THE BENEFITS OF LUMP SUM POLICY FOR EMPLOYEE RELOCATION

     

MOVE Guides’ corporate relocation platform helps companies relocate employees using a lump sum relocation policy. We’ve met with a lot of companies using lump sums over the last few months -- ranging from those offering only lump sums for employee relocation to those gradually migrating to a new lump sum policy -- and thought we’d share some of the benefits we’ve discovered.

 

  • Cost Containment – Lump sum relocation policy allows global mobility departments to establish a set cost for relocation services and keep within those guidelines. Generally, any overruns are paid directly by the employee, so mobility departments can exactly calculate their spend. Expenses are generally paid directly by the employee (beyond the guise of HR), so employees are responsible for managing spend, not global mobility departments.
  • Reduced Admin – Using a lump sum policy for employee relocation reduces the administration burden to global mobility departments. Global mobility (and payroll) only process a payment(s) and then hand off cost allocation and budgeting to the employee. Since employees are generally treated as local hires or expat-light in this policy, employees are responsible for allocating their additional cash to pay for housing, schooling or other items – reducing the ongoing administration for by global mobility departments.
  • Responsibility – Lump sum relocation policy places responsibility for budgeting and cost control on employees. In an era of global talent and mobile employees seeking career development opportunities and international experience, this helps align the interests of the employee with those of the organization. Employees must take ownership over their own decisions and budgets.
  • Autonomy – Employees like to make their own decisions. And they like choice. Many of them have grown up with self-service business models, internet transparency and the consumerisation of technology at work. This has made them empowered and resourceful. Lump sum policy allows them to make their own decisions about their relocation using the internet and other resources.

Many of the organizations we speak to are reviewing policies and looking for new ways to move increasing numbers of staff with increasingly tight budgets. Lump sum policies are becoming increasingly popular for both US domestic and international relocation --- in fact, many employees choose to take lump sums for their relocation, over alternatives. In era where an increasing share of employees are well-travelled and familiar with planning their own services on the internet, lump sums now make much more sense than they once did. MOVE Guides offers a unique platform for relocation services to help companies support employees moving with lump sum payments --- and is working with the companies leading the way!
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About The Author

Brynne Herbert

CEO and Founder