05 Nov, 2015 How to Successfully Present Relocation Program Budgets to Your CFO
Speaking with the Chief Financial Officer (CFO) of your company about relocation can be a daunting task. However, he or she is often one of the most influential people in relocation decisions. It is imperative, as a talent acquisition manager, that you determine how to foster effective communication with the CFO on this topic.
First, it will be beneficial to understand the potential questions a CFO may have concerning relocation. As the individual responsible for all financial statements and accounting actions, he or she will be inclined to thoroughly analyze your expected relocation budget.
As the team member with meticulous knowledge of the relocation program, it is your duty to elucidate all relocation costs with concrete historical data. You also carry the burden of illustrating the efficiency of your relocation program and its overall value in recruiting efforts.
Discuss Facts and Figures
The most advantageous tactic to use when speaking with your CFO about relocation is to share the detailed costs up front. While complete transparency may seem counterintuitive, it actually bolsters your ability to develop trust between you both. You also must ensure your numbers are accurate and up-to-date. Building a policy with an experienced relocation management company can greatly increase the probability of having access to current and correct information. Also, a budget created in conjunction with a policy is more coherent to the recruiting/HR department and the CFO. At Relocation Coordinates International, we formulate our relocation policies based on our clients’ distinct needs.
It is also crucial that you gauge your CFO’s knowledge of relocation. If he or she has a modest understanding of the process, you should define the general components of relocation and indicate high price benefits your company offers. A CFO may fixate on monetary figures, but you must be adept at defining the long-term worth of attracting and hiring top quality employees. This can be rather arduous since the benefits of obtaining an exemplary employee are not often immediate. However, it is feasible to explain this with your extensive knowledge of the process and the guidance of a relocation management company.
Be Candid About Exceptions, Accruals and Other Possible Drawbacks
The relocation process is never 100 percent predictable, and each relocation is as unique as the transferees being moved. For instance, unlike more prevalent type of home appraisals for mortgages, relocation home appraisals are only valid for a set time period and may be adjusted later. Also, your financial department may not be aware that relocations are not always closed in the year they were initiated. We know these as “accruals” in the relocation industry. Utilizing a relocation management company’s tracking system will guarantee you obtain accurate data on accruals to share with your CFO.
In addition to these obstacles, there are exceptions that must be integrated into the budget to satisfy certain transferees’ needs. Effective exception management is critical to decreasing inconsistencies that can sabotage any efforts to predict relocation costs. At RCI, we suggest constructing a strict protocol for permitting exceptions. Another favorable strategy is assigning the responsibility of regulating all exception requests to one person on your team or with your relocation provider. Make certain the person in this position frequently updates your CFO with trends and fiscal data, because it is essential that your CFO comprehends these unexpected complications. When he or she is prepared, unplanned expenses will not seem as detrimental.
Communication Is Key
Maintaining consistent communication is the most reliable method for cultivating a positive relationship with your CFO. Begin by confirming he or she has at least a basic understanding of the relocation process and is cognizant of all your current relocation policies. Do not underestimate the importance of notifying your CFO as soon as expenses or timelines change. Though many CFOs will wish to concentrate on numbers and deadlines, you should be confident in your ability to advocate for the overall significance of relocation programs. Do not shy away from asserting potential benefits the company will reap from attracting noteworthy talent. If your aim is to enhance a current program or to design a new relocation policy, hire a trusted relocation management company to assist you.