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Managed Budget Plans: The Good, The Better and The Potential Savings
Under a managed budget (or managed cap) plan, the employer still sets a limit on relocation expenses, as well as what services they’ll cover.
However, employees don’t receive those funds up front. As expenses are incurred, the plan either a) pays vendors directly or b) reimburses the employee once funds are spent. Typically, this is handled by relocation management companies, which provide other services as well.
Here’s how it works, and why it works so well:
- Employees still have the flexibility to customize their moves, but there’s more structure around the process, which means they’re less likely to run into logistical issues. That’s where the term “managed” comes in.
- Because the programs are administered by relocation providers, employers still have minimal involvement—but, at the same time, employees get more support. This includes assistance from live relocation specialists, who’ll answer their questions and guide them through the complexities of their particular moves.
- Often, relocation companies refer employees to a proprietary network of pre-screened vendors, which greatly simplifies things. Not only must these vendors maintain good track records to stay in the network, some relocation companies negotiate volume discounts with them—so employers’ funds go further.
Best of all, if employees don’t spend 100% of their allotted funds, the excess stays with the employer—so the potential for savings is there, especially when employers choose affordable tech-based relocation providers. Like UrbanBound!
In addition, because the relocation company tracks all the expenditures—and tech-based companies do this better than traditional ones—employers have complete transparency into how their money is spent, allowing for accurate budgeting and continual program improvements.
Finally, employee satisfaction with managed cap plans tends to run high. Employees can personalize their moving experience, while still getting help and support as needed.
So, that’s why managed cap plans are “better” than cash disbursements—they’re low-maintenance and cost-effective, but still result in positive relocation experiences for both employers and employees. And that’s exactly what employers want most.
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