How the Lump Sum Approach Works for Relocating Employees
Employees move. Whether it’s a new hire just starting their career with your company or a veteran changing locations, it’s bound to happen. When it does, you should be ready. Employers that help their employees with relocating are rewarded by offering this benefit: it’s a recruiting tool and an opportunity to show the company is invested in an employee. But the offer only works when it’s the right fit for the company and the employee. So, what’s the best relocation option for your company?
Identifying the Best Approach
Gone are the days of employers paying for services directly, or employees sending in receipts for reimbursement. Now a days, companies use lump sum allowances. These allow organizations to control costs while reducing the administrative burden of processing folders full of reports for any one employee.
What goes into a lump sum program?
Every lump sum program hinges on identifying what relocation costs are covered, an amount employees receive up-front and then allowing employees the freedom to use the funds at their discretion. The right report will break down the figures of home finding, temporary living and final move into an easily implemented policy.
The first part of relocating? Finding a place to relocate to. Most companies pay for travel to the new city, a place to stay and meals when there. Mitigating factors include distance between destination and current location, duration of the visit and accommodation options available.
The second part comes when the employee has moved to their destination and begun working, but haven’t quite moved into their permanent residence. Companies often pay for lodging, and sometimes transportation and meals. A majority of employers, 66%, offer policies for a 30 to 60-day range.
The final part comes when the employee moves their belongings and family to their final destination. Companies will generally cover meals, travel and lodging for this last piece of the relocation. It’s also typical to allow between 1 and 3 days for them to make their final move.
Diving into Lump Sum Relocation Data
Every employer and every employee has different needs. The most important part of figuring out the best relocation plan? Accurate data. If you find yourself in that position, take a look at our report, The Lump Sum Approach to Relocation Costs. Read the report to learn more about what steps other companies are taking to ensure their employees are relocated with the proper financial support.