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A variety of options can help you meet unique needs

Your employees are all unique individuals, at different stages in their careers, with their own sets of priorities. Do you have the right blend of relocation policy support to meet your business needs while also aligning with their personal and career goals? How do you arrive at a mobility programme that helps you anticipate and control your costs, while delivering a customised, personal employee experience?

Answering those questions starts with a good understanding of exactly what relocation policy types are commonly used, the pros and cons of different models, and how they align with:

    • Your overall business objectives
    • Your talent mobility programme’s strategic goals and how they contribute to those objectives
    • Your company culture and budget
    • Your employee population and geographic footprint

Do you currently have multiple types of both domestic and cross-border assignments? Are you sending employees to new locations on extended business travel or short-term relocations, for longer periods of time (3 years or more), or transferring them permanently? Are your current relocation policies meeting employee and business needs with high satisfaction scores, or are you fielding multiple requests for exceptions?

The key to success is to strike the right balance between a consistent and standard set of relocation support the company always provides, with a range of other services that can be tailored to individual needs.

Sound daunting? Don’t worry, we can help. Read on, or schedule a call with one of our experts.

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Understand the Different Relocation Policy Types

Which options are right for you?

Many companies have what are considered traditional policies to support employee relocation. These approaches may offer the same types and levels of services to support the move to all employees, including tax-protected home sale programmes, where applicable, or they may be varied by employee population, considering such factors as job level or tier, whether they are home owners or renters, or current or newly hired employees.

To help round out and enhance their options, however, many companies are increasingly turning to more flexible relocation policy types to better address the evolving needs of the business and their employee population.

Particularly as demographics shift, talent pools expand with the increasing number of employees having greater flexibility around where to live and work, and employees expect more choice, mobility policies must be adaptable.

Increasingly sophisticated technology solutions – and the data and insights behind them - have made that customisation easier to achieve.

Interestingly, many organisations that may have attempted to streamline or simplify their policies several years ago are now seeking to expand their options. Research in a Mobility Outlook 2021 survey from AIRINC reported that companies used an average low of 4.4 different relocation policies in 2018, compared to a record high of 6.6 different policies on average in 2021.

Choice is key, but a growing number of varying approaches to flexible relocation policies can lead to confusion, so let’s break down the principal approaches, approximate costs and features of each type.

The Cash Lump Sum Policy

A single, direct payment

Compare the lump sum to other flexible policy types

A cash lump sum approach to mobility policy is exactly as it sounds – the employer offers the relocating employee a single, pre-determined amount of money at the start of the process to fully or help cover the costs of the move. With a lump sum model, employees are typically provided with the funds up-front.

The lump sum relocation policy is frequently used for recent graduates, entry-level transferees, or new hires. It can be a fixed amount, not varying by employee, or tiered, based on such considerations as job level, geographic location, family size or home ownership status.

Advantages to the lump sum model include relatively low costs and ease of administration. For some employees, having total control over their move is preferable. Risks, however, are that they may not make the best choices, or work with the most qualified partners. Insufficient relocation support can slow the process down, resulting in a negative employee experience, delaying their ability to start in the new location and possibly resulting in the use of additional time and financial resources, as mobility teams may be called on to step in for further guidance and to solve problems.

Employees using the lump sum model don’t have to go it entirely alone. Our lump sum management technology helps mitigate risks and makes it easy for employees to schedule virtual surveys, communicate with key parties and compare quotes. At the same time, the business has the benefit of a simple-to-use tool that gives you insights into what your employees want and need most, and a simplified way to authorise accounts and securely distribute funds.

Read more about Lump Sum
woman-using-bank-card-at-laptop-lump-sum
woman-using-bank-card-at-laptop-lump-sum

The Cash Lump Sum Policy

A single, direct payment

Compare the lump sum to other flexible policy types

A cash lump sum approach to mobility policy is exactly as it sounds – the employer offers the relocating employee a single, pre-determined amount of money at the start of the process to fully or help cover the costs of the move. With a lump sum model, employees are typically provided with the funds up-front.

The lump sum relocation policy is frequently used for recent graduates, entry-level transferees, or new hires. It can be a fixed amount, not varying by employee, or tiered, based on such considerations as job level, geographic location, family size or home ownership status.

Advantages to the lump sum model include relatively low costs and ease of administration. For some employees, having total control over their move is preferable. Risks, however, are that they may not make the best choices, or work with the most qualified partners. Insufficient relocation support can slow the process down, resulting in a negative employee experience, delaying their ability to start in the new location and possibly resulting in the use of additional time and financial resources, as mobility teams may be called on to step in for further guidance and to solve problems.

Employees using the lump sum model don’t have to go it entirely alone. Our lump sum management technology helps mitigate risks and makes it easy for employees to schedule virtual surveys, communicate with key parties and compare quotes. At the same time, the business has the benefit of a simple-to-use tool that gives you insights into what your employees want and need most, and a simplified way to authorise accounts and securely distribute funds.

Read more about Lump Sum
Read more about Lump Sum
couple-revieiwing-laptop-together-managed-cap-choices

The Managed-Cap Policy

Maximum benefits are pre-defined

Compare the managed-cap choice to other flexible models

In a managed-cap programme, the employer sets a maximum amount for relocation benefits. It can be structured in a variety of ways – either as an overall limit or capped amounts set individually for each type of service support offered, such as house-hunting trips or temporary living.

Organisations will typically offer a currency-based or points-based programme, offering employees a pre-determined quantity to apply to various services that best meet their needs. They can be consistent amounts, or determined by a variety of parameters, such as job tier or salary percentage, location, or family size.

A possible disadvantage to the managed cap model is less employee control or independent choice over the services and partners to work with. On the plus side, managed-cap programmes have the potential for greater tax efficiencies than the lump-sum model, depending on the jurisdiction, and a higher level of care that comes with working with pre-determined, trusted, and experienced service partners.

Read more about Managed Cap
Read more about Managed Cap

The Core/Flex Model

A blend of standard and optional relocation support services

See how the core/flex option compares

A core/flex relocation policy blends pre-defined support services or benefits with a range of additional, optional services that employees or business line leaders can choose from to adjust as needed.

Services that typically fall in the “core” levels of support are generally centered around housing, shipment of personal belongings and all relevant compliance-related tax and legal services, including immigration. Examples of “flex” relocation services might include language training, school search, spouse or partner career training or other support, or specialty transportation services, such as additional autos, pets, or a fine art collection.

Just as with the managed-cap approach, the service options and access levels may be determined by a variety of parameters, including employee demographics like family size and location, or job category.

A core/flex approach is often the most expensive of the flexible relocation policy options and can be complex to initially set up and implement. Once running and fully integrated, however, many organisations find higher employee satisfaction levels, fewer exception requests and good insights that help manage their costs – which ultimately proves cost-effective and delivers high levels of ROI.

Read more about Core/Flex
winch-and-ropes-to-adjust-sails
winch-and-ropes-to-adjust-sails

The Core/Flex Model

A blend of standard and optional relocation support services

See how the core/flex option compares

A core/flex relocation policy blends pre-defined support services or benefits with a range of additional, optional services that employees or business line leaders can choose from to adjust as needed.

Services that typically fall in the “core” levels of support are generally centered around housing, shipment of personal belongings and all relevant compliance-related tax and legal services, including immigration. Examples of “flex” relocation services might include language training, school search, spouse or partner career training or other support, or specialty transportation services, such as additional autos, pets, or a fine art collection.

Just as with the managed-cap approach, the service options and access levels may be determined by a variety of parameters, including employee demographics like family size and location, or job category.

A core/flex approach is often the most expensive of the flexible relocation policy options and can be complex to initially set up and implement. Once running and fully integrated, however, many organisations find higher employee satisfaction levels, fewer exception requests and good insights that help manage their costs – which ultimately proves cost-effective and delivers high levels of ROI.

Read more about Core/Flex
Read more about Core/Flex
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Hybrid Relocation
Policy Solutions

A blend of best worlds

Compare the hybrid approach to other flexible models

As companies increasingly look to provide the greatest level of customised relocation support while managing their costs, varieties of the lump-sum, managed-cap and core/flex approaches may work best. You may choose to incorporate a partial lump-sum payment, for example, for some services, with core or fixed components for others.

Advanced technology makes this increasingly more achievable – and trackable – with the benefits of giving both employers and employees more visibility into their options and costs.

It really comes down to company culture and meeting the end goals: the best choices will meet the need for personalised, positive employee experiences while supporting the business and talent strategy goals.

How can we help you find the best relocation policy support that will result in happy, productive employees?

Schedule a call with us
Schedule a call with us

Flexible Relocation Policy Types at a Glance

Policy Type† Definition Average Cost to Company Administer Pros Cons
Cash Lump Sum Cash in a pre-determined amount is paid directly to the employee to manage their own move $ - $$
  • Simple to administer
  • Low cost
  • High employee value proposition for those who prefer to handle most of the move themselves or who can retain any unused funds
  • Duty of care issues
  • Potential for hidden costs in both time and money if things don’t go well
  • Risk that employee doesn’t receive all the support they require due to budgetary constraints
  • Risk of perceived inequity
Managed Cap Employee has a cash or points budget to spend on relocation services through trusted providers $$ - $$$
  • Simple to administer
  • Relatively low cost
  • Addresses duty of care issues
  • Employee choice provides relatively high value proposition
  • Can leverage cutting-edge technology and the power of the crowd
  • Potential for ‘buyer’s remorse’ if employee-selected services don’t meet expectations
  • Risk that employee doesn’t receive all the support they require due to budgetary constraints
  • Risk of perceived inequity
Core/Flex Closer to a traditional assignment / relocation policy with options to provide greater or lesser support. $$ - $$$$
  • Provides the business with greater control over spend and customization for the individual
  • Provides opportunity for greater employee value proposition
  • Greater administrative complexity
  • Risk that employee doesn’t receive all the support they require due to budgetary constraints
  • Risk of perceived inequity
Hybrid Brings together multiple flexible elements to form a bespoke solution $$$ - $$$$$
  • Tailored to meet the culture and strategy of the business
  • Potential for greater administrative complexity
  • Pioneers have no benchmark

 

†Assumption that compliance services are provided as standard for each policy type

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