With just a sum of money and no other guidance, your employees have no benchmark or timeline for how their relocation should be moving along. This leads to overwhelmed HR and Mobility departments, stressed out transferees, and a lot of money lost on both ends of the spectrum. Learn how to fix this problem by providing lump sum in a more guided way. [Dive even deeper into this topic with our eBook: http://resources.urbanbound.com/decode-the-language-of-lump-sum-ebook]

2. Lump sum has been gaining a lot of
Tractionin the relocation space

3. FLEXIBLE ALLOWANCE PLAN
CAPPED ALLOWANCE PLAN
Lump SUM WITH RMS
CORE/FLEX

4. FLEXIBLE ALLOWANCE PLAN
CAPPED ALLOWANCE PLAN
Lump SUM WITH RMS
CORE/FLEX
There are clearly
of options to
choose from

5. Out of the $75 billion dollars spent in
the U.S. on corporate relocation…
70% of companies
use a lump sum
distribution policy…

9. It’s becoming a much more
g u i d e d
relocation option

13. Lump sum amounts didn’t always accurately account for needs:
Car shipment
Pet assistance
School-finding trips
Language training
Spousal support

14. Lump sum amounts didn’t always accurately account for needs:
Car shipment
Pet assistance
School-finding trips
Language training
Spousal support
Employers had
into what
their employees
needed

15. Where one person might only only
$7,000 for their relocation…
…another might need
$15,000.

16. And there was
no light being
shed on the
reasons why.

19. Story time.

20. Let us tell you about
Relocating Rachel.

21. Rachel was being
relocated from
St. Louis to San Francisco.

22. Her company gave her
$15,000 and said:
“See you in a month!”

23. Here’s the thing about
Rachel. She was strapped
with student debt, so
cash was tight.

24. She decided to take
that $15,000 and get
to San Francisco the
cheapest way possible,
and then pocket the
leftover money.

25. Bad move, Rachel.

26. Rachel forewent a
homefinding trip, found
the cheapest moving
company possible, didn’t
ship her car, and
chose not to pay for
any storage.

27. Turns out the moving
company showed up late
and moved really slowly and
inefficiently. They even
broke a few of her items.

28. Then she got in her car,
drove through the night,
got to her new
apartment, and found
out it wasn’t quite what
she was expecting.

29. It was really small and off
the beaten path. She
couldn’t fit all of her
things in her space,
either. But she didn’t
have any storage.

30. Rachel wasn’t happy.
She had to go to her
first day work the next
morning, and she hadn’t
unpacked a single box.

31. Now, Rachel is stressed,
unhappy, and uncertain if
she made the right
decision by moving across
the country.

32. All our Relocating Rachel
needed was…

34. It’s situations like this
where lump sum’s lack of structure
can really
your transferees

35. When a transferee plans poorly for a
relocation…
…they often have to dip
into their own funds. This
isn’t always feasible,
especially since:

36. 2/3 of graduates walk
away from college with an
average of $26,600 in debt

37. Don’t let this happen to your transferees.
We’ll show you how with 4 types of
guided lump sum options.

39. FLEXIBLE
ALLOWANCE PLAN

40. what it is:
Employers separate the relocation into different categories
and assign a maximum amount of spending per category.
For example, if a company decides the expenses they are
willing to provide reimbursement for include: shipping
household goods, short-term housing, traveling expenses,
and 2 homefinding trips, they will assign an amount that the
employee can spend per category, and the employee can
go from there. If they don’t spend all of the allocated money
in one specific area, they can transfer the remainder to a
different area and spend it there.

41. Let’s take a look
at an example:

42. FLEXIBLE Allowance Plan
Household Goods -----------$8,000
Short-term Housing-----------$900
Traveling Expenses------------$500
2 Homefinding Trips-----------$2,000
(Actualspending)
Household Goods -----------$10,000
Short-term Housing-----------$700
Traveling Expenses------------$100
2 Homefinding Trips-----------$2,400

43. FLEXIBLE Allowance Plan
Household Goods -----------$8,000
Short-term Housing-----------$900
Traveling Expenses------------$500
2 Homefinding Trips-----------$2,000
(Actualspending)
Household Goods -----------$10,000
Short-term Housing-----------$700
Traveling Expenses------------$100
2 Homefinding Trips-----------$2,400
Employees can
around as needed

44. It provides the transferee with some
kind of structure…
…without limiting them
too much in terms of
how much money can
be spent per category.

46. Remember tax implications, too.
Some areas of a relocation are tax
deductible, so if a transferee takes
money away from one of those areas,
and instead puts it towards a
taxable area, you might end up
spending more than you
bargained for.

47. FLEXIBLE Allowance Plan
Household Goods -----------$8,000
Short-term Housing-----------$500
Traveling Expenses------------$500
2 Homefinding Trips-----------$2,000
(Actualspending)
Household Goods -----------$6,000
Short-term Housing-----------$500
Traveling Expenses------------$100
2 Homefinding Trips-----------$4,000
exempt from
taxes
not exempt
from taxes
this combination
is actually more
expensive

48. Be open to hearing this plan called
of different things, too.

50. CAPPED
ALLOWANCE PLAN

51. what it is:
Unlike flexible allowance plans, employees cannot
transfer funds from one area to another. The employer
will often have a policy stating what kinds of things the
employee can use the lump sum for, similar to a flexible
allowance plan, and if provided, they can use the
support of a relocation management software or a
relocation consultant to guide them through the process.

52. One downfall of this plan is that a lot of people don’t know
where they are going to need to spend money and how
much of it, so they might reach one cap much quicker than
anticipated and one much slower, and this can be stressful.

53. Additionally, transferees have to
be with keeping and
tracking their receipts for
reimbursement

54. This plan is a little more cost effective when
comparing it to a flexible allowance plan. You
don’t run into the same sort of issues, specifically
related to unforeseen tax expenses.

55. The main differences?

57. Watch out for the
possible troublesome
areas though:

58. If the employee doesn’t spend all
of what they are given,
leading to unnecessary spending just to
reach the amount given

59. Let’s check out an
example of what this
policy might look like.

60. CAPPED Allowance Plan
Household Goods -----------$10,000
Homefinding Trip-------------$300
Car Shipment-----------------$1,000
Short-term Housing----------$500
(Actualspending)
Household Goods -----------$10,000
Homefinding Trip-------------$300
Car Shipment-----------------$1,000
Short-term Housing----------$500

61. CAPPED Allowance Plan
Household Goods -----------$10,000
Homefinding Trip-------------$300
Car Shipment-----------------$1,000
Short-term Housing----------$500
(Actualspending)
Household Goods -----------$10,000
Homefinding Trip-------------$300
Car Shipment-----------------$1,000
Short-term Housing----------$500
Funds stay and
actual spending is the
same as what is allotted

62. If you choose to reimburse
transferees (instead of
giving them the money up
front) remember to try
and be as quick as possible
with turn around time.

65. LUMP SUM
WITH RMS

66. A good RMS (relocation
management software) can change
lump sum from a dangerous trend…
into an
overwhelmingly
positive one.

67. what it is:
An RMS is an important tool for a few reasons. For one, it
provides transferees with an overview of the costs they’ll run
into, along with a timeline on when they should be expecting
them—ensuring employees don’t end up overspending in
one area too soon. It also educates users on tax implications
by outlining all potential tax breaks and explaining terms that
might new (such as the 50 mile rule, in-transit storage , etc).
By housing guides and important documents in an RMS for
transferees, it makes this information accessible at all times
and allows transferees to take things at their own pace.

69. don’t forget
the power
of pairing
RMS with
human contact

70. Relocation specialists deal with lump
sum policies on a daily basis,
so they know how to
,
saving you a lot of money.

72. CORE/FLEX

74. When you ask an employee:
“What are your top 3
concerns for this
relocation?”

75. 1.) Finding a house
2.) Shipping my stuff
They almost always rank their top concerns as:

76. Enter: core/flex

77. what it is:
With a core/flex approach, employers offer a “core” set of
benefits which is covered in full (usually household goods
and housing assistance) through direct billing, along with a
list of “flex” benefits to use based on needs and seniority (the
higher your level, the most flex benefit options you’ll receive).
Employers then offer a smaller lump sum which functions
similarly to the flexible allowance plan discussed earlier.
Transferees get to basically craft their own relocation policy.
Having multiple policies for your different transferees is much
more realistic and less time consuming with this approach.

78. It takes time to get the process up and running,
but once you have a system in place…
the benefits will far
exceed the initial
time spent.

79. What it looks like:

80. Core/flex
Household Goods: Covered in Full
• Moving Company X
• Moving Company Y
Short-term Housing: Covered in Full
• Housing provider X
• Housing Provider Y
Choose 3 additional benefits:
• Homefinding trip - up to $300
• 30 days of storage - up to $500
• Spousal assistance – up to $800
• Language training – up to $2,000
• Pet assistance – up to $600
• Lifestyle transition assistance – up to $1,500
• Car shipment – up to $2,500

81. Core/flex
Household Goods: Covered in Full
• Moving Company X
• Moving Company Y
Short-term Housing: Covered in Full
• Housing provider X
• Housing Provider Y
Choose 3 additional benefits:
• Homefinding trip - up to $300
• 30 days of storage - up to $500
• Spousal assistance – up to $800
• Language training – up to $2,000
• Pet assistance – up to $600
• Lifestyle transition assistance – up to $1,500
• Car shipment – up to $2,500
This is the
plan of the four.

82. Where lump sum was once a check and a “good luck!”, it’s moving
more towards a structured plan that encourages transactions to be
handled between employer and supplier, instead of the employee. This
takes a lot of stress off of your employee’s plate and allows them to
focus on their new career and settling into their new city.

83. Core/flex will
continue to gain
traction, just
like we’ve seen
with lump sum.

84. Core/flex will
continue to gain
traction, just
like we’ve seen
with lump sum.
So stay tuned.

86. There are a lot of different routes you
can take when choosing a lump sum
policy that’s right for your employees.

87. As long as you dive in and
really understand the
drawbacks and benefits
of each lump sum plan…

88. …you’ll have no problem choosing the
right one for your company!

89. Want to learn more?