Mike Deane, from All Points Relocation in Canada, asks us to reconsider lump sum relocations. He also challenges us to get reacquainted with their purpose and the options that are available. While some may think a lump sum offering is a simple fix to a complex situation, the reality is that there may be better solutions to consider that meet a company's intent and its employees' needs.
Mike explains, "In Canada, most employers actually run capped cost relocation programs, reimbursing employees based on submission of receipts and supporting documentation, rather than simply issuing a lump sum through payroll, taxed at source."
He walks through 3 types of lump sum relocation programs:
1.) Variable Lump Sum Relocation Program where set amounts are established usually based on salary/level of the employee.
2.) Contextual Variable Lump Sum Relocation Program where some additional things are taken into account when establishing the amount - things like renter versus home buyer, family size and distance.
3.) Managed Lump Sum Relocation Program where amounts are often calculated on option 1 or 2 above, but where additional support is provided by a third-party relocation management company.
While some of the nuances around taxability for relocation expenses are different in Canada than the U.S. or other countries, we do see very similar "types" of lump sum policies around the world.
Recognizing that most lump sum policies arise from a desire to cap cost and provide freedom or flexibility for the employee, Plus has developed a technology solution, called Elo Assist, just for these types of moves. Elo Assist comes at a lower cost than a fully managed relocation or lump sum, while still offering high-quality suppliers. This provides employees with the tools they need to more effectively manage the moving process.
Mike also makes a case for a "Core Flex" approach where core benefits are covered so that basic "core" benefits like en route travel and household good shipments don't penalize someone moving greater distances. Elo Assist can help there, too, by having specific benefits directly billed outside of the lump sum payment. Makes you wonder if "high tech" can truly be "high touch?"
The decision is yours! Whatever you decide for your lump sum program or Core-Flex program the decision is yours. All Points just recommends that you shake off the handcuffs of lump sum legacy decisions, where the original scenario or intent is no longer known or relevant. And look at your lump sum options in order to optimize value and cost containment for both the company and your employees. You invest in your people, a talent strategy plan, and recruitment to bring in the best talent to your company because you know that people make the difference! When you find key talent to move your company forward, you want to pull in that talent by offering competitive compensation and benefits and that includes relocation.