Why Managed Budgets is the Preferred Way to Manage Relocations Over Lump Sum Disbursements

Chances are, if you’re reading this, you’re in the process of:  

  • Determining how to structure (or restructure) your company’s relocation benefits, or
  • Reevaluating your current lump sum plan to see if it’s still your best option 

Either way, we’re happy to shed some light on this frequently-raised subject. Because, as a tech-based relocation provider, we see—and oversee—many examples of both types of plans. It’s a subject that’s near and dear to our hearts. 

For this same reason, we know firsthand what employers and employees want most from their relocation plans—and that’s even nearer and dearer to us. 

In a nutshell, employers want a relocation plan that’s a competitive, cost-effective recruiting/talent management tool. That gives employees a smooth, low-stress relocation experience. That’s easy to manage—no headaches or unpleasant surprises. 

In turn, employees using relocation plans want them to cover most—preferably all—of their moving expenses, while facilitating a smooth, low-stress move that’s also free of headaches or unpleasant surprises.  

Now, here’s the thing: when we compare managed budget plans with lump sum disbursements in light of these universal goals, the results are clear. By every standard, managed budgets plans outperform lump sum disbursements. Here’s how and why. 


Managed Budgets Plans Are More Competitive than Lump Sums 

For a candidate considering a job offer that involves relocation, a managed budget plan is the more appealing deal. 

For one thing, unlike lump sum disbursements, which are basically like signing bonuses, managed budget plans offer relocation services and support, including the help of a relocation consultant, to ensure a smooth move. 

For another, managed budget plans give employees more bang for their buck, via tools like vendor discounts that stretch their dollars further.  

In essence, offering a managed budget plan indicates that an employer is taking pains to ensure a positive relocation experience. And who doesn’t want to work for an employer that cares? 


Managed Budgets Are More Cost-effective than Lump Sum Plans  

One thing that lump sum plans have going for them is that they’re super easy to budget. Employers know exactly how much each relocation will cost. But that doesn’t make them cost-effective; in fact, quite the contrary. 

For starters, employees aren’t the only ones who reap the benefits of discounted vendor arrangements. Employers save big, too.  

In addition, while with lump sums, employees pocket any unspent dollars, under managed budget plans, those unspent funds stay with employers. They’re equally easy to budget, but way more cost effective.  

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Managed Budgets Deliver Preferable Relocation Experiences over Lump Sums

Another drawback of lump sum disbursements is that they offer no way for employers to smooth the employee’s relocation journey. Once those dollars hit an employee’s bank account, the employer’s out of the picture.

In contrast, because managed budget plans are…managed, they offer employees all types of tools and support—such as recommended vendors and the services of a relocation consultant—to keep those moves on track. They generally are offered by the employer’s relocation provider, which essentially acts as a safety net.

In other words, managed budget plans are engineered to prevent those dreaded headaches and last-minute disasters—and, if you’ve ever had to resolve one, you know it’s a big deal all around.


Managed Budget Plans Are Easier to Oversee than Lump Sum Plans

Sure, the beauty of lump sum plans is that there’s minimal administration for employers. Although some employers use relocation providers for this, others manage their programs directly. 

The problem is, they have little idea how their relocation programs are performing. They don’t know how employees are spending their dollars…what percentage, if any, remains unspent…and how the process is going. The only time they get updates is when there’s trouble, such as a panicked employee urgently requesting more funds. 

In contrast, managed budget plans generate detailed data, such as how dollars are spent, how long it takes to complete a move, etc. As a result of these insights, employers can not only budget more precisely, but continually improve their relocation program. And certainly, every employer wants that.   


Ready to Make a Move?

Maybe your company is interested in upgrading its lump sum plan to a managed budget plan or another type of relocation policy. Maybe it wants to explore its options. Either way, we’re happy to chat about it with you.  

Who are we? Well, we’re the leading tech-based relocation provider. Our claim to fame is reducing g employer program costs by up to 66%, while improving the relocation experience. If that sounds good to you, let’s start a conversation.

Human Resources Today