Lump Sum

 

Continued Use as Supplemental and Full Program Options

The use of lump sums by roughly half of firms continues, and so does our deeper investigation into how these are used. Overall, around a fourth of firms use lump sums to pay for entire relocations. However, lump sums are also used in a supplemental manner to cover specific costs associated with relocation. This year’s survey continues to probe these uses, and notable trends have emerged.

Among firms that use lump sums, far more now include temporary housing costs (50%) than in previous years (38%-43%). For the second year in a row, nearly as many used lump sums to cover real estate assistance/transactions (25%) or rental assistance/transactions (32%), considerably above averages from 2011-2014 (11%+ and 16%+, respectively). The percentage of firms using lump sums for household goods shipping/storage continues a trend of steady growth from 2011 (28%) to a historic high (44%). Roughly half of firms use lump sums to cover five of the seven cost types, underscoring the diversity of these tools for relocation management. While 44% use them for the entire relocation cost, supplemental use occurs among these firms as well. In other words, lump sum relocations may include moves that are lump sum only as well as those that use lump sums in supplemental ways.

  • Overall, small and mid-size firms are more likely than large firms to use lump sums to cover household goods/shipping costs (45% and 51% vs. 34%), while large and small firms are more likely than mid-size firms to use lump sums for miscellaneous allowances (59% and 49% vs. 38%).
  • In the past, far more differences appeared among company sizes for how lump sums were applied; now the usages are mostly similar.
Question 32a-1
For what types of relocation costs are lump sum payments typically offered?
Chart Q32a
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Question 32a-2
For what types of relocation costs are lump sum payments typically offered?
Chart Q32a2
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Employee and Relocation Types Receiving Lump Sums

Companies using lump sums indicate domestic relocations overwhelmingly as the most frequent application (85%), true for the vast majority of firms of all sizes. Around a third overall use lump sums for short-term/temporary assignments or international long-term assignments. Only around one-seventh of all firms use lump sums for alternative assignments. Mid-size and large firms are more likely than small firms to use lump sums for short-term/temp assignments (40% vs. 29%); they are a bit more likely as well to use them for international long-term assignments (35% and 38% vs. 26%).

The use of lump sums across employee types continues to bend and shift in response to the changing environment of relocation. When first measured in 2011, around half or more of firms said most employee types, except for homeowners, commonly received lump sum payments. Gaps began widening in 2012 and, in 2013-2014, new hires were more likely than transferees to receive lump sums. However, the landscape is changing. For 2015 and 2016, far more firms report using lump sums for executives than in prior years (59% and 54% vs. 32%+), and far fewer firms are using them for new hires (44% and 43% vs. 59%+). These changes for executives are being driven by increases in use by mid-size and large firms, even as usage dips slightly from last year among small firms. The continued decreased use of lump sums for new hires continues to drop this year among small firms and remains lower than prior to 2015 among mid-size firms (40% vs. 58%+). However, it increases a bit for large firms (56%) after dropping considerably in 2015 (44% vs. 63%). And while the use of lump sums for experienced professionals last year was similar to historical norms (52%), it jumps markedly this year (61%). Mid-size firms, in greater number than ever before (74%), are driving this change. Last year also saw usage dip for entry level employees, for renters, and for homeowners; but these returned closer to historical norms in 2016.

  • Among large firms, more than half use lump sums across employee levels and employee types; far fewer base lump sum offerings on renter (42%) or homeowner (33%) status.
  • New hires are more likely to receive lump sums from large firms than from mid-size or small firms (56% vs. 40% and 39%).
  • Mid-size and large firms are more likely than small firms to provide lump sums to executives (67% and 63% vs. 48%). Large firms are more likely than small firms to offer lump sums to entry level employees (63% vs. 44%). Mid-size firms are least likely overall to offer lump sums to entry level staff (29%). Mid-size firms are most likely to offer lump sums to experienced professionals (74%) compared to small firms (57%) and large firms (52%).
  • Relocating homeowners are more likely to receive lump sums from large firms than from mid-size or small (33% vs. 18% and 20%).

As lump sum usage has grown, the survey has incorporated questions about the ranges offered for various categories of reimbursement. Looking at the past three years, most offerings are more generous and more frequent than in 2013 and above or on par with 2014, despite some dips below the higher ranges in 2015. Overall, median ranges for real estate assistance/transactions, household goods shipping/storage, and entire relocation costs remain at four-year highs, while ranges for rental assistance/transactions, travel expenses, temporary housing, and miscellaneous allowances dip one range lower.

  • Median amounts offered by large and small firms were the same for the following categories (mid-size firms were slightly more generous): entire relocation cost ($10,000-$14,999), rental assistance/transactions ($1,000-$2,499), and travel expenses ($1,000-$2,499).
  • Median amounts offered by small and mid-size firms were the same for the following categories (large firms were slightly less generous): real estate assistance/transactions ($5,000-$9,999) and household goods shipping/storage ($5,000-$9,999).
  • The median amount offered by mid-size and large firms for miscellaneous allowances was the same ($2,500-$4,999), with small firms slightly less generous. The median amount offered for temporary housing was the same across company size ($2,500-$4,999).
Question 32b-1-1
What types of relocating employees most commonly receive lump sum payments?
Chart Q32b-1
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Question 32b-1-2
What types of relocating employees most commonly receive lump sum payments?
Chart Q32b-2
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Question 32b-2-1
What types of relocations most commonly receive lump sum payments?
Chart Q32b2-1
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Question 32b-2-2
What types of relocations most commonly receive lump sum payments?
Chart Q32b2-2
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Question 32c-1
What are the typical ranges of lump sums offered?
Chart Q32c
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Question 32c-2
Typical range for lump sums payments - real estate assistance
Chart Q32c-2
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Question 32c-3
Typical range for lump sums payments - household goods shipping
Chart Q32c-3
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Question 32c-4
Typical range for lump sums payments - entire relocation cost
Chart Q32c-4
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Question 32c-5
Typical range for lump sums payments - rental assistance
Chart Q32c-5
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Question 32c-6
Typical range for lump sums payments - travel expenses
Chart Q32c-6
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Question 32c-7
Typical range for lump sums payments - temporary housing
Chart Q32c-7
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Question 32c-8
Typical range for lump sums payments - miscellaneous allowances
Chart Q32c-8
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