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Core-Flex Policy Basics

Posted by Amy Mergler on Fri, Jan 19, 2018

Be Flexible sign with clouds and sky background.jpegWith an increase in global mobility, organizations are looking for ways to create flexible and affordable relocation packages. In fact, recent research shows that 88 percent of companies are incorporating aspects of core-flex policies into their mobility programs. But what are core-flex policies exactly, and how can they benefit both employees and employers?

What is a Core-Flex Policy?

A core-flex policy is a corporate mobility policy that consists of two core components. The first component comprises relocation benefits that all transferees need: travel costs, household goods transportation and other benefits that the company may consider critical. The second component includes a range of services that can be added depending on the individual’s needs, such as spousal and family support, home sale and purchase assistance, pet care and transportation, administrative and tax support, immigration services, language and cultural support, etc.

Advantages of a Core-Flex Policy

For organizations of all sizes, core-flex policies offer advantages over lump sum allowances and full-service mobility packages. There’s the potential for cost savings because both the core components and flexible service options can be designed to contain costs. Individual packages can be customized to specific employees’ needs, resulting in accurate expense allocation for every transferee.

Let’s say, for example, that a company needs to relocate two equally ranked managers to a new manufacturing plant. One is married with three children; the other is single. Due to the different makeup of their households, the first manager needs more benefits than the second to relocate successfully. With a core-flex policy, the employer has the flexibility to allocate more services and funds to the first manager’s relocation while still providing the second manager with all the services he or she needs—yet at a much lower cost.

By their very nature, core-flex policies reduce policy exceptions. When a company has well thought-out core and flex components, it becomes easier to ensure sufficient relocation support for the myriad of different transferee needs.

A core-flex policy is also a powerful recruitment tool. Millennials and Gen Z workers are among the most mobile generations in the workforce – and they want to be valued as employees. Customizable mobility packages – as opposed to a one-size-fits-all solution – align with their preferences and go a long way to attracting and retaining top talent.

All of this together empowers HR and hiring managers because they know exactly what level of support they can offer to employees and candidates without having to wait for additional authorization. This contributes to faster, more efficient processes, and fosters employee engagement.

Disadvantages of a Core-Flex Policy

There are also several disadvantages to a core-flex policy. First, it requires a more complex administration than strictly defined policies. While every transferee receives the core components, managing and accurately documenting the flex policy components in each case involves a lengthier, more complicated process.

Core-flex policies can also be more time consuming to design and support than other types of policies. HR teams will typically need to do more research when developing core-flex policies to be sure that the two components offered either match or exceed what the competition is offering. Failure to do so could result in the loss of top talent to the competition.

In addition, time is required during the implementation of the plan to do a needs assessment for each employee. Without doing these assessments there is a significant risk of not providing the best benefits to the employee or in overspending for unnecessary services.

Finally, another important drawback is the possibility for dissatisfaction among employees. If an employee learns that a coworker received a benefit that they didn't, there's the potential for resentment, which could lead to diminished employee engagement and possibly, attrition. There is also an increased likelihood for exception requests and negotiation. A well-designed and properly executed core-flex policy with clear policy language regarding flex options, management and intention, can reduce these problems.

Guide to Core-Flex Policies

Topics: global mobility, core-flex policies, talent mobility

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