperwork do you need?
-
How do you arrange vehicle insurance?
-
Can you apply beforehand?
-
Do you need a medical/sight test?
-
Do you need to have a local Social Security
number?
Without Farthingtons local
knowledge it is easy to see how long it would take to find out and organise any
aspect of relocating.
Assuming a relocating
employee earns $120,000 (£60,000) per year and it takes them just three hours to
deal with establishing the driving criteria, the real cost is probably close to
$1,000 (£500).
If we expand that into two
full weeks (spread over a couple of months) to deal with a relocation, the true
cost escalates — probably to $25,000 or more plus the lump sum
payment!
.....and then there are the
tax issues.
You will be pleased to know
that Farthingtons fees including 'end to end' expense & tax management, are
considerable less - and your employee remains productive throughout.
