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Lump Sum Policy Best Practices: Pros & Cons of Supplemental Lump Sums

| January 14, 2018

supplemental lump sumsAs the name suggests, companies offer supplemental lump sums to cover part of an employee’s relocation costs, not all of them. About one-third of TRC’s clients utilize the supplemental lump sum to cover benefits such as the home finding trip, temporary living and the final move. Companies usually tailor supplemental lump sums to each employee’s move, often by pricing accommodations through preferred providers and including pre-determined amounts for mileage and meals.

According to the Atlas World Group 2017 Corporate Relocation Survey, 50% of companies are using a supplemental lump sum to cover temporary accommodation costs, up from 38% – 43% in years 2011 through 2014. In its 2017 Workforce Mobility Benchmark Report, Runzheimer noted that nearly 50% of the organizations they surveyed manage home finding expenses via a supplemental lump sum. Read More

Lump Sum Policy Best Practices: Pros & Cons of a Core/Flex Program

| December 27, 2017

lump sum policyWhen discussing lump sum policy, the core/flex policy is an attempt to provide greater flexibility and a better employee relocation experience for the employee while allowing the employer to meet global mobility objectives and contain costs. A perennial complaint of transferring employees is that relocation policies include benefits the employee neither wants nor needs, but do not include alternative benefits that better meet the employees’ needs.

These benefits go unused, which saves the employer money but can leave the employees feeling like their needs have gone unmet. Occasionally, relocating employees ask to trade undesired benefits for ones that are more relevant (e.g. an extension of temporary housing instead of spouse counseling). Most employers view these request as exceptions to policy and deny them.

With a core/flex program, companies often choose to retain a tiered methodology, with tiers typically differentiated by job grade or homeowner/renter status. There is also a trend to have a dedicated “executive” tier for higher-level employees. Within each policy tier, there are specifically defined (core) benefits. Companies determine which core benefits to include by analyzing historical benefits usage data. The core benefits do not have a monetary cap or limit, but employees must use them exactly as defined in the policy. Read More

Managed Lump Sum Program: Pros and Cons to Consider

| December 22, 2017

managed lump sumA managed lump sum policy is similar to a traditional fixed lump sum except the company specifically defines the benefits covered by the lump sum in its policy guidelines. These benefits are sometimes presented as menu items, allowing the employee to choose benefits that best suit his or her needs. Other companies calculate the lump sum based on the benefits they intend to provide. Either way, the company typically provides relocation counseling (either in house or through a third-party provider) to help the employee use the funds most effectively. Unlike the traditional fixed, any unused funds revert back to the company. The company calculates the managed lump sum amount using the same methods as the traditional fixed, sometimes with the assistance of a third-party data provider.

Pros of a Managed Lump Sum Program

This model allows companies to track benefit usage and spend much more reliably than the traditional fixed. This closer control will also help the company to manage costs better with a vetted network of relocation service partners to ensure optimum pricing and quality. From a tax perspective, the employer can make direct vendor payments, allowing it to treat each of the components individually as taxable or non-taxable.  Read More

Lump Sum Policy Best Practices: Pros & Cons of a Traditional Fixed Lump Sum Program

| December 15, 2017

Hands exchanging a fixed lump sumA traditional fixed lump sum policy approach provides the relocating employee with a flat amount of money that he or she can use to pay relocation expenses. Under this program, the employee is usually responsible for coordinating the move details and allocating the available funds. Companies can use several criteria to determine the amount of the lump sum, including: 1) Job or grade level of the employee; 2) Homeowner versus renter status; 3) New hire versus current employee; 4) Historical averages for similar types of moves; 5) Distance of the relocation and family size; and 6) Discretion of the employee’s manager.

Companies can also engage a third-party data provider to determine the amount of the lump sum. The provider will consider current costs, distance, family size and any other parameters set by the employer in calculating a lump sum amount.

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A Letter from Worldwide ERC®Asking for Your Support

| November 21, 2017

Worldwide ERC sent the following request to its members on November 15, 2017 asking for support in preserving the moving expense deduction. 

Dear Worldwide ERC® Members,

Your industry needs your help. Please write your members of Congress today in support of preserving the moving expense deduction.  As previously reported by Worldwide ERC®, the current Senate and House versions of the “Tax Cuts and Jobs Act” would eliminate numerous tax deductions and exclusions including the moving expense deduction.  It is critical that your members of Congress hear from you, requesting that they help restore this tool vital to workforce mobility.

Writing your members of Congress will only take a few minutes.  Here are specific directions on how to send a letter.

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Proposed 2017 Tax Reform and the Substantial Effects it Could Have on Talent Mobility

| November 17, 2017

tax reformOn November 2, 2017, the U.S. House of Representatives Ways and Means Committee released new tax reform legislation entitled the “Tax Cuts and Jobs Act.”  Although currently in review and not yet passed into law, there are portions of the proposed tax law that would bring about a significant shock to the global mobility industry.  Because of the impact that this bill as it stands would have on our industry, it is imperative to understand what the current proposals entail and what the consequences would be as we move forward into 2018.

Elimination of the Household Goods Moving Expense and Final Move Non-Meal Expense Deduction

The household goods move for the employee is currently seen as excludable or non-taxable.  Under the proposed bill, all of these costs will become taxable in 2018 and corporations will need to determine if they are willing to cover the cost of the taxes (or gross-up) on behalf of their transferring employees.   As the household goods move is typically one of the most expensive relocation benefits offered (second only to the sale of the home), the financial ramifications for both the employer and the employee are considerable.  For example, if a household goods shipment costs $20,000.00 and the estimated gross-up to cover the taxes on the shipment would be $13,000.00, the employer would face an additional $13,000.00 in relocation fees, and the employee would see $33,000.00 of additional taxable income in their W-2—just for the household goods shipment alone. Read More

Words of Wisdom from the Pennsylvania Conference for Women

| October 26, 2017

Professional women Employee MobilityBy Melissa Seitz Medford, Consulting Service Manager, TRC Global Mobility

Recently I had the privilege to attend the 14th annual Pennsylvania Conference for Women in Philadelphia. The Conference is self-defined as, “A non-profit, non-partisan, one-day professional and personal development event for women that features dozens of renowned speakers sharing inspirational stories and leading seminars on the issues that matter most to women.” The approximately 12,000 attendees were mostly women, but I was encouraged to see quite a few men as well. As it turned out, the messages at the conference resonated with everyone, regardless of gender. I think they are particularly germane for our employee mobility industry and its female majority.
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Maintaining Employee Productivity During a Corporate Relocation

| October 17, 2017

Relocation tax best practices

The loss of workplace productivity during an employee’s corporate relocation, although difficult to measure, is both real and significant, especially given the growth in global mobility.  The relocation process by definition creates substantial distraction and dissonance, reducing the employee’s focus and engagement, and ultimately, productivity.  There are, however, several things that can be done from the company’s perspective that can assist in lessening the reduction of productivity problem when working with employee relocation. Read More

The Importance of Involving the Spouse/Partner and Family in Employee Relocation Discussions

| September 21, 2017

Discussing employee relocationToo often, a company identifies an ideal candidate for a role that will require employee relocation and then communicates only with the candidate about the potential relocation. Ironically, the accompanying spouse/partner and family often endure the brunt of the move. Read More

Andrew Powers, CRP, and Stacy Barnette Join TRC Global Mobility

| September 12, 2017

– Supporting TRC’s Continued Growth-

MILWAUKEE, Wis. (September 12, 2017)

TRC Global Mobility, Inc. (TRC) is pleased to announce that Andrew Powers, CRP, has joined the company as Vice President, Global Business Development and Stacy Barnette has joined TRC as Manager, Client Relations.

Andrew Powers joins TRC Global MobilityAndrew Powers has more than a decade of business development experience as well as extensive relocation operations experience. With his diverse experience and commitment to clients and prospective clients, he is a skilled problem-solver who develops cost-effective mobility solutions. He will represent TRC in the metro New York City region.

Andrew is actively involved with Worldwide ERC© and regional relocation groups. He holds Worldwide ERC’s Certified Relocation Professional (CRP) designation. Andrew is available at apowers@trcgm.com or 203-910-0142.

Stacy Barnette joins TRC Global MobilityAs Manager, Client Relations, Stacy Barnette will be responsible for the day-to-day management of TRC’s Account Management team. Stacy has nearly 15 years of employee mobility experience, serving most recently as Senior Client Service Manager for a relocation management company. In addition to her client service experience, Stacy has extensive experience in client finance and reporting, gained at several major relocation management companies. Stacy is available at sbarnette@trcgm.com.

About TRC Global Mobility

TRC Global Mobility employees aren’t just knowledgeable talent mobility professionals: they own the company! They understand that your satisfaction and success is their success. So they have every reason to go the extra mile in developing creative solutions for clients and delivering outstanding service to relocating employees. TRC brings clients 30 years of experience, a flat, transparent organization and an independent structure that supports fresh ideas and customized solutions. As an independent company, TRC is free from corporate bureaucracy and preconceived notions. TRC’s talent mobility services enable you to have the most capable people in the locations where they can support your success, in over 150 countries worldwide. Visit TRC at www.trcglobalmobility.com

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Media Contact
Jerry Funaro, SCRP, SGMS-T
Vice President, Global Marketing
jfunaro@trcgm.com
203-644-2704

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