A recent SHRM survey on employee benefits found that lump sum payments are the single most popular relocation benefit offered by the surveyed companies. Lump sums are offered by 28% of responding companies, down slightly from 29% in 2017 and 32% in 2016. The survey does not differentiate between lump sums that are one part of a company’s relocation package and lump sums that represent the company’s entire relocation benefit.
The 2018 Employee Benefits Survey, administered by the Society for Human Resource Management (SHRM) in February and March 2018, assessed the prevalence of more than 300 benefits. Human resource professionals were asked whether their organizations formally offered each benefit or had plans to do so in the next 12 months. This report examines changes in the prevalence of benefits over the past five years.
Other relocation benefits most commonly offered in 2018 include temporary relocation benefits (16% of companies), location visit assistance (16%), reimbursement of shipping fees (12%), and cost-of-living differentials (11%). The relocation benefits showing the biggest decrease in usage were reimbursement of shipping fees (16% of companies in 2014, 12% in 2018); third-party guaranteed buyout plans (10% in 2014, 6% in 2018); home selling assistance (11% in 2014, 6% in 2018); reimbursement of closing costs (9% in 2014, 5% in 2018); reimbursement of realtor fees (9% in 2014, 5% in 2018); and reimbursement for financial loss sustained from a home sale (5% in 2014, 2% in 2018).
Companies commonly reassess relocation and other benefits periodically to ensure they are remaining competitive in the marketplace and offering benefits employees currently want and use. Some benefits related to home selling, such as loss on sale coverage, have likely become less necessary as the U.S. economy and housing market complete their recovery from the 2008 economic crisis. Other companies might replace these a la carte relocation benefits with a flat lump sum.
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With increased focus on talent acquisition and retention, along with the ever-present need to control costs and streamline administration, many companies are taking a closer look at their lump sum policy and its effectiveness. For companies that used lump sums as a one-size-fits-all approach, many are now finding that this might not be the best methodology.
To help you understand the complexities of a lump sum policy, download the white paper, “Lump Sum Policies Best Practices” to learn about the advantages and disadvantages of each type of lump sum policy; how each type of lump sum program works; and which type of policy is the best fit for your employee relocation program.
