Lump Sum Use

The use of fully reimbursed/cost-covered relocations has declined progressively to its current historical low. For the past seven years, companies estimate that one in four relocations are lump-sum payment only (for the entire relocation) and roughly one in five are partially reimbursed.

Even as companies expand their reliance on lump sums, they are using them not just to replace relocation benefits but as a supplement with flexibility for specific costs. Our survey continues to investigate which costs fall under lump-sum payments, and to whom and for what types of relocations they are applied.

Among firms using lump sums, fewer than half apply them for the entire cost of relocation, essentially consistent with findings since measurement began. Usage has increased progressively for travel expenses, household goods shipping/storage, temporary housing, rental assistance/transactions, and real estate assistance/transactions. About half report lump sums are used for miscellaneous expense allowances, in the mid-range historically.

One in every two firms use lump sums for nearly every expense category on this list, showing wide diversity in their application for relocation management. The exceptions: rental assistance/transactions (one in three firms) use real estate assistance/transactions (one in four).
In the past, far more differences existed among companies in how lump sums were applied; in recent years, frequencies of use are mostly similar across company size. Notable differences this year: small and mid-size firms are less likely to use them for miscellaneous expense allowances (40% & 46% vs. 64% of large firms) and much more likely to use them for household goods shipping/storage (54% & 54% vs. 30% of large firms).
Since 2015, roughly a third of firms have used them for rental assistance/transactions compared to the 16%+ average from 2011-2014.
For the fifth year running, nearly twice as many firms use lump sums for real estate assistance/transactions than in prior years (28% vs. 11%+).
Except for 2018, usage for household goods shipping/storage has increased progressively since 2011 to roughly half of lump sum using firms applying them to this expense.

As lump-sum usage has grown, the survey has incorporated questions about monetary ranges for categories of reimbursement. Over the past six years, most offerings are more frequent and generous than in 2013 and 2014, despite some being lower than in 2015. The overall, median ranges match or exceed the highest levels in six years for: entire relocation cost, real estate assistance/transactions, travel expenses, temporary housing, and miscellaneous expense allowances.

However, offerings for household goods shipping/storage and rental assistance/transactions fall one range lower.

Large and small firms offered the same median amounts for household goods shipping/storage ($1,000-$4,999), rental assistance/transactions ($1,000-$2,499), and travel expenses ($1,000-$2,499); mid-size firms were slightly more generous.
Mid-size and large firms offered the same median amounts for real estate assistance/transactions ($5,000-$9,999) and miscellaneous expense allowances ($2,500-$4,999). Small firms were slightly less generous.
Median amounts across company size were the same for the following categories: entire relocation cost ($10,000-$14,999) and temporary housing ($2,500-$4,999).

Question 36-a1

For what types of relocation costs are lump sum payments typically offered?

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Question 36-a2

For what types of relocation costs are lump sum payments typically offered?

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EMPLOYEE AND RELOCATION TYPES RECEIVING LUMP SUMS

Most firms across company size continue to most often apply lump sums for domestic relocations. More than forty percent use them for short-term/temporary assignments, a marked increase over last year (42% vs. 27%). Around a third overall use them for international long-term assignments, and one in five use them for alternative assignments, an uptick from previous years (14%+). Roughly half of small and mid-size firms use them for short-term/temporary assignments, notably more often than large firms (29%). Mid-size firms are the most likely to use them for international assignments (45% vs. 19% & 28%).

Among firms using lumps sums, usage rates across levels (e.g., executives, experienced professionals, etc.) overall have increased progressively. A progressive overall decline emerges for new hires, but usage dips only slightly below historical norms for transferees. Usage for homeowners this year shows the most dramatic rise above historical norms, while for renters it falls right in the historical midpoint.

Entry-level employees are the most likely to receive lump sums from large firms (64%), but mid-size firms are again much more likely to offer them than small firms are (51% vs. 38%).
Large firms are by far the most likely to offer lump sums to new hires (60%), compared to around a third of smaller firms.
Small and mid-size firms are more likely to offer executives lump sums than large firms are (65% and 57% vs. 41%).
Six in ten firms across size use lump sums for experienced professionals; a third or more also use them for homeowners or transferees.