A relocation feasibility analysis is a structured study that fully defines the risks and rewards of moving a facility, in support of a go or no-go decision. It brings the internal and external factors weighing on a move into one framework: employee impacts, projected savings and penalties, real estate, and qualitative advantages, all measured against the option of staying put.
WDG Consulting (Wadley Donovan Gutshaw Consulting) treats advising companies on whether to relocate as a core specialty. The firm has led corporate site selection since 1975 and is headquartered in Bridgewater, NJ, with additional offices in Jacksonville, FL and Dallas, TX. This guide explains what a feasibility analysis covers, how companies use it to decide, and how employee retention risk is quantified.
What Is a Relocation Feasibility Analysis?
A relocation feasibility analysis answers one question before a company commits to a move: is relocating worth pursuing? It does so by defining the risks and rewards of the move in support of a go or no-go decision.
The analysis is organized around three parts:
- Dialogue with management. The study begins by establishing the move rationale, affected business units, a base case comparison, relocation scenarios, major concerns, move timing, tasks and responsibilities, and the confidentiality protocol.
- Relocation impact analysis. Human resources, economics (projected savings and penalties), real estate, and qualitative advantages are each assessed.
- A decision. The findings support a go or no-go recommendation. If the answer is go, the next question is where.
For headquarters projects, the framework opens with a questionnaire that defines what is known while provoking thought about what is not. Sample questions include why a move is being considered, which strategic initiatives it would support, what constitutes headquarters operations, whether geographic constraints or preferences apply, whether a local or short-distance move should be considered, what the tolerance is for people loss among critical positions, and when the optimal time to move would be, such as at current lease expiration.
What Does a Corporate Relocation Feasibility Study Include?
A corporate relocation feasibility study includes an analysis of human resource impacts, economic impacts, real estate, and qualitative factors, built on a defined base case and one or more relocation scenarios.
Feasibility Study Components Checklist
Dialogue with management
- Move rationale
- Affected business units
- Base case comparison
- Relocation scenarios
- Major concerns
- Move timing
- Tasks and responsibilities
- Confidentiality protocol
Human resource impacts
- Mapping of the current employee population
- Mass transit and highway linkage to the site
- Assignment of the most efficient mode of transportation
- Projection of total travel time
- Incremental travel time and cost per employee
- Projected attrition and retention by staff level, department, and critical personnel or function
Economic impacts
- One-time nonrecurring costs
- Recurring annual operating expenditures
- Economic incentive offsets
- Comparison to the business-as-usual case
- Payback of the one-time relocation cost
Real estate impacts
- Cost and utilization of existing space
- Existing space disposition
- Lease vs. buy in a new location
- Temporary dual occupancy
Qualitative advantages
- Air service
- Customer proximity
- Talent recruiting
- Company branding and image
For headquarters relocations, WDGC also analyzes qualitative factors such as customer proximity, industry growth, R&D interface, and affecting internal change.
How Do Companies Decide Whether to Relocate Their Business?
Companies decide whether to relocate by comparing the economics, workforce impacts, and strategic benefits of a move against a business-as-usual case, then making a go or no-go decision on the combined result.
Four questions typically drive that decision.
Is there a clear rationale?
Every study starts by defining why a move is being considered and which strategic initiatives it would support. Which business units are affected, and what the major concerns are, are settled at this stage.
Do the economics work?
Relocation economics quantify both one-time nonrecurring costs and recurring annual operating expenditures. The new location’s economics are often compared to a business-as-usual case. Strictly from an investment return perspective, annual savings at a new location ideally support payback of the one-time relocation cost within three years of start-up.
A move does not have to clear an ideal payback threshold to be worth considering. In a WDGC article on corporate relocation, principal Dennis J. Donovan describes a client study of a Fortune 500 headquarters relocation from a major Northeast city. The study found the move to be a marginal financial proposition that was not deleterious from an economic standpoint, with projected attrition within acceptable bounds and added benefits in growth flexibility and intellectual capital risk minimization. The article also notes that many companies relocate for non-financial reasons, such as getting closer to customers.
Can the workforce absorb it?
WDGC describes the human element as perhaps the most important, and the least predictable, aspect of a location decision. New locations are intended to enhance a business, which is difficult to do if key staff are lost in the process. Retention risk is therefore quantified before any commitment is made.
Should the move be local or long distance?
A local move and a longer-distance move carry different HR consequences. In one WDGC engagement, a client whose research site in New Jersey had been sold needed to relocate. WDGC examined the feasibility of both local options within the tri-state area and longer-distance options. A long-distance move would have incurred high HR and attrition costs, so WDGC recommended a local move. Access to talent sited the project in Manhattan, and the client followed the recommendation.
The results feed decision documents. The 10-year cash flow table produced for headquarters relocation studies can be used for board and committee approvals, project budgeting, and leverage during the incentives negotiation process.
Cost of Relocating vs. Cost of Staying
The comparison is built on the business-as-usual case. Cost savings or penalties from a move are measured against it.
| Cost Element | Relocating | Staying (Business-as-Usual Case) |
| One-time costs | Separation (stay bonus, severance, replacement), employee relocation expenses, commutation assistance, transition management, parallel staffing | Baseline for comparison |
| Payroll | Adjusted for market variations at the new location | Current payroll costs |
| Occupancy | Adjusted for market variations at the new location | Current occupancy costs |
| Air travel | Adjusted for the new location | Current air travel costs |
| Corporate taxes | Income, sales, and personal property taxes at the new location | Current corporate taxes |
| Economic incentives | Expected offsets reduce annual costs | Baseline for comparison |
| Output | Projected savings or penalties, 10-year cash flow, payback of one-time costs | Reference point for every comparison |
Recurring cost projections include all key geographically variable expenses: payroll, occupancy, air travel, and corporate taxes. Annual costs are adjusted by any expected economic incentive offsets.
Tax and Incentive Comparison
Corporate taxes are one of the geographically variable expenses in the recurring cost model, and WDGC includes income, sales, and personal property taxes in the projection.
Economic incentives enter the analysis as offsets. WDGC’s position is that business incentives should never drive the location decision, even though the cost offsets can be instrumental to a project’s success. In a relocation feasibility analysis, expected incentive offsets adjust the annual cost projections so that the new location’s economics reflect what the company would realistically pay.
Operational Disruption
Operational disruption is the risk that a move interrupts the business while it is underway. WDGC’s HR group move services are designed to minimize operational disruption if a go decision is made. The team includes HR mobility specialists who provide customized HR planning and implementation services.
Clients can select from a menu of services that includes attrition management, budget planning, communications, counseling, employee surveys, familiarization tours, implementation planning, management briefings, a relocation center, and policy design. The stated benefits include an overall relocation plan intended to maximize the firm’s strategic goals, on-time and on-budget delivery through management and cost control, oversight of suppliers, objective analysis of existing HR programs and policies, a critique of the existing communications strategy, and project management.
Move timing is also part of the initial dialogue with management. Cost modeling accounts for transition management and parallel staffing as one-time costs.
How Do You Measure Employee Retention Risk During a Company Relocation?
Employee retention risk is measured by projecting how each employee will respond to a move, then adding up the results by staff level, department, and critical personnel. When faced with a worksite relocation, employees choose to commute (if the move is local), relocate (if it is remote), or separate, meaning attrit or retire.
WDGC quantifies this with two connected tools.
The Employee Action Model. This proprietary analytical tool is based on the mobility characteristics of the employees eligible for relocation. It quantifies retention and separation by staff level, department, and critical personnel or function. WDGC describes gauging HR impacts, for both short-distance and long-distance moves, as one of its strongest analytical capabilities.
Commute impact analysis. For local moves, GIS mapping software constructs alternate commute routes from each employee’s address to each test site, using the most efficient mode or modes of available transportation: auto, rail, bus, or ferry. Commute times are door-to-door and include walk time to and from the train station and transfer delays. Related commute costs such as gas, tolls, fares, and parking can be calculated. Exposure to extreme traffic delays is also assessed.
The analytic result is projected attrition and retention based on individual employee commute impacts and mobility indicators. Attrition exposure is driven by a combination of three factors:
- Excessive total commute time and incremental change
- Added commute expenses
- Poor employee mobility
The output supports business disruption and cost expectations and serves as a guide for client decision-making and internal planning. Attrition costs flow directly into the economics, since one-time costs include separation (stay bonus, severance, replacement), employee relocation expenses, and commutation assistance.
Talk to a Relocation Feasibility Consultant
WDGC’s role is flexible. The firm can lead the study team or provide selected expertise, such as labor market metrics, as a dedicated team member. WDG Consulting also offers assurance of total objectivity and anonymity, avoiding the conflicts of interest inherent in downstream project revenue such as real estate brokerage.
To discuss whether a move makes sense for your company, contact the Bridgewater, NJ headquarters at 201-310-2598 or reach out through the contact form.
Frequently Asked Questions
What is a relocation feasibility analysis?
It is a study that fully defines the risks and rewards of a move in support of a go or no-go decision. It covers human resource impacts, projected savings and penalties, real estate, and qualitative advantages such as air service, customer proximity, talent recruiting, and company branding.
How do companies decide whether to relocate their business?
They compare the economics, workforce impacts, and strategic benefits of a move against a business-as-usual case. Annual savings at a new location ideally support payback of the one-time relocation cost within three years of start-up, and projected employee attrition is evaluated alongside the financial results.
What does a corporate relocation feasibility study include?
A dialogue with management on rationale, affected business units, base case, scenarios, concerns, timing, responsibilities, and confidentiality, followed by a relocation impact analysis covering human resources, economics, real estate, and qualitative advantages.
How do you measure employee retention risk during a company relocation?
By projecting whether each employee will commute, relocate, or separate. WDGC’s Employee Action Model quantifies retention and separation by staff level, department, and critical personnel, and a commute impact analysis maps each employee’s door-to-door travel time and cost to the candidate site.
Does a feasibility analysis cover local moves as well as long-distance moves?
Yes. WDGC gauges HR impacts for both short-distance and long-distance moves. For local moves, commute impacts are analyzed under multiple location scenarios.
What costs are included in relocation economics?
One-time nonrecurring costs, including separation, employee relocation expenses, commutation assistance, transition management, and parallel staffing, plus recurring annual costs including payroll, occupancy, air travel, and corporate taxes, adjusted by expected economic incentive offsets.
How are results presented to decision-makers?
Headquarters relocation studies produce a 10-year cash flow table that can be used for board and committee approvals, project budgeting, and leverage during incentives negotiation, with savings or penalties measured against the business-as-usual case.
What happens if the decision is to move?
WDGC’s HR group move services are designed to minimize operational disruption, and the next step is determining where to locate.
