How Do Lump Sum Relation Programs Benefit Businesses?
Worldwide ERC conducted a survey in 2013 on lump sum policies. The survey results provide important insight as to why businesses choose to offer lump sum payments for relocation expenses. According to the survey, 83 percent of organizations offer some form of lump payment assistance for employee relocations.
The primary reason for offering a lump sum was stated as concerns for employee flexibility. The second most commonly stated reason was cost control.
The record-keeping aspect of relocation packages should be considered. Traditional packages do offer some tax benefits for the business, but the complexity of record keeping involved for expenses at all levels is unwieldy and difficult to manage. Examples of these expenses could include:
- Temporary living
- Return trips while living in temporary quarters
- House hunting trip
- Final move
- Home sale and home purchase closing costs
- Lease breaking assistance
Lump sum relocation packages allow employees to prioritize needs and expenses according to the money available to them in the package. This makes it much easier for businesses to control the costs and greatly reduces the record-keeping and expense tracking burden on the employer.
Relocating employees is a large expense for many businesses. Any of these lump sum relocation packages will help businesses keep these expenses in check, while allowing transferees the opportunity to take more control over their relocations and related relocation expenses.