Managing Supplier Quality in a Lump Sum Program

Lump sum programs may seem like an easy solution. But, the concept is not always as simple as it seems.

Employers are often attracted to the concept of a Lump Sum Program for relocation: Give the employee a check and let them manage how they get to the new location. It certainly is easy, and it may sound simple. But, the concept is not as easy or as simple as it seems at first glance.

Taking this approach can push the employee into the world of supplier selection and logistics management. Most employees have no experience and are not prepared for managing this process. This can result in the employee making poor timing and supplier selections. While hiring Joe’s Moving Company can be tempting and cheap, the results can be a relocation nightmare. Often, employees experience delays and frustration. Sometimes, they even need their employer to step in and try to rescue them from a challenging situation.

It’s certainly desirable to give employees adequate funds and some flexibility to accomplish a move. A key ingredient to a successful move, however, is to ensure that the employee has access to quality suppliers. It’s important to use suppliers who are reputable and have the motivation to provide consistent, high-quality service. This can be accomplished through relocation programs that provide the employee with access to vetted suppliers with a strong obligation to make each move successful.

Relocation program platforms, such as CoPilot™ by NuCompass, allow the employer to deposit funds into the employee’s CoPilot "wallet.” The employee then uses those funds to hire suppliers, such as household goods movers or temporary lodging providers, through the technology platform who are pre-approved and managed by NuCompass. If something goes wrong or the employee has questions, they have access to a CoPilot Coordinator who can step in to answer questions and make sure that things are taken care of. The providers are paid through CoPilot only after the employee approves the expenditure. In addition, any unused funds can either be retained by the employer or provided to the employee as a bonus for a “move well done” and within budget.

If you want to ensure maximum flexibility in a move, keep things simple, and ensure that the move goes as smoothly as possible, programs like NuCompass CoPilot are worth considering.