One of the great things about today’s relocation management landscape is that employers have so many choices. Choices in administration—in-house or outsourced. Choices in administrators—traditional or software-based. And, of course, choices in plan design—including lump sum and core/flex, two of the most popular options out there.
Today, we’re going to discuss these two plan types and why they make sense for employers (or not). But in order to do that meaningfully, we need to establish what relocation benefits are supposed to achieve in the first place.
For employees, a great relocation plan will:
…which all add up to a positive relocation experience.
For employers, a great relocation plan will accomplish all of the above—and also be:
…which all add up to a valuable recruiting/retention tool.
Now, let’s see how lump sum and core/flex measure up!
Lump sum benefits are a snap to explain, which is one reason employers like them. The employer gives the employee a fixed amount of funds to spend on relocation, with no rules on how to spend them.
But that means no support or guidance, either. Employees are on their own. What does this mean in terms of achieving our major objectives?
For employees, lump sum plans:
For employers, lump sum plans:
So, with lump sum plans, some employees have a positive relocation experience, but others don’t. And while they’re easy for employers to administer, they aren’t particularly cost-effective or easy to oversee.