Organizations focused on optimizing cost performance are increasingly adopting core-flex approaches for employee mobility benefits. These policy types are fast becoming the norm and are particularly popular for permanent transfers of lower level profiles and inexperienced new hires. According to Benivo’s 2023 Core-Flex Policy Benchmark Survey, among the 64 respondents 53% indicated they have core-flex policies in place, and among those without core-flex today 90% report either having the policy types in development or on their radar for future use.
Molding Policies to Employee and Stakeholder Needs
The process of designing and implementing core-flex policies involves a commitment to continuously refining the program based on usage patterns, end user feedback, and other key metrics. This approach helps mobility teams remove friction from the relocation process and meet the unique needs of employees and hiring/receiving managers alike. To optimize these flexible policies, it's essential to monitor exception data, post-mortems on rejected offers and failed assignments, and other end user feedback regularly.
Cost Optimization Through Flexible Structures
While core-flex structures alone may not save costs, they can complement cost optimization goals if structured properly. When compared to lump sum approaches, mobility teams have more visibility into how funds are spent which allows them to drive volume to preferred providers, ultimately delivering more value to employees. To ensure cost efficiency, it's important to establish per-move budgets based on factors such as family profile, move distance, employee level, and move type. To cost optimize core-flex policies, it's crucial to regularly review and re-assign provisions as core or flex, as well as optimize budgets to align with patterns of usage and stakeholder feedback.
Considering Core-Flex? Maybe Take an Incremental Approach
If you're exploring the idea of adopting core-flex policies but are concerned about the resources needed for implementation and management, consider an incremental approach. You could target a specific talent population that is offered a limited scope of benefits and may be reasonably assumed to have less move complexity (e.g. more likely single/ unaccompanied, less household goods and more likely renting a home). These might include entry-level new hires or college graduates. You might also simply adopt a modest grouping of flex components under a consolidated spending cap within any of your existing mobility policies.
Testing the Waters of Core-Flex Policies
Remember that nearly every company has been operating core-flex mobility policies in some form, even if they don't realize it. If your policy includes a miscellaneous expense allowance (MEA) or a lump sum component that covers a grouping of mobility provisions, you essentially already have a core-flex policy in place. By building on what you know, you can test the waters with a more fully-realized core-flex approach. While core-flex policies may not be a perfect fit for every company culture, incremental experimentation can help you determine if they're right for your organization. And if they do work well, you can adapt and expand the approach to further optimize your employee mobility program.
Contact Benivo’s Client Advisory team today to request a free consultation. Our experienced advisors stand ready to offer insights into effective strategies for optimizing the performance of your mobility program.