This summer has been extremely busy for many of us looking for talent, or working on HR projects with deadlines and haven’t really had the time to evaluate processes with minimal exposure, but that can have maximum consequence. Employee relocation is one of these areas, especially if you provide employee with money as a lump sum only benefit to relocate. Recently, Mitch Ulrich with NEI Global presented a relocation corporate survey on lump sums at the North Texas Relocation Professionals meeting. The survey shows companies typically provide this benefit to employees because it is easy to manage, provides flexibility, and has minimal exceptions. One interesting takeaway was the dollar amount provided to employee by companies in different categories. The numbers below represent highest percentage responses:
- Entry Level $2,500-$5,000
- Managers: $10,000-$15,000
- Executives: $25,000 or more
However, there can be many pitfalls when providing a lump sum benefit for the employee relocation which include:
- Lump sum benefits for relocation is taxable income (unless direct billed to company) which means gross up costs and counsel employee on net amount for his/her relocation.
- Employees (or spouse in many cases) must invest hours to get bids, and are not trained in discerning best value when comparing service and pricing. This can include customer service, transit time, pricing, and claims management.
- Service levels are often lower when moving as a “private transferee” instead of corporate employee.
- The average household goods move is approx $12,900 according to WorldwideERC. This may present a challenge to families moving more items, and longer distance.
Here are 3 things you can do to elevate the experience for both you and your employees when using a lump sum program:
- Be Proactive: Invest time is learning more about a “Partial” or “Core/Flex” Lump Sum programs. This includes vetting companies before relocation begins for the employee, and setting up a contract for direct billing the household goods. The household goods move cost then becomes non-taxable income for employee and will save you gross up costs.
- Involve stakeholders: Make sure you include hiring managers when planning budgets to help them understand costs and level of service expectations for employees. It’s very challenging trying to balance budgets while keeping employees relocating happy.
- Be Open-Minded: There are relocation management companies, and household goods partners that can help you support this program and manage costs effectively. The value is seeing options available to make it a better relocation experience and having a partnership.
Call to action: If you provide lump sum relocation benefits to your employees, reach out to your relocation partner and discuss ways to elevate the program. There may be some additional value you are missing without increasing costs. Your employees will appreciate it and so will you! Check out more information on the relocation speakers and program information at www.northtexasrelocationprofessionals.org.
This has been a “Relocation Minute” update on “Easy is not always Best ” with Bruce Waller, For more information, call 972-389-5673, or email email@example.com or check out our my social media Facebook and twitter page.