There's a lot to think about if your company is considering going to a lump-sum employee relocation package rather than reimbursing moving expenses for relocating employees. Here are a few factors you may not have considered.
Employee satisfaction may be lower when employees are left to manage their own funds, as with a lump-sum relocation package. Employees looking to save a few bucks (and pocket the difference) when they receive a lump-sum relocation package to pay for their moving expenses may end up unhappy with the service they receive if they shop by price for relocation service providers. This could result in a slower return to productivity as well as a lower employee retention rate following the move.
Employees who are busy organizing and managing their move will not be fully focused on their job. Moving can be a stressful time. When employees are left to fend for themselves when selling their home, lining up household goods movers, and even finding a new place to live, their minds are not on their job. This could result in lost productivity.
A lump-sum employee relocation package may not save your company money in the long run. Letting employees manage their own move can result in relocation delays if a house won't sell, and can lead to lost productivity. While lump-sum packages save your company money in administrative costs and time, they may not represent the significant cost savings you believe, especially if employee relocation packages that reimburse expenses lead to all-around greater employee satisfaction and low-stress relocations.
We're not specifically advocating one type of program over another, but it's a good idea to evaluate your situation -- or call on a relocation management company to help -- if you are thinking of changing your employee relocation policy.