What should your company know about managing lump sum relocations?
Lump sums can help you reduce costs and the overall administrative burden in your program. Senior VP of Client Services Jennifer Lutgen has the details in this Relo Tip Tuesday.
Complete transcript: “Hi, I’m Jennifer Lutgen, senior vice president of client services here at Plus. Today, we’re going to talk about what your company should know about managing a successful lump sum program.
First off, what is a lump sum? In the relocation industry, a lump sum refers to a move where a company provides a single, unreceipted payment that is intended to cover or contribute to the relocating employee’s expenses. It is then left up to the employee to manage their budget, as well as their overall move.
Many companies prefer a lump sum as a way to control costs, as well as reduce the overall administrative burden. Sometimes, a lump sum is the only benefit an employee receives. In other cases, the company might offer a lump sum-plus program, where additional benefits are offered on top of that lump sum payment. This allows the employee the control and flexibility to manage the majority of their move, but still ensures that some benefits are covered by the company. Often, tax-excludable benefits such as the household goods shipment.
For these reasons, a lump sum is appealing to many organizations. However, it is important to consider whether a lump sum truly meets your talent management and organizational goals. In some cases, perhaps an entry-level professional, a lump sum might fully support and meet the employee’s expectations. In other instances, there may an expectation for a more fully supported move, or that talent could be lost. Additionally, lump sums make it difficult to truly measure the success of your program, as there’s limited opportunity for analytics.
Should you decide that a lump sum is the right program for all or a portion of your mobility population, it is important to consider what additional tools and resources are offered to those employees. Online portals can offer great resources such as budget tools, as well as access to vetted service providers.
We hope you find this helpful as you manage your lump sum program. Thank you for watching.”