We are constantly gathering research on flexible approaches on mobility to help companies understand how these provisions should be used, to link more effectively with the overall company and talent goals.
And of course, to not forget the importance of employee experience.
So where is this trend of flexible approaches coming from and why are mobility managers interested now, more than ever, in Lump Sum programs?
Well for years, companies have had a sort of “one size fits all” approach to relocation. But now the demographics of the mobile workforce are evolving faster right now than at any other point in time. Companies today are acknowledging that the multiple generations in their workforce are in different stages of their careers, and each demographic has unique and distinct needs.
This is where flexible programs come into play.
In our webinar, Core/Flex or Lump Sum, we polled 150 mobility professionals to ask which of the following flex programs our attendees were using:
In the epic battle for flexibility dominance within mobility programs, we evaluate the top contenders Lump Sum vs. Core Flex and the pros and cons of each.
Lump Sum Pros:
Lump Sum Cons:
In our webinar, when asked which employee types receive a Lump Sum in lieu of direct benefits, about three-quarter of our attendees indicated that they don’t provide Lump Sums to any of their mobile employees. Again, this is not a surprise to what we see.
Companies that are looking at lump sums for their flexibility but are concerned as to how the funds are used may appreciate the core-flex approach. With a consistent set of core benefits, mobility owners are assured the employee is getting the assistance they need and that the employee is engaged with the freedom to select flexible benefits from a pre-determined list of benefits as part of the company’s program.
What are mobility professionals asking about the battle of mobility flexibility?
What are the benefits typically covered under a Lump Sum?
The common ones are miscellaneous allowance, household goods and temporary living. In my review of programs, companies are more likely to provide a Lump Sum in lieu of certain benefits with international packages. The data seems to support this. Settling in services and spousal assistance are also benefits provided as a Lump Sum.
For Lump Sums, does it make sense to provide compliance related benefits directly, such as immigration and tax assistance, then cover non-compliance related benefits with a Lump Sum?
Sometimes it’s the intent of benefit, nature of the assignment, and culture of the company that determines whether a Lump Sum for a specific benefit is the right approach. Recently, I was discussing home leave trips with a client. I recommended a fully reimbursed benefit to ensure the benefit is used most effectively: the employee is going to the home location, reconnecting with family and colleagues, to ensure a successful repatriation. The client had a different perspective, they felt that they employee experience is enhanced by allowing them the flexibility to apply the funds toward either a trip home or to a separate location for R&R.
Ultimately, the decision of lump sum vs. core/flex is one that must be made to reflect the unique characteristics, objectives, and corporate culture of each individual organization.