Fighting false economies

Supermarkets are masters of persuasion. Buy two, get one free. It feels like a bargain. But if you are anything like me, even though I only want one yoghurt, I tell myself that I should exploit the economy of scale. Then, a week later, those second and third yoghurts are hidden at the back of the fridge, slowly passing their use-by dates. A false economy in action.

I am always falling for false economies. I don’t think it is because I am particularly gullible, but it is part of human nature to be tempted by the lowest number on the price tag, rather than the real cost in the long run.

False economies are everywhere.

Take jeans. I sometimes go for the cheaper option, but end up replacing them more regularly than if I’d bought the more expensive pair, spending more in the long-run.

I buy tickets on budget airlines without factoring in the cost of luggage that I realise I need. Whilst it is free to get to Findel on public transport in Luxembourg, there is an expensive rail ticket at the other end to get me from London Stansted to the real London.

If I fall for false economies, my guess is that companies fall for them too. Training budgets are often the first to go when the business environment gets tough. But what is the cost of an untrained workforce, who may then make mistakes and be less motivated? Companies delay upgrading IT systems to save money, only to discover that the complete overhaul they later find themselves needing to do is more costly, disruptive, and urgent because the old system has collapsed.

False economies give us the warm glow of thrift in the short term, while quietly draining our wallets, our time, and our energy in the long term. They play on impatience: the desire to cut costs today, even if it costs more tomorrow.

Which brings me to this week’s Office Hours theme: relocation agents. Some companies think they can save money by not offering relocation support.

Whilst I incur a cost by replacing cheap jeans more often, the cost is bearable and doesn’t threaten my livelihood, it is inconsequential compared to the cost and effort that goes into re-hiring people. And onboarding people, training them, and integrating them into the company? If you fall for this false economy, your business may not survive.

What does relocation involve? What support structures are in place? Stephane Compain of LuxRelo and Matilde Fernandes of RelOK help to answer these questions by sharing the origin of the businesses, the key ingredients for a successful posting, and some of the challenges facing those relocating.