Lump Sum or Managed Services - What's Your Best Bet?

Moving abroad presents a big challenge. People must reorganise their lives, and where the move is for work, they often only have a short period to orientate themselves in the new environment.

Learn how to successfully relocate your expat assignee

Finding a place to live and understanding transportation, as well as dealing with bureaucratic obligations such as opening a bank account, registering their address, and getting their children enrolled in school are only a few of the many tasks that expats face – and all of that in a foreign culture and language.

Companies have taken two very different approaches to supporting their expats. Regardless of which one you favour, it is in your interest to ensure that your assignees settle in as soon as possible and want to stay in their new country.

An unnecessarily complicated relocation can delay the start date or – in the worst case – lead to an early return because they did not feel at home in their new environment.


Lump sum relocation package

This approach pays your assignees a specified lump sum to take care of the relocation themselves. This offers them ultimate flexibility as they can pick and choose the services they want and need. Some may bring their families, some their pets; others may go on their own. The benefit is obvious – not only can they choose the services they need, but if they organise the majority on their own, they can pocket the remainder of the lump sum. This not only benefits their bank account, but it is also cheaper for you, their employer.

The alternative, a managed service, is more expensive and requires personnel resources to authorise and coordinate. So, by letting expats take care of everything, it does seem like a win-win situation, doesn’t it?


A win-win when it goes well

Delve into the benefits of a positive expat experience
Both you and your assignees benefit if everything goes smoothly, and they pick the right services and providers. But what if they don’t? Furniture may get lost or damaged, a rental deposit can disappear together with the promised apartment. Expats also face trouble if they don’t know the customs of the host country.

If these things happen, expats are on their own to deal with the repercussions, since they are the ones who concluded the contract with the service provider or failed to understand local processes, customs and culture. Ultimately, however, there will be consequences for you, too, including the possibility that your assignee may terminate the assignment altogether.


Managed service relocation package

While more expensive, you – the employer – have more control over the entire relocation process. You can step in if anything goes wrong and make sure your assignees receive the support they need.

When facing a corporation, landlords and providers may be less willing to breach the terms of their contract than if they’re dealing with an individual. Plus, your assignees benefit from the relationships and commercial clout that come from a corporate contract, not to mention the vast knowledge and experience their employer has when it comes to things like culture, process and best practices in the host country.

Providing a managed service is the benchmark nowadays to ensure that the relocation goes smoothly. Not least because if your assignee decides to terminate the assignment because the relocation went wrong, it is likely to be more expensive than paying a service provider to help manage the relocation to make sure it is successful in the first place.

Of course, this depends on reliable service providers with the necessary skills and experience to ensure the relocation goes off without a hitch.


What’s your choice going to be?

Choosing between expat relocation options
Depending on your priority, each approach comes with its own advantages. That’s precisely why AGS Relocation provides both lump sum and managed service options. We also offer the core-flex or capped-move approach which aims to give you the best of both.

If you wish to actively guide your assignee’s relocation journey, we collaborate with you to curate a relocation package according to your global mobility policy. This ensures you have peace of mind knowing your assignees will land at their new job focused, stress-free, and prepared to dive right in.

If cost-effectiveness is your priority, we directly engage with your assignee, using our wealth of experience to propose solutions that fit their personal circumstances.

And finally, if you want the cost-effectiveness of the lump-sum approach combined with the peace-of-mind guarantee of managed services, we become your core-flex or capped-move partner. Using your assignee’s lump sum, we create a relocation package tailored to their unique circumstances, while making regular progress reports to you.

Every service we offer — from finding a home, registering an address, handling immigration, to relocating household goods — is provided either by us directly or through our reliable partner network. This means you can breathe easy knowing that, regardless of the strategy you choose, your assignee won’t encounter any unpleasant surprises during their relocation.

For a global mobility solution that fits your budget and values employee experience, contact us for a no-strings-attached discussion of your needs.

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