U.S. Bank provides solutions for improving employee satisfaction while balancing company costs.
Lump sum programs are popular in today’s mobility landscape due to the appeal to organizations looking for cost savings and ease of administration, and to transferees who are seeking to make their own decisions on how they spend their relocation funds.
However, without access to support resources and experienced relocation guidance, transferees are losing productivity that can be critical to the success of their move. This, in turn, can have a negative impact on your organization in the form of hidden costs and a negative customer experience.
We'll look at three main areas of focus for lump sum programs:
And, we'll offer best practice recommendations from both your peer organizations and transferring employees.
Employee productivity lost
One finding shared by corporate mobility professionals was that employee satisfaction with their relocation is higher for lump sum policies that include defined benefits versus lump sum-only moves. Corporate professionals who’ve conducted internal surveys with transferees shared two important findings about lump sum programs:
Many transferring employees still see lump sum-only policies as a better option because they believe that they can manage their own choices better, and organizations see it as a way to reduce costs. The reality is that lump sum payments, without company support, can lead to a reduced employee experience, lost productivity, and increased out-of-pocket expenses.
Supporting employees: Duty of care
The concept of duty of care, often applied to international moves which may have complex security, compliance, and tax implications, is loosely defined as your company’s responsibility to protect its employees and ensure their health, safety and well-being. Duty of care applies well to lump sum programs since a lack of support can cause productivity drains and out-of-pocket expenses, leading to a poor employee experience and low satisfaction with the company. From our experience, providing lump sums for selected services is recommended, rather than a lump sum for everything. Most commonly, we recommend providing a lump sum for services such as:
Costs for more complex services, such as home sale, mortgage and household goods shipments, should be handled outside of lump sum payments as they are more likely to lead to employee dissatisfaction. Tax assistance should also be handled outside of lump sum funds.
Balancing cost control and employee choice
This brings us to our third topic of striking a balance between controlling costs (hidden costs, loss of productivity, out-of-pocket expenses), supporting employees (duty of care for complex services), and providing employees with the flexibility and choice that they require. Transferees enjoy customization, choice, and flexibility in their personal life and want those same types of self-serve options in their business life. Companies need to find ways to offer transferees the opportunity to manage their own choices while still providing a level of support that provides duty of care and improves the employee experience.
Some examples of ways to provide employee choice include:
What’s next for lump sums?
In all likelihood, lump sums will not only continue to be a popular choice, particularly with early career employees, but will increase post-COVID as many companies have suffered financially and are looking for areas to cut costs. Also, with the possibility of more remote work opportunities, a lump sum offer gets the employee to where they want to be in a more economical way. It is important that companies balance cost control with employee support to ensure that their transferees’ experiences are positive.
Read more about how homebuying and mobility trends impact employees and connect with corporate relocation experts and home lending specialists.