As the COVID-19 pandemic wears on, employers are problem-solving case-by-case relocations in real-time, while reevaluating their mobility programs in total. COVID-19 generated shutdowns, border closings and financial issues have not only created immediate challenges, but given global mobility experts fresh perspective into their programs.
UrbanBound recently hosted a virtual roundtable of global mobility thought leaders across the country. We invited them to pose questions to each other and us, volunteer answers, and share insights and concerns.
The event was facilitated by our Co-Founder, Jeff Ellman, and attended by our Global Supply Chain Manager, Eric Vaughn, who has taken the lead on UrbanBound’s COVID-19 response.
We’re grateful to everyone who participated, including leaders from Nike, AxoGen, EPAM Systems, Jabil, Kohls, Kronos, Liberty Mutual, Limited Brands, Peloton, PTC, Qiagen, Rock Central Detroit, Rockwell Automation, Spotify, St Jude, Stryker, Viasat and Juul.
For all who attended, thank you for contributing to a lively, fascinating discussion! As promised, we’ve recapped our key takeaways below.
A number of employers noted that these exceptional times demand more flexibility from their relocation programs. While few have formally revised their relocation policies—so far—they are making far more case-by-case exceptions.
Such as…delaying start dates. Giving employees the option of driving instead of flying. Asking new hires to work remotely in their origin countries for the time being (after a careful review of compliance, tax and even salary adjustment issues).
Looking ahead, some employers believe they will modify their relocation policies to allow employees more flexibility in how they use their benefits—a shift we’ve been seeing at UrbanBound for some time.
Even prior to COVID-19, clients have been moving almost in masse toward managed budget policies, which combine the flexibility of lump sum policies (a hot topic, see below) with the resources and support offered by full coverage policies.
Our roundtable participants had an intensely mixed response to lump sum policies—which is consistent with every roundtable we’ve held to date.
Lump sum policies give employees the freedom to spend their relocation funds any way they choose, but often leave employees unsupported in planning their move. If any funds are left over, the employee keeps them. Here’s a sampling of opinions aired during our roundtable:
Lump sum policies aren’t cost-effective for employers, since employees benefit keep all leftover funds. (New TV, anyone?).
Lump sum policies motivate employees to move more affordably and find permanent housing more quickly, because they want those remaining funds.
Because employees can use their lump sum how they choose, these policies cut down on the need for exceptions.
Lump sum policies seem to work better for entry level employees, but provide a poor experience for executives.
Lump sum policies are “never quite enough” and “always unpredictable.” Managed budget policies are preferable, because they are also flexible, but employers keep the unused funds.
That last bullet is consistent with UrbanBound’s findings. After years of research, we’ve concluded that lump sum policies results in overspending—while raising the likelihood of a poor employee experience. While lump sum policies don’t generate savings for employers, 94% of moves come in under budget under differently-structured policies—another reason managed budget plans are gaining market share.
While roundtable participants acknowledged a potential need to cut their relocation programs’ costs, their first priority is ensuring a positive employee experience. Some solutions employers are considering include modifying relocation benefits to be more flexible and reducing the number of relocations an employer will sponsor during a given period.
Some participants discussed working more closely with talent acquisition partners to identify the potential relocation costs associated with two equally-qualified candidates, before a job offer is made, reserving relocation funds for truly exceptional candidates.
Several participants noted they wouldn’t be making dramatic changes until it’s clear what the world’s “new normal” will look after the immediate crisis period.
As the country starts to reopen, there appears to be a shift in the mindset of some employees whose domestic relocations had been put on hold.
Several roundtable participants noted that, in the last two weeks, employees who were relieved to postpone their relocations back in March are now eager to get going. Employers are evaluating these requests on a case-by-case basis, rather than flip the switch. And they are taking elaborate steps to ensure employees move safely.