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Lump Sum Use

Supplemental Use Remains Higher

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

Even as companies continue their reliance on lump sums, they are using them not just to replace relocation benefits but as a flexible supplement 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, around four in ten apply them for the entire cost of relocation, essentially consistent with findings since measurement began. On average, half of these companies use lump sums for travel expenses, miscellaneous expense allowances, household goods shipping/storage and temporary housing. Each follows a general trend of progressively increasing across these categories over the past decade except for miscellaneous expenses, which trends slightly lower. Firms using lump sums for rental assistance/transactions and real estate assistance/transactions have also progressively increased to roughly one-third.

  • One in every two firms uses lump sums for most expense categories on this list, showing wide diversity in their application for relocation management. The exceptions: entire relocation cost (four in ten firms), rental assistance/transactions (one in three) and real estate assistance/transactions (one in three).
  • Usage of lump sums has increased notably over time:
  • Since 2015, around one-third of firms used lump sums for rental assistance/transactions compared to 16%-21% from 2011-2014.
  • For the sixth year running, nearly twice as many firms used lump sums for real estate assistance/transactions (32% vs. 11%-15% for 2011-2014).
  • Except for 2018, firms applying lump sums to household goods shipping/storage has progressively increased since 2011 to roughly half (45% vs. 28%).
  • In the past, far more differences existed among companies in how lump sums were applied. In recent years, frequencies of lump sum use are mostly similar across company size. Notable differences this year include: mid-size and small firms are less likely to use them for temporary housing (36% & 47% vs. 56% of large firms) and small firms are much more likely to use them for household goods shipping/storage than larger firms (54% vs. 41% mid-size & 39% large).

As lump sum usage has grown, the survey has incorporated questions about monetary ranges for categories of reimbursement. Over the past seven years, most offerings are more frequent and generous than in 2013 and 2014, despite some being lower than 2015. The overall median ranges match the highest levels in seven years for every category. However, there remain differences in offerings by company size.

  • The median amounts offered for lump sum miscellaneous expense allowances varied widely by firm size; mid-size firms were the mid-range ($2,500-$4,999). Large firms were slightly more generous, small firms slightly less generous.
  • Mid-size and large firms offered the same median amounts for real estate assistance/transactions ($5,000-$9,999), household goods shipping/storage ($5,000-$9,999), temporary housing ($5,000-$7,499), rental assistance/transactions ($2,500-$4,999) and travel expenses ($2,500-$4,999). Small firms were slightly less generous for each category.
  • Median amounts across company size were the same for the entire relocation cost ($10,000-$14,999).
 
Question 32-a1
For what types of relocation costs are lump sum payments typically offered?
Chart Q32-a1
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Question 32-a2
For what types of relocation costs are lump sum payments typically offered?
Chart Q32-a2
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Question 32-c1
What are the typical ranges of lump sums offered?
Chart Q32-c1
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Question 32-c2
Typical range for lump sum payments - real estate assistance
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Question 32-c3
Typical range for lump sum payments - household goods shipping
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Question 32-c4
Typical range for lump sum payments - entire relocation cost
Chart Q32-c4
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Question 32-c5
Typical range for lump sum payments - rental assistance
Chart Q32-c5
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Question 32-c6
Typical range for lump sum payments - travel expenses
Chart Q32-c6
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Question 32-c7
Typical range for lump sum payments - temporary housing
Chart Q32-c7
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Question 32-c8
Typical range for lump sum payments - miscellaneous expense allowances
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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 40% use lump sums for short-term/temporary assignments for a second straight year, a marked increase over 2018 (44% & 42% vs. 27%). Additionally, use of lump sums for international long-term assignments also jumps to 40%, which is a marked increase over roughly one-third historically. One in five firms use lump sums for alternative assignments, similar to last year. Use of lump sums for short-term/temporary assignments is now essentially the same for firms across size. Mid-size and large firms are the most likely to use lump sums for international assignments (42% & 46% vs. 33%).

Among firms using lumps sums, usage rates across executives and experienced professionals have increased progressively. However, this year, use of lump sums for entry-level employees sees a slight dip to more mid-level ranges historically.

A progressive overall decline remains the trend for new hires, and usage of lump sums ticks up slightly for transferees but remains below historical norms. Usage of lump sums for homeowners remains dramatically higher for a second year, notably above historical norms, while for renters it remains right within the historical midrange.

  • Small firms are the most likely to offer lump sums to experienced professionals compared to larger firms (69% vs. 54% and 52%).
  • Six in ten small and mid-size firms use them for executives; just half of large firms do so.
  • Around one in three firms across size use lump sums for new hires, homeowners or renters.
  • Large firms are more likely to offer lump sums to transferees than small firms (46% vs. 34%).
 
Question 32-b1
What types of relocating employees most commonly receive lump sum payments?
Chart Q32-b1
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Question 32-b2
What types of relocating employees most commonly receive lump sum payments?
Chart Q32-b2
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Question 32-b3
What types of relocations most commonly receive lump sum payments?
Chart Q32-b3
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Question 32-b4
What types of relocations most commonly receive lump sum payments?
Chart Q32-b4
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