Four Things to Consider Before You Adopt a Core-Flex Mobility Benefit Program
At multiple Graebel-hosted insideMOBILITY Global events core-flex has been a hot topic. Companies are starting to actually implement and iterate this type of up-and-coming model. I witnessed the eagerness firsthand when I recently moderated a workshop on how to build a core-flex program at our annual Global Mobility Summit.
Core-Flex has a lot going for it. In its simplest form, companies define the core relocation benefits every assignee receives while allowing each person to choose additional benefits and allowances. This approach has proven popular with employees, and from the company perspective it helps lessen exceptions and is typically a cost saver.
However, translating the Core-Flex concept to a real-world global program is anything but simple. Most companies end up adding more complexity to this model. Should all employee packages – from new hires to senior executives – have the same core elements? Should the business weigh in or even make flex choices on behalf of the employee?
After being involved in setting up and administering dozens of Core-Flex programs for Graebel clients, I’d like to point out some factors companies should consider sooner rather than later – whether they’re just heading down the Core-Flex path or revising their Core-Flex program to make it even better.
Here, then, are four critical issues to consider when planning your unique Core-Flex program.
1. The tradeoff between the number of packages and ease of administration
Most of our clients establish hierarchical packages of core benefits and flex options that reflect transferee status. We generally recommend companies utilize three to four basic packages – let’s say for simplicity’s sake: entry level employees, management and executives.
First, avoid going too far too fast with the amount of flex options. The look and feel should reflect your historical Mobility benefit approach as much as possible. For example, if you’ve tended to differentiate quite a bit based on hierarchy and then shift to a two-tier Core-Flex program, employees may revolt. Conversely, if you suddenly provide more options to the business than normal, the business now has a bigger learning curve to understanding these benefits which can lead to confusion. If you offer too many core items, the business may opt to take core benefits out of the package, undermining the Core-Flex program. This is a slippery slope that can result in more exceptions.
It’s always good to keep in mind that the more levels you create, the harder it will be to differentiate the packages, and confusion will ramp up accordingly. For every additional program, you exponentially increase the complexity of administration due to additional consulting, educating and oversight.
It’s all a balancing act as well as a function of knowing the needs of the stakeholders and employees.
2. Account for the right level of personal consulting
Depending on the level of change from your old programs to your new Core-Flex, you should expect to dedicate more time to your transferees and stakeholders – and much more time if you previously used a more traditional benefits program. If your degree of change is more modest or if you maintain a simple approach to Core-Flex, you can expect less change management and training. Employees might be able to navigate the new Core-Flex program more independently, especially with guidance from your relocation management company (RMC). The more change you introduce the more you’ll want to offer a personal touch and allocate additional time for consulting both internally and from the RMC.
3. How competitive does your Core-Flex program need to be?
Be sure to account for the fact that candidates and current employee-assignees make employment and retention decisions based on more than just salaries and benefits. In general, if you’re in a hyper-competitive industry (tech comes to mind), you’ll want your Core-Flex relocation program to:
- Be front loaded with benefits like cost of living adjustment (COLA) support and home purchase assistance (if in the United States)
- Give the business some flex option authority so they can compete for employees
- Reflect the priorities of your target employees – e.g., cash-based in the tech field and more “bells and whistles”-oriented in the healthcare or communications space
Above all, continually review your program. Track which flex benefits are used the most and least and then adjust your offerings accordingly to make your packages more relevant. Benchmark against your competitors to make sure you’re not being too generous or stingy. Your RMC is in a unique position to help you with all of this.
4. How will you administer the program?
Implementing a Core-Flex program involves benchmarking, estimating costs, predicting usage, understanding institutional and employee priorities, communicating, employee counseling, business consulting, tracking and measuring. How can you do all of this most efficiently?
An RMC is one way to limit your workload and minimize your Mobility full-time employees. Of course, I’m biased in this regard! I and the other consultants at Graebel have been engaged with Core-Flex programs as they’ve evolved in the last decade. We’ve pulled together our best practices (things we and others have learned the easy and the hard way!) in this recently released Guide to Designing a Successful Core-Flex Program.
Remember that internal versus external Core-Flex administration is not an all-or-nothing proposition. Some clients retain us strictly for things like consulting, benchmarking and internal surveying, while others ask us to take a lead in planning and budgeting. Others have us administer the whole thing.
Core-Flex is the wave of the future and a growing trend in the Mobility community. The approach makes sense for most companies, but the generalities stop there. The four decision elements I’ve described give you a taste of how much you’ll need to customize and tailor your program to make it work for you.