By: Sam Hoey | CRP, GMS

September 1, 2020

It is not too early to start thinking about your company’s 2020-21 corporate relocation budget. Many companies start reviewing budgets on a regular timeframe. However, the year 2020 has been anything but regular. Every nation in the world has been dealing with the impact of the COVID-19 pandemic. From border restrictions to stay-at-home orders, the vast majority of companies have been facing multiple disruptions.

As a result, these disruptions are bound to have some type of impact on corporate budgets. Companies will find it difficult to determine the “new normal” in their business and industry.

Issues That May Lead to 2020-21 Corporate Relocation Budget Increases

Business Growth

Some companies have seen increasing demand for their products and services. For example, Amazon’s recent second-quarter report earnings call indicates tremendous growth for the company:

  • Earnings per Share: $10.30 (average analyst’s estimate: $1.46)
  • Revenue: $88.9 billion (average analyst’s estimate: $81.56 billion)
  • Sales: up 40% year over year in the quarter
  • Drivers: online retail, cloud services

Of special note is Amazon’s online grocery and delivery services, with significant progress in this area.

New Corporate Expansions

Other companies are planning significant expansions. Nikola Motor Company announced it will break ground on a manufacturing plant in Coolidge, Arizona. The plant should create thousands of jobs within Pinal County. Nikola expects to produce up to 35,000 hydrogen electric and electric semi-trucks.

Not to be outdone, Tesla recently announced it will build its next factory in Austin, Texas. Known as a Terafactory, the next Tesla Gigafactory will make the Tesla Cybertruck electric pickup truck and the Model Y. Additionally, Tesla’s headquarters location may also soon relocate to Austin.

Issues That May Lead to 2020-21 Corporate Relocation Budget Changes

Immigration Limitations

Beyond business growth and new corporate expansions, other issues may lead to budget changes. Limits on immigration may decrease a company’s ability to hire foreign nationals to work inside the United States. However, alternatives may still allow companies to hire qualified staff. These alternatives require specific conditions, with possible increases in costs in some areas such as travel and facilities.

Need for Highly Qualified Staff

Other issues could include staffing requirements. Some industries such as healthcare have seen a dramatic rise in the need for corporate housing solutions. This is due in part to a dramatic increase in a truly mobile workforce to deal with effects of the COVID-19 pandemic.

How Should a Company Approach Reviewing its 2020-21 Corporate Relocation Budget?

Every company looking to review its 2020-21 corporate relocation budget should consider the following 5 specific points:

1. Relocation Policy Review

It is imperative that companies undertake a review of their relocation policy. Best practice is to review this policy every 12 to 18 months. With changes impacting nearly every component of a company’s 2020-21 corporate relocation budget, a policy review will help define areas that should be examined for compliance, utilization, and cost savings.

Do you know if your company’s business continuity plan includes points related to its relocation program? A relocation policy review will highlight areas that should be considered, such as employees on temporary assignment who may need to be quickly reassigned to a different location.

2. Historical Data Review

A thorough review of expenses will provide a good indicator of areas in need of attention. That being said, it is now critically important to also factor in multiple forces that may impact the future budget, including:

A number of points specific to each company’s needs can be considered in light of new business operating guidelines.

3. Significant Cost Generators

Many costs in relocation budgets are due to significant cost generators. Often these costs are driven by specific activities such as moving an employee to a new destination, or reimbursing temporary housing costs during a short term assignment. A thorough review should include examining these activities in detail as they impact the relocation budget:

Be sure to compare and account for cost differences between global relocations and domestic relocations.

4. Accounting Accruals

Companies often account for business expenses that occur in one period by setting aside amounts known as accruals. Future expenses are then allocated toward the accrual amount. Reviewing your 2020-21 corporate relocation budget, consider those expenses that might be better accounted for through accruals.

A good practice is to review the prior year’s accruals to determine if similar amounts should be in the budget through accrual accounting methods. This will also help ensure a smoother expense tracking and recording process. It may also assist the company with cash management requirements.

5. 2020-21 Corporate Relocation Budget Strategic Initiatives

Consider the impact of any strategic initiatives that might result in additional employee relocations, new hires, or corporate expansions. Is the company planning to build a new manufacturing facility or open a sales office? Are there discussions of future partnerships with other firms? Are new talent management programs in development?

With the advent of COVID-19, today’s workforce is even more responsive to changing company requirements. Given the swift nature of how companies responded to the pandemic, be sure to plan for future contingencies, changes, and disruptions.

What Should Employers do for Their 2020-21 Corporate Relocation Budget?

Employers should work with a Relocation Management Company (RMC) that has knowledge and experience with relocation budgets and managing for contingencies. RMCs are ideal sources for industry best practices. RMCs also have valuable knowledge on global issues relating to immigration, travel, and how the relocation industry and service providers are changing to meet new requirements due to the COVID-19 pandemic.


GMS’ team of global relocation experts has helped thousands of our clients understand how to develop and prepare robust relocation programs that follow industry best practices. Our team can help your company understand how to account for each of these 5 specific points during the review of its 2020-21 corporate relocation budget.

GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.

Contact our experts online to request a relocation policy review as part of your 2020-21 corporate relocation budget review process, or give us a call at 800.617.1904 or 480.922.0700 today.

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Senior Vice President, Global Account Management Sam joined Global Mobility Solutions in 1996 and has a unique perspective with her 25 years of industry experience. Samantha offers her clients relocation expertise and a commitment to excellence in her. Her proficiency in orchestrating the BVO and GPO Programs, as well as relocation policy design and implementation, are invaluable assets to the accounts she manages. Her experience in administering Pre-Decision Relocation services to enhance the recruiting process further demonstrates her unique abilities to service her clients. Samantha’s diverse experience, leadership, and outstanding communication skills enable her to manage the relocation process for her clients with finesse and polished professionalism.

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