It is common practice for companies to periodically examine their mobility offerings against benchmarking data, emerging trends, and individual business needs. When growing mobility programs are ready for the development step, a popular goal for mobility managers is to change from an existing, unsupported lump-sum-only policy approach (typically put in place for a low volume of relocation activity) and evolve to more structured options in response to climbing relocation volume.
Lump sums are found in most mobility programs in several forms (e.g., cash payments, grossed-up or not, of $5,000, $10,000, $25,000, etc.), and often for specific populations. With lump-sum-only programs, the sole benefit employees receive is a cash payment to spend as they see fit. A mobility program offering managed services (i.e., paying for direct services and reimbursing specific expenses) provides a higher level of service and can play a role in attracting critical talent.
There is no one-size-fits-all mobility program. The possibilities of what can be offered to relocating employees are endless (various benefit offerings, policy tiers, thresholds of offerings, etc.). The exponential possibilities of what can be included in a mobility program may seem overwhelming, especially when trying to determine what to offer in a managed vs. lump-sum-only service approach. Couple that with the age-old question of what other companies are doing and it may be difficult to know where to start.
Here are some basic considerations that Aires discusses with companies going through this process.
- Cost: We recommend knowing the cost tolerance of the organization before examining the implication of costs. Even if this is not an exact figure, having a general awareness of the organization’s appetite for costs will be helpful. Typically, moving from a lump-sum-only program to managed services with tiered policies means an increase in costs. More support doesn’t always mean a cost increase, but wanting to move from a $10,000 lump sum to managed services will likely require a larger mobility budget.
- Administration: This includes everything from the structure of managed service policy tiers to any customization of benefits, and the to the day-to-day decision making that may be involved in offering those benefits. There are different policy structures, so knowing the options on how policies can be structured helps in the policy expansion process.
- Talent Needs: This is one of the most overlooked aspects of building mobility policies. Often the view is from the organization’s perspective (“What are we willing to spend?”), but those who build successful programs to attract talent instead ask, “What do our employees need and want?” Open discussions, exception requests, and surveys of potential transferees are all things that can provide insight to help build a mobility program that is checking the boxes of your talent.
- Culture: The culture of an organization plays a role in determining aspects of benefits, such as how many different tiers to have (number of individual relocation packages) and where to draw the line between types or levels of employees that are eligible for certain benefits. Aligning a mobility program with an organization’s culture requires input from stakeholders.
- Competitiveness: Attracting and retaining talent is a competitive business. Many organizations use their mobility programs to reinforce that competitiveness. It is good to know what other companies are offering to their employees, but no program should be a copy of another’s. Organizations that are unsure what peer organizations are offering can rely on research, data, benchmarking, and best practices to gain an understanding of what others are doing. Most important are the voices from within. Taking into consideration the company’s cost, administrative tolerances, and the needs of employees often leads to the best solutions.
What Benefits to Include when Building Out your Program
It's important not to let program changes become overwhelming. As mentioned earlier, there are countless ways that a mobility program can be structured, but there are some clear similarities in successful ones. When looking to move from a lump-sum-only program to a more robust offering, there are some key services and expenses that you may consider. Many of these offerings have been considered mainstream best practice benefits. Some of the most common include:
- Household Goods Shipment: Including one or two vehicles, and possibly storage in transit
- Temporary Housing: Often 30 or 60 days in furnished accommodations
- Final Travel, Airfare, or Mileage: Paid in accordance with travel policy (by the most direct route)
- Miscellaneous Allowance: A cash payment (similar to a lump sum), but since employees are receiving other services/expenses, this covers incidental expenses and is often a lower amount
- Gross-Up: Most programs tax protect the employee
Additional considerations vary by employee and company needs, but often include a home finding trip, early lease cancellation, home sale and purchase, and spouse/partner assistance. Even more possibilities come into play, and all those considerations mentioned in this post will generally be the guide for their presence in an expanding mobility program.
Aires Consulting Services supports companies by sharing industry expertise and experience to build creative solutions to support a wide variety of mobility programs. Please contact your Aires representative if you’d like to discuss your program with our experts.