The pros and cons of lump sum relocation policies can be debated ad infinitum. The benefits, however, are undisputed: the efficiencies of implementation and cost control.
A viable adaptation is a flexible allowance approach that can provide a great balance between flexibility for the employee and managing costs for your business.
It pays to implement a consistent policy.
Here are five steps to managing the lump sum approach:
1. Arrive at a number
Probably the toughest step is the first – deciding a budget range or amount to be applied for relocation(s). Then you need to derive threshold amounts that are dependent on tenure, grade and seniority, family circumstances and so forth. An additional consideration should be the length of assignment, for instance the shorter the assignment, the heavier the financial burden that will fall on your organisation to cover the relative upheaval.
2. Categorise costs
Split the types of costs associated with any move, and again allocate a cost range that provides a realistic allowance for each. Logistics such as flights and shipments should be an absolute given amount, while a discretionary amount should be allocated to other relocation services, such as orientation and settlement, assistance for school searches and other lifestyle related essentials.
3. Source a viable panel of services
Going this extra mile can make life so much easier for the employee, and can result in longer term cost savings for the organisation. Finding two or three solid contenders for each type of service will minimise overwhelm. Not only does this help with cost control, but it can also offer peace of mind in service delivery to keep suppliers accountable to the needs of your business.
4. Issue guidelines/policy
Establishing a modus operandi is key to ensuring consistency and making the boundaries clear to all parties. Consider how the employee will claim expenses or if they will be paid directly, how underspend of an allowance will be handled, how special needs will be catered for, if at all, and so on. Transparency of any mobility policy to ensure equality and consistency makes life easier all around.
As with all policies, it is important to invite feedback and review from the employee to ensure it’s serving their needs, and from an organisational perspective when measuring the ROI of the initiative. Also consider qualitative feedback – are cultural and lifestyle needs being met by the policy offered? Is there any more (or any less) that can be done to achieve an optimal outcome?
Feedback and review is an important component when implementing any policy. Balancing a workable and cost-efficient policy for the organisation against the acknowledgement of the upheaval that a relocation can bring for the employee and their family is crucial.