Strategic Lump Sums and 4 Ways to Enhance Employee Experience

    Nov 12, 2020 @ 03:51 PM / by Adam Silver

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    Addressing a variety of goals with Lump Sums

    In AIRINC’s 2020 Mobility Outlook Survey, 60% of companies said they offered some form of lump sum as part of their mobility program. Lump Sums are so popular because they can address a variety of goals in one neat, simple package. For example:

    1. Employee satisfaction – they allow employees to flex funds to the services that they need and away from those that they don’t

    2. Diversity and Inclusion – related to #1, allowing employees to flex funds can help diverse populations better address their unique needs

    3. Cost certainty – lump sums act as a cap on costs, which makes for easier, clearer budgeting

    4. Administrative simplicity – lump sums generally require far less time to administer than providing in-kind benefits


    Popularity from Versatility: Lump Sums have a number of uses

    As a cash fund for the employee to use as needed

    Paying in cash allows the employee maximum flexibility since they can use the funds however they wish. Additionally, since employees can keep unused funds, a cash lump sum can serve as a modest incentive. Paying cash is administratively simple for the company, but may be giving up tax advantages in some jurisdictions.


    As a managed reimbursement cap

    Using a lump sum as a cap allows the company to provide some guidance in how the funds can be spent (since the employee must still submit for reimbursement) while still allowing the employee the flexibility to choose to distribute funds to services that they feel they need. Additionally, unlike in a cash approach, a managed reimbursement model allows the company to keep any unused funds. That said, a managed cap is most effective when you have a strong technology platform to manage its administration.


    As a way to estimate costs accurately

    Whereas in-kind benefits may vary in cost from move to move, lump sums provide cost certainty which can be especially important when trying to calculate the costs for bids for client work or for group moves.


    AIRINC Lump Sum Report

    Sample above from AIRINC's Lump Sum Calculator tool


    Strategic Use of Lump Sums

    Lump sums can be an important tool in your mobility toolbelt. Companies are especially focused on using them for less strategic moves. This gives them improved cost certainty and administrative simplicity for the majority of their moves, while still allowing them to focus on providing high-touch service for strategic moves with the highest value to the company.

    AIRINC has been helping clients worldwide calculate lump sums for house hunts, relocations, home leaves, and R&R trips for years. Our lump sums for international or domestic moves are backed by our best-in-the-business data collection process and client engagement teams.

    If you’d like to learn more about AIRINC’s lump sums visit our Lump Sum Calculator page, contact your client engagement team, or fill out our Contact Us form today.

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    Adam Silver

    Written by Adam Silver

    Adam Silver joined AIRINC in 2006 and currently serves as the Director for Client Engagement, North Central US. Adam has worked in Client Engagement at AIRINC for 14 years, partnering with AIRINC’s clientele across most industries to help provide data, consulting and support to help them reach their mobility goals. Adam received his BA from Wesleyan University and was an expatriate teaching English in Osaka, Japan from 2005-2006.