If you're involved in global mobility, you've likely heard about the growing trend of "managed budgets" as an approach to handling relocation policies and employee moves. Managed budgets aim to strike a balance between two extremes: the complete flexibility of lump-sum payments versus the rigid structure of traditional relocation policies.
As the name implies, with a managed budget policy, the company sets an overall relocation budget for the employee move. However, within that capped budget amount, the employee has the flexibility to select which specific services and suppliers they want to use from an approved roster.
It's like the "Goldilocks" porridge - not too hot with excessive restrictions, and not too cold with unlimited choice. The managed budget approach provides budget certainty for the company while giving the transferee meaningful flexibility in designing their own relocation experience.
How Does It Work?
With managed budget solutions powered by technology platforms like Benivo, employees can log in and view their total budget along with pre-vetted supplier options across common relocation service categories like household goods shipping, home-finding assistance, temporary housing, and more. The employee can mix and match services up to their budget limit.
These platforms show fully transparent per-service costs, some fixed and some variable based on specs like family size. Employees submit needs details through the platform to initiate services with suppliers. For one-off ad-hoc expenses, there are slick reimbursement tools where employees can upload receipts for fast expense reimbursement.
The Right Balance
A key advantage of managed budgets is achieving the right balance of employee flexibility and corporate control. With lump sums, employees gain maximum flexibility but companies lose visibility, and duty of care obligations become murky. Traditional policies provide structured support but lack customization to personal needs. Managed budgets allow companies to still set quality requirements by vetting and approving suppliers on the platform. Relocation counselors can guide while letting employees make choices within program guardrails. This balanced approach resonates with programs aiming to elevate the employee experience while ensuring cost predictability and policy compliance.
Data, Analytics, and AI Opportunities
Because all services, costs, and moves flow through a central platform with managed budgets, robust data consolidation and analytics become possible. Companies gain insight into budgeting trends, service selections, timelines, and more. Over time, this centralized data allows for powerful predictive analytics. For instance, being able to accurately forecast completing moving timelines and costs based on data about the transferee's family specifics, origin, destination, and other attributes.
While AI assistance for employees may still be premature, AI can start being leveraged by mobility teams themselves to expedite program administration and decision-making.
The "Goldilocks" managed budget model is gaining traction by striking the right balance between employee experience and company control. With the right technology platform, like Benivo's Unified Mobility Platform, it can enable a best-of-both-worlds approach infused with data-driven insights.
You can access the complete discussion from The View From The Top here. Contact us to learn more about how Benivo can help.
