With 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 MODEL
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.
TIPS FOR DESIGNING A CORE-FLEX POLICY
Designing a core-flex policy takes time and work. Nevertheless, by committing to creating a comprehensive program from the start, making periodic updates and adjustments becomes easier. It’s advisable to establish several factors up front:
COMPETITIVE CORE-FLEX POLICIES IN SPECIFIC INDUSTRIES
HR departments and mobility managers should begin by researching what their competition provides in terms of mobility benefits. Because mobility benefits are critical to attracting top talent, knowing what competitors offer will provide some guidance about the services to include, as well as the average budget for each. Of course, it may be challenging to find this information, so consulting with an experienced global mobility company to gain insights about the components of the average core-flex policy can be helpful.
As we’ve seen, household goods moving, travel costs and other benefits the company considers critical are standard core components. Depending on the company’s needs and budget, relocation counseling, visa and immigration services, tax equalization, lease services, temporary housing and home-finding assistance may also be included, especially for long-distance and international moves.
FLEXIBLE SERVICES OFFERING
Flexible benefits can include home finding trips, home sale and home purchase support, property management, mortgage assistance, temporary living, spousal support and career services, child and elder care assistance, language training, cross-cultural training, school search assistance, pet transport, vehicle transport, lump sum assistance and tax services.
Note that whether a service is categorized as a core component or an additional service depends entirely on the employer. Companies in competitive markets that want to surpass the competition may decide to include more services in the core component to attract more talent.
This is determined by factors such as employee seniority, family size, relocation distance, international travel and homeownership. It should be clear that most companies will allocate a larger budget to senior managers than junior employees, that homeowners need more support than renters and that international moves have different core and flex needs than domestic ones.
FLEXIBLE SERVICES SELECTION
Given the sensitive nature of these selections, a global mobility management company can be a key resource in these discussions and in providing recommendations and guidance to both the employer and employee. HR professionals and even supervisors may not have a full understanding of their employees’ personal lives and their corresponding responsibilities. For example, a manager might not know that a transferee cares for a disabled parent or that an employee wants his or her children to attend a specific kind of private school. In short, it’s essential to give employees a say in determining which services he or she receives and come to an arrangement that suits both employee and employer. The expertise and experience of a global mobility management company can be helpful in providing advice on which flexible services companies may want to consider including in their policy.
THE CHALLENGES OF DEVELOPING A CORE-FLEX PROGRAM
Developing a core-flex program can be challenging, especially for organizations that are inexperienced with corporate mobility.
DETERMINING PRECISELY WHAT BENEFITS TO OFFER
The choice of benefits should be competitive – but it should also be financially viable. The included services must be representative of the company culture and the level of employer support employees can expect, while at the same time fitting within the constraints of the available budget.
BALANCING CORE AND FLEXIBLE BENEFITS
Again, this needs to be competitive and realistic. Adding more services to the core component might bring in more talent, but it could also result in a larger financial investment than necessary or even possible.
ESTABLISHING REPORTING AND METRICS PROCEDURES
Organizations need robust reporting and metrics procedures to keep track of the costs and success of the program. Most corporate mobility companies provide client dashboards where this data is collected and analyzed for review. Employers that wish to manage this aspect in-house will need to integrate relocation reporting and metrics into their existing HR management systems.
ENSURING CONSISTENCY OF POLICY APPLICATION
It's critical to be consistent in applying the core-flex policy to ensure compliance and employee satisfaction. Establishing clear rules regarding qualifying factors is a requirement to make sure all decisions to provide specific services to employees are based on data, not personal preference or guesswork.
DEVELOPING NEW PROCESSES
Companies should develop new processes to assess employees' eligibility, assign the appropriate services and accurately document each case. Clear and efficient processes reduce the chances of errors and complications. HR should collaborate with the mobility manager and any other stakeholders to establish streamlined processes that facilitate the implementation and periodic reassessment of the core-flex policy.
Creating a core-flex program is a complex endeavor, and one that requires a certain amount of expertise. Yet it’s also one that can yield considerable returns in terms of employee productivity and engagement, as well as improve employer brand reputation. For many companies, it is the optimal policy to blend the employer's strategic goals with employees' unique needs, providing service benefits while containing costs.
It can be helpful to work with a corporate global mobility company that can assist in developing a comprehensive program that contains mobility expenses, while simultaneously offering a competitive set of core and flexible services.