Y or N Lump sum Blog Image

To Lump Sum or Not to Lump Sum?

Y or N Lump sum Blog Image

The term “lump sum” has become as popular a buzz word as we’ve heard in the mobility industry. Lump sums were a hot topic pre-COVID and continue to be a widely discussed, and often contested, issue in our current landscape.

In early 2020, Altair released the third installment in the Momentum Productivity Study Series, focusing on individuals who relocated under a lump sum only relocation program. The findings, while not necessarily surprising, were insightful. Even when receiving a lump sum of $15k or more, employees lost a minimum of 31 days of work productivity during the relocation process. This tells us while lump sum programs offer relocating employee flexibility, missing are the tools, resources, checklists and counseling to assist the employee in making sound, educated decisions related to their move.

Since the onset of COVID-19, companies continue to discuss lump sum programs with heightened interest, as many industries struggle with a downturn in activity and revenue. Based on what Altair’s Global Consulting team has seen over the past nine months, the motivations for considering a lump sum approach depends on where companies fall on the continuum of COVID impacts. Some companies are having to reduce or control costs due to the negative business and economic results of the pandemic. Others are facing the need to shore-up or even increase benefits to facilitate mobility in an environment with relatively high reluctance to move and/or the inability to move efficiently between locations just given the limits on and complexities of physical travel. For the former, a lump sum approach is attractive because it maximizes flexibility while also bringing caps/limits and predictability of costs to complement a cost management focus. For the latter, a lump sum approach may be attractive more so for the flexibility it gives employees to make decisions that best suit their preferences and concerns about moving in this environment instead of a concern about saving costs.

In all cases, the risk/reward of moving to a lump sum approach needs to be fully considered.

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About Global Consulting Services

Altair Global Consulting Services

One size doesn’t fit all when it comes to our Client Partners’ programs, policies and cultures. In order to deliver an unmatched mobility experience, we provide expert recommendations and insights to build and strengthen our clients’ benefit offerings to meet their overall business and talent mobility objectives for the future. Working with more than 100 companies each year, Altair’s Global Consulting Services team takes a holistic approach to mobility by arming clients with first-rate data, research and trend information to find the best relocation and mobility solutions for your employees, your mobility program and your company.

Published On: January 11, 2021

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