CRP Relocation Cost Management and Budgeting 2

Question 1

A relocation coordinator notices that household goods shipment costs are consistently 20% over budget. What is the BEST first step?

Accepted Answer

Audit actual weights and services versus original estimates to identify variance drivers

Answer

Auditing actual versus estimated costs identifies specific variance drivers such as underestimated weights, accessorial charges, or poor estimating practices before taking corrective action.

Question 2

What is a 'managed cap' or 'flexible cap' policy structure in relocation?

Accepted Answer

A tiered benefit structure where the cap adjusts based on family size, distance, or employee level

Answer

A managed or flexible cap adjusts the maximum benefit amount based on objective factors like family size or distance to better match actual employee needs while controlling costs.

Question 3

Which relocation cost component is typically the LARGEST single expense for a homeowner relocation?

Accepted Answer

Home sale assistance (BVO or GBO programs)

Answer

Home sale assistance programs, including broker's commissions, closing costs, and potential equity losses, consistently represent the largest cost component in homeowner relocations.

Question 4

In relocation budgeting, what does ROI (return on investment) analysis most commonly measure?

Accepted Answer

The cost of the relocation compared to the value the employee brings to the new role or avoided hiring costs

Answer

Relocation ROI analysis weighs total move cost against business outcomes such as revenue generated, cost of replacing the employee externally, or productivity value delivered.

Question 5

What is the purpose of a relocation 'repayment agreement' (also called a clawback)?

Accepted Answer

To recover relocation costs from the employee if they leave the company within a defined period

Answer

A repayment or clawback agreement protects the employer's investment by requiring the employee to return all or a prorated portion of relocation costs if they resign within the agreed timeframe.

CRP - Certified Relocation Professional Practice Test

CRP - Certified Relocation Professional Practice Test

CRP Relocation Cost Management and Budgeting 2