Selecting Core Flex Program Benefits and Administering
The core relocation benefit ensures there is some level of parity and predictability among relocating employees and that all employees receive the basic benefits needed to get the transfer done. For domestic relocations, such a core flex program benefit might include: relocation counseling, home marketing assistance, rental or home finding assistance, final trip to the destination, and shipment of household goods.
Additional flexible elements that could be matched to the employee’s requirements could include:
- BVO or GBO home sale program
- Home purchase assistance
- Temporary living
- Storage of household goods at the destination
- Spouse/partner career transition assistance
- Mortgage assistance
- Child/elder care assistance
- Miscellaneous allowance
Traditional international relocation assignments usually include a more complete benefits package by necessity. Core components typically include:
- Visa/immigration services
- Travel to the destination
- Shipment of household goods/storage
- Tax equalization
- Lease services
- Miscellaneous allowance
Flexible options for global assignments might include:
- Look-see trip
- Cross-cultural training
- Language training
- Temporary living
- Spouse/partner career services
- Additional allowances (hardship, housing)
- School search assistance
- Home leave
- Property management
The specific menu options included should reflect the company’s culture and objectives, and historical benefits usage. For example, companies that are employing a core-flex approach to meet employee needs might include not only home sale and home purchase assistance, but also a selection of services to meet the needs of spouses, partners, children and elderly family members.
Selecting the Flex Benefits
Typically, the business unit or division selects the available core flex program benefits. That selection is based on not only employee needs but also the competitive environment: which benefits does the company need to offer to attract or retain the best candidate for the position?
In many cases, the manager negotiates the specific flex benefits with the employee or new hire, within the limits of the overall budget (determined by historical usage and cost). The manager/employee collaboration involves the employee in the decision-making process, demonstrates that the company is concerned about his or her unique needs and facilitates employee buy-in to the resulting package.
Depending upon the size of the program and the types of flexible benefits offered, an example of a monetary cap for a renter tier might be $15,000 and for a homeowner tier, $30,000. Executive tiers typically have a larger allowance for flexible benefits, and sometimes a few core benefits not included in the other tiers. For example, the company might set a monetary cap of $35,000 on flexible benefits for an executive tier, with the addition of a core loss on sale benefit not included in other tiers.
Administering Core Flex Program Benefits
Core-flex programs undoubtedly require more administrative attention and care than more rigidly defined tiered programs and certainly more than lump sums. An overarching goal is always to ensure that the program remains as fair and equitable (and therefore, defensible) as possible.
Employers must carefully consider menu options relative to employee needs and revisit them regularly to ensure they are still relevant. They must estimate the cost of these provisions with some care as well, to ensure that menu items are, in fact, interchangeable from a budget standpoint. (For companies working with a relocation management company (RMC), the RMC can help you to develop and maintain a competitive core-flex program.)
Particularly where managers negotiate specific provisions with employees, it is critical that they be very conversant with the program rationale, options and costs. They should have modular communications pieces, such as one-page descriptions of available services, which allow them to present only the applicable benefits to the employee.
Moving Forward with a Flexible Approach
With so many impediments to employee relocation today, from traditional issues such as spouse career concerns to real estate issues and unique family needs, companies, employees and relocation management companies are all seeking creative ways in which to move the process forward.
A core-flex approach can help meet employees’ needs for flexibility, making relocation more attractive. It can help companies managing corporate relocation programs to attract and retain talent, control overall program costs, and most importantly, achieve their business objectives in an ever-changing competitive environment.
