Smart Strategies for Saving Money on Employee Relocation

Relocating employees is sometimes necessary, but it’s rarely cheap. From moving household goods to temporary housing and real estate support, the expenses add up fast, and if you’re responsible for managing a relocation program, you know how challenging it is to balance cost control with a positive employee experience.

That balance is possible—especially when you take a closer look at how your relocation program operates. The strategies below can help you identify cost-saving opportunities without compromising support for your workforce.

Audit Your Relocation Program for Hidden Costs

Relocation costs aren’t always easy to track. Many companies lose money without even realizing it, simply because fees and markups go unchecked.

Start with Transparent Fee Structures

Some relocation management companies (RMCs) layer in hidden fees for services like household goods shipping, home sales, and temporary housing, significantly inflating your total spend. 

Take the time to understand where those charges are coming from—ask for complete transparency, especially around tax gross-ups and administrative fees.

Demand Line-Item Clarity from Vendors

Make sure every vendor breaks down costs on a line-by-line basis. A detailed quote helps you fairly compare services and see where you might be overspending. 

You can ask moving companies for a “tariff” that outlines their pricing methodology, and better yet, work with a relocation partner that offers side-by-side comparisons from multiple service providers.

Reevaluate Lump Sum Relocation Approaches

Lump sum relocation packages offer simplicity—but they may be costing more than you think.

Understand the Hidden Costs

When employees are handed a check and expected to manage their own move, they often overpay or pick services that aren’t that efficient, meaning higher costs for you and added stress for them. These payments are also taxed as income, which could force you to gross-up the amount to keep the relocation benefit meaningful.

Expore Managed Relocation Budget Options

Managed budget programs are a more balanced approach because your employees still have flexibility, but any unspent funds are returned to the company. Plus, they receive expert support to manage their move, reducing the risk of poor decisions or lost productivity. You keep control over costs—and your employees stay focused on the job.

Embrace Fixed-Fee Home Sale Programs

Selling a home is one of the most expensive parts of employee relocation. Predictability here can lead to big savings.

Make Costs Predictable and Reduce Tax Burdens

Traditional home sale programs come with fluctuating fees and potential tax issues if a home isn’t sold quickly. Fixed-fee options simplify this because you pay one amount up front—no surprises—and reduce your exposure to taxable assets sitting on your books.

Eliminate Risk from Prolonged Sales

If a property lingers on the market, it can cost you in maintenance, liability, and taxes. Fixed-fee programs shift that burden to your relocation provider, helping you stay on budget while still supporting your employee.

Leverage Small Shipment and Express Move Solutions

Not every employee needs a full truck and crew. In many cases, smaller and faster is better.

Right-Size the Move Based on Living Situation

Employees moving from a one-bedroom apartment don’t need a full-service moving package. Small shipment solutions are faster, more affordable, and still offer professional packing and guaranteed delivery.

Add Value to Lump Sum Moves

You can improve the experience for lump sum recipients by offering access to express moving services at negotiated rates. It reduces decision fatigue and increases satisfaction, without increasing the budget.

Revisit and Standardize Household Goods (HHG) Policies

Your household goods policy plays a major role in relocation costs, and it should be reviewed regularly.

Set Boundaries Around What Gets Moved

Some companies cover oversized items like boats, hot tubs, or gym equipment without realizing how much those add to shipping costs. Define what’s reasonable to move—and what isn’t—based on the employee’s role and the relocation distance.

Review Annually for Cost-Effectiveness

As your workforce and policies evolve, so should your HHG policy. An annual review helps identify unnecessary inclusions and ensures alignment with your current budget strategy.

Compare Vendors and Source Competitive Bids

Loyalty to vendors has its place, but so does healthy competition.

Avoid One-Size-Fits-All Solutions

If your RMC uses the same vendors across the board, you may be missing out on better rates. Require multiple bids for services like household goods shipping and housing. It keeps everyone honest and opens the door to savings.

Work With Relocation Partners Who Prioritize Flexibility

You want a partner who adapts to your business—not the other way around. Look for providers who offer a broad supplier network and a willingness to work within your budget structure.

Track Relocation Spend and Performance

You can’t cut costs if you don’t know where the money is going.

Use Analytics to Spot Trends

Track spending across tiers, roles, locations, and policies. This gives you insight into which parts of your program drive up costs and where adjustments can be made.

Benchmark Against Industry Norms

Measure your program’s performance against others in your industry. It helps you stay competitive—and gives you leverage when renegotiating with suppliers.

Explore Supplier Diversity Programs

Diversity isn’t just good for culture—it’s good for your bottom line.

Tap into Minority, Veteran, and Women-Owned Vendors

Many certified vendors in the relocation space offer competitive pricing and bring fresh perspectives to the process, and working with them can also align with your broader diversity, equity, and inclusion (DEI) goals.

Unlock Cost Savings and New Talent Networks

Some suppliers even offer tax incentives or qualify for state and federal programs, and you might also find networks that support smoother transitions for employees moving into new communities.

Saving Money On Employee Relocation: FAQs

Does switching to fixed-fee programs actually reduce overall relocation spend?

Yes, fixed-fee programs cap your expenses and protect you from the unpredictable costs of prolonged home sales.

How can HR save the company money?

HR can reduce relocation costs by negotiating better vendor rates, implementing fixed-fee or managed budget programs, eliminating unnecessary benefits, and regularly auditing policies. Partnering with a relocation provider that tracks performance metrics also helps identify where spending can be trimmed without affecting employee satisfaction.

Is it possible to mix lump sum and managed policies within the same program?

Absolutely. Many companies use hybrid models to give flexibility while still managing costs and compliance.

Final Thoughts

Controlling relocation costs doesn’t mean cutting corners. It means refining your approach, working with the right partners, and keeping a close eye on where your money goes. From reviewing your HHG policy to adopting fixed-fee home sale programs, the right strategy can lower costs and raise employee satisfaction.

ARC Relocation works with HR teams every day to design efficient, high-value relocation programs that reflect your company’s goals.

If you’re ready to start seeing savings, contact us at ARC Relocation today.