by Jerry Funaro, CRP, GMS
Vice President, Global Marketing, TRC Global Mobility, Inc.
With so many impediments to relocation today, from traditional issues such as spouse/partner career concerns to real estate complications and unique family needs, companies, employers and relocation management companies are all seeking creative ways in which to move the process forward. Economic recovery is helping to overcome some of today’s obstacles. In the meantime, a core-flex approach (explained in part 1 of this blog ) can help control overall program costs, meet employees’ needs for flexibility, and enable companies to achieve their business objectives. In this installment I’ll go over some of the advantages of core-flex programs and – so you can anticipate and minimize their impact – some of the potential disadvantages.
Advantages of core-flex programs
A carefully considered core-flex program can help companies to:
- Tailor relocation benefits more closely to employee or candidate needs
- Empower hiring managers, business units, regional locations, etc.
- Gain a recruiting edge
- Make employees feel more valued and invested in the process
- Control costs, offering only those benefits that are meaningful to the employee
- Eliminate or dramatically reduce exceptions
Flexibility is key
For most companies using a core-flex approach, flexibility is the most compelling advantage. As employees’ real estate and family needs become more complex, corporate relocation managers administering a traditional tiered program can find themselves inundated with exception requests.
The core-flex approach allows a more direct and personalized alignment of benefits and needs. In some cases, it allows relocations and international assignments that otherwise might be stalled to proceed. Moreover, incorporating a flex element is faster and more efficient than a bureaucratic exception process. A core relocation benefit can also help ensure that there is parity and predictability among relocating employees and that all employees receive the basic benefits needed to get the transfer done.
The potential for cost savings
Cost containment can be another powerful motivation to use a core-flex program. In a typical relocation program, companies actually might be providing some “one-size-fits-all” benefits that employees neither want nor use. In a core-flex program, benefits are better aligned with actual needs, and in many cases, companies impose a cap on the total benefit amount.
According to the Worldwide ERC® survey, Relocation Assistance: Transferred Employees, 45 percent of surveyed companies using a menu approach place a ceiling on the value of the selections made. This figure has increased from 39 percent in 2004.
For companies more focused on cost containment, the core-flex menu items would be tied more directly to the core move processes, with more limited menu options. An example is a self-move package for a domestic new hire, or an “assignment-lite” package of travel, household goods transportation, immigration and tax services for a global assignee.
Disadvantages of core-flex programs
Core-flex programs have some potential pitfalls:
- Program/policy administration is more complex than for strictly defined, tiered policies
- Budgeting can be more challenging due to variable policy elements
- Continuing management involvement is crucial to ensure that the package includes all of the elements essential to a successful relocation/assignment
- Employees communicate with each other, and there is always the possibility that an employee will feel entitled to a benefit another employee has received
Parting thoughts on managing a core-flex program
Core-flex programs undoubtedly require more administrative attention and care than more rigidly defined tiered programs. An overarching goal is always to ensure that the program remains as fair as possible. Menu options must be carefully considered relative to employee needs, and should be revisited regularly to ensure that they are still relevant. The costs of these provisions must be estimated with some care as well, to ensure that menu items are interchangeable from a budget standpoint.
Particularly where managers negotiate specific provisions with employees, it is critical that they are well-versed on the program rationale, options and costs. They should be armed with modular communications pieces, such as one-page descriptions of available services, which allow them to present only the applicable benefits to the employee.
Since 1987, TRC has delivered creative, cost-effective relocation and international assignment services across the United States and in more than 150 other countries around the world. TRC partners with its clients to develop competitive, best-practice relocation programs, drawing from a comprehensive range of relocation services, including U.S. home selling, home finding and consulting services and complete international relocation services. TRC’s client base represents a wide variety of products and services and ranges from startup firms to Global 1000 companies.