Strategies for reducing costs on your mobility program

Cost containment, cost reduction, cost management … companies use different terms but, in the end, it all comes down to the same key question: how can we save money on our mobility program?Strategies for reducing costs on your mobility program

This is a question we’re hearing a lot from prospects and clients. Requests for proposals often request proof to demonstrate how we deliver cost savings and control cost management. Similarly, when we discuss continuous improvement programs with clients, a key measurement addresses the question “how can we help to reduce costs?”

Achieving your cost management objectives

Crown is well-suited to facilitate cost management objectives. Our experienced and knowledgeable team of global mobility professionals, combined with the hands-on expertise of our account management teams, consistently decrease costs for our clients. 

So, where can we begin to look for cost savings? As well as offering different approaches for first-time assignees and seasoned assignees (with different financial benefits for each), we also focus on:

  • Tax assistance
  • Household goods shipments
  • Welcome Pack tools
  • Cash for housing
  • Departure services

A journey of a thousand miles …

The Chinese philosopher Laozi said: “A journey of a thousand miles begins with a single step.” The first step we need to take is our joint approach to cost savings. It may be different for each company – and it also may be different at various points along the mobility program journey. To make sure that we are making progress towards reducing costs in mobility programs, we must:

  • Make it a priority
  • Make it a personal goal to reduce costs
  • Reach an agreement on the approach so that the result represents real value to the program and, importantly, the bottom line

The differences between cost savings and cost avoidance

Research has shown that the expertise required to manage a global program is significant and involves many skills; in addition to the tactical aspect, the active management of the investment in mobility is vital, too. To address costs, experience is key to knowing beforehand where the cost spikes can occur. It’s also important to understand the difference between cost savings and cost avoidance.

Cost savings 

Cost savings addresses the reduction of existing baseline costs through value-added activities. These should reflect directly on financials and be sustainable and long-lasting. Some cost-saving areas to explore are:

  • Changing providers
  • Outsourcing
  • Using complimentary storage
  • Negotiating lower rates for long-term rentals
  • Negotiating lower rates with rental car companies

Cost avoidance 

Cost avoidance is used to minimize or cancel out negative bottom line impacts to clients. Strategies can include:

  • Comparing market benchmark data to ensure the best value is attained
  • Providing advice on shipments and how to reduce associated volume
  • Negotiating a fee waiver for an individual assignee
  • Expediting lease negotiations on long-term rentals to reduce time in temporary housing
  • Addressing the value of pre-assignment counselling to ensure assignment success

Getting the most value

Engaging key performance indicators that promote the active management of costs is the best way to ensure your company is on track to getting the most value for its relocation investment.

Written by Tricia Cochran, Director, Client Services – North America.