MOVE Guides Global Mobility & Relocation Blog

Insights from MOVE Guides’ subject matter experts and business leaders from around the world

Aligning Global Payroll and Global Mobility

By Brynne Kennedy | Feb 10, 2017

This piece was originally featured in Global Payroll Magazine.

Imagine this: James moves from London to New York for a three-year assignment. He will receive a relocation package and a series of assignment allowances to compensate for cost of living and housing. His home business line agrees to continue to pay and fund his salary and bonus costs, but the host business line in the United States will fund the assignment allowances. James will be paying income taxes in the United States at the federal, state, and local levels but will maintain his social security and pension in London.

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LUMP SUM POLICIES DEFINED

By Brynne Herbert | Sep 03, 2014

Lump sum and managed budget policies are an increasingly popular policy at companies of all sizes and in all industries. Many companies are currently evaluating how to transition from complicated legacy policies to lump sum policies for all or part of their mobile employees. See below for options on structuring a lump sum policy and when you should consider one. For additional information on lump sum policies, check out our new resource section on lump sum policies.

What is a lump sum policy?

A lump sum policy involves paying a set amount of money to an employee to cover the costs associated with their relocation. This can be paid as cash to the employee (cash lump sum) or provided as a budgeted allowance (managed budget).

Cash Lump Sum: The company pays cash directly to the employee, and the employee can spend it as they wish. The payment may be grossed up (the company bears the tax liability associated with payment) or not grossed up (the employee bears the tax liability associated with the payment). The cash is meant to cover the costs of the employee’s relocation, but they can spend it as they wish. The employee does not submit any receipts back to the company.

Managed Budget: The company gives the employee a budget to spend on their relocation costs. The company generally defines the specific services that the employee can use their budget on – most often travel, household goods shipping, temporary accommodation and destination services. The relocation partner pays vendors for the employee’s services and then bills the company for pass-through costs with a single invoice and receipt backups.

How are lump sum policies used?

New Hires: More than 60% of new hires receive a lump sum to plan their move to a new job. This varies from a few thousand dollars for a graduate hire to a five-digit sum for an experienced, lateral hire. Lump sum funds and support ensure new hires transition successfully and onboard efficiently.

Young Professionals: Many young professionals receive a lump sum or managed budget policy when relocating. This gives them desired flexibility to use their budget as they wish.

Experienced Employees: Experienced employees are often moved with a lump sum or managed budget policy, which includes an in-kind benefit. This is typically temporary accommodation to ensure that the employee has a place to stay upon arrival. This structure is also common for young and experienced employees moving to more challenging locations.

Executives: Most executives are moved with a core set of relocation benefits and a lump sum allowance in addition to the core benefits. This provides the maximum simplicity and flexibility for executives and their families. This is also a common structure for relocations to contentious locations.

Why are lump sum policies used?

Lump sum policies offer lower costs, scalable management and better flexibility for employees.

Cost Pressure: Companies and business units consistently face cost pressures for relocation. They also increasingly want employees and employers to share responsibility for planning moves. Lump sum policies provide a single finance line item to P&L owners, and can save businesses up to 50% on relocation costs - millions of dollars for 50+ moves.

Volume Increases: An increasingly global world means that businesses are moving more and more people. This volume of growth requires scalable policies and lower costs per move. Lump sum policies allow mobility programs to move and manage growing numbers of people without linear growth in costs and resources.

Employee Flexibility: One of the most consistent pieces of employee feedback across companies is that employees want more flexibility for their relocations. Companies however need to retain important structure and consistency to deliver compliant and successful global mobility programs. Lump sum and managed budget policies provide unique structured flexibility to your talent mobility program.

 

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WANT TO OFFER NEW HIRES AND TRANSFERS A GREAT POST OFFER EXPERIENCE?

By Brynne Herbert | Aug 27, 2014

Link recruitment and onboarding to offer a great post offer experience for new hires and transfers!

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TOP TEN US CITIES FOR RELOCATION

By Claire Beckenstein | May 28, 2014

Forbes magazine recently posted an interesting article by Kathryn Dill, highlighting the top ten US cities for relocation as well as professional migration trends based on industry.

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NEW FEATURE: RENTAL LISTING FILTERS

By Steve Black | May 21, 2014

We are very excited to announce a new feature for your employees —rental filtering by price, location and size.

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5 REASONS YOU NEED RELOCATION SUPPORT

By Brynne Herbert | Jan 15, 2014

Are you leaving your employees out in the cold? Do you know the hidden costs to your business of leaving your employees to fend for themselves during a relocation?

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HIGH QUALITY CONTENT: WHY IT'S IMPORTANT TO ENGAGE INDEPENDENT INFORMATION SEEKERS

By Brynne Herbert | Sep 16, 2013

Learn why providing your employees with a great source of information saves more time than if they search for answers independently.


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DEAR TECH COMPANY: YOU SHOULD HAVE BETTER CORPORATE RELOCATION TECHNOLOGY

By Brynne Herbert | Sep 05, 2013

Of all the companies in the world, tech companies should offer the most cutting edge employee relocation technology. Learn how MOVE Guides can help you support your employees with new technology.

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JUST MOVING A FEW? WHY MOVE GUIDES' FLEXIBLE SUPPORT IS RIGHT FOR YOU

By Brynne Herbert | Aug 29, 2013

Do you just move a few people each year? Learn how MOVE Guides' customized and flexible products can support even the smallest relocation volumes.

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MBA GRADUATES: WHAT KIND OF RELOCATION SUPPORT DO THEY EXPECT?

By Brynne Herbert | Aug 14, 2013

It's graduation season for MBA programmes around the world. Learn what kind of support MBA graduates expect and receive from their new employers.

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