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.