When is a Lump Sum Program Not Right for Your Mobility Program?

When companies choose to move away from a Managed Support Program to a self-service Lump Sum Program, they are typically making a number of assumptions. They are assuming their employees have the financial savvy to be efficient purchasers of relocation services, and they have the expertise necessary to source, coordinate, book, and manage those needs and services as well. The reality is that moving in today’s ever-changing environment can be challenging, and there are circumstances beyond the employee’s control that reinforce the need for a Managed Support Program now more than ever before.

There are a number of reasons why a Lump Sum Program may not be right for your organization including, but not limited to:

• International cross-border moves due to their complexity
• Employees moving with families with school-aged children, special requirements, etc.
• Challenging locations due to safety concerns, complex housing markets, not knowing the host language, etc.
• Moves to locations where temporary housing is limited
• Mid- to senior-level employees
• Not being able to provide a highly supportive experience

Listed below are some of the high-level advantages and disadvantages, from the perspective of both your company and your relocating employees, of administering a lump sum policy. Please read our full paper to learn more. 

	Advantages of Lump Sum Policy	Disadvantages of Lump Sum Policy
Company Perspective:	Fixed costs Streamlined administration Improved budgeting Reduced exceptions	Reduced productivity Impact on the employee experience Not supportive of sustainability and DEI initiatives Perception of being unsupportive or non-competitive Potential to overpay employees Difficulty establishing payment amount Possible tax disadvantages Misalignment with duty of care philosophies Inability to leverage travel costs savings Loss of data
Employee Perspective:	Perceived flexibility Ease of administration Financial incentive if funds are left over	Employee perception of benefits Lack of support Potential for employees to select lower quality suppliers Cash flow challenges

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For more information on whether or not a lump sum program is right for you and your relocating employees, and how we can help you make an informed decision, please contact Sirva Global Advisory Services at globaladvisoryservices@sirva.com or reach out to your Sirva representative.