Measuring the return on investment (ROI) for global mobility programs is a perennial challenge, but an important one. Leaders want to see the business impact and value created by relocating employees internationally. But calculating ROI for mobility involves many variables that can be difficult to quantify.
In a recent discussion on The View From The Top, global mobility experts broke down the key cost components that go into an ROI analysis:
Hard Costs
The most obvious are the direct cash expenses related to relocations, such as:
- Vendor fees for relocation services
- Immigration costs
- Employee compensation packages
- Travel expenses
These hard costs are relatively straightforward to track and calculate.
Soft Costs
More difficult are the "soft" time and resource costs absorbed across the organization:
- The mobility team's time administering programs and managing vendors
- Time from legal, finance, HR, IT and other functions supporting moves
- Opportunity costs from employees being distracted and less productive during relocations
Quantifying this time investment across departments is crucial for understanding the full organizational costs.
Employee Costs
The greatest hidden cost is often the impact on the relocating employee's productivity and engagement. Time spent researching destinations, finding housing, setting up banking, and getting settled with family translates directly into lost productive work hours. An unhappy trailing partner can derail assignments completely.
Measuring ROI also means forecasting the cost of reassigning or rehiring if an assignment fails - exponentially increasing the costs. Conversely, investing in a great relocations experience can pay dividends long-term by increasing engagement and retention of mobile talent.
Risk Costs
Compliance risks like immigration, tax, data privacy, and cybersecurity breaches can generate massive regulatory penalties and reputational harm if not properly managed. Calculating the costs of such worst-case scenarios is difficult but important.
Bringing It All Together
Armed with a full account of costs – hard, soft, employee impact, and risks – mobility teams can model multiple future scenarios. For instance, comparing current state costs against the expected ROI from improving relocation technology, outsourcing more services, or adjusting policies. Building a strong data-driven business case is key for justifying change and demonstrating mobility's strategic value to business leaders.
While challenging, measuring ROI is critical for mobility teams to elevate their strategic impact and secure a "seat at the table." By quantifying costs across the board, organizations can make informed decisions to optimize their mobility spend and realize the expected returns.
Contact us to learn more about how Benivo can help you run ROI calculations.
