In today’s economy, companies are doing whatever they can to attract and retain top talent. One way they are achieving this is by offering lump-sum mobility benefits. A lump-sum approach will not be ideal for some companies and employees but can provide good benefits when appropriately leveraged.
With a lump sum, the company provides a cash payment to the relocating employee that is intended to cover all or a portion of relocation services. This contrasts with a miscellaneous relocation allowance, which is given to the employee to cover incidental relocation costs that are not covered elsewhere in the policy.
Lump-sum payments can be an attractive option for companies looking to minimize administrative needs and more predictable anticipated relocation costs.
However, it can be tricky to understand how to best use a lump sum benefit. In effect, you are turning your employee into a moving buyer.
Some companies offer self-service lump sum payments, where the employee is responsible for coordinating their own move and securing all necessary services. Others provide limited support or a managed lump sum, which may include guidance from a relocation counselor on how to best use the funds. Additionally, some companies designate certain core relocation benefits (such as a home-finding trip or temporary housing) to be covered by the lump sum.
Finally, flex benefits are additional services that may fall outside of a company’s typical core benefits. These can be used to provide for additional needs like family support or a return trip back to the employee’s origin. As with other lump-sum options, the Relocation Provider usually provides guidance on how to best use these funds.
Bobbi Maniglia, VP of Corporate Sales and Mobility Services for northAmerican® Van Lines, covers everything you need to know about lump sum benefits in this comprehensive guide.
