Giving your employees a lump sum of money to move on their own may seem easy for you and exciting to your employees. But it can actually be harder on your employees and more costly for your company.

Relocation is stressful and distracting. The 2013 Workplace Productivity Report indicates that phone calls, emails, messaging, etc. account for 65% of employee distractions in an average workday. They estimate that everyday distractions resulted in an average productivity loss of almost 2.5 days per month. Add a relocation and you can expect to double or triple that loss.

Imagine yourself reporting to the new location and trying to help your family back home. You're not there to help with the day-to-day responsibilities of the family and now they're also burdened with packing up and selling the house. You do what you can. You make phone calls, search the internet for movers and Realtors. You send and respond to numerous emails, texts and calls in a futile attempt to support your family's move from afar. But where does most of the coordinating efforts occur? At work. 

Many of your employees face this exact same scenario at the expense of your company.

Giving employees money to manage their relocation on their own can increase their stress and distraction by requiring them to manage the minutiae of the move. It negatively impacts their productivity and engagement.

What happens when the employee does not time their move right and they need additional assistance? What happens when the employee doesn't find good providers and gets less than adequate service? The end result may lead to delays, additional claims and costs, work distraction, family stress, and more.

As an employer, you may like the fact that everyone is monetarily treated equally with a lump sum. While that's a nice gesture in theory, often the lump sum is too much for some employees and not enough for others. Each employee has unique circumstances that will impact the cost of their relocation.  Whether your employee is single, has a family, is buying, selling, or renting, the distance of the relocation, elder care and other special needs will all factor into the cost. Sometimes the lump sum doesn't even cover the cost of shipping the employee's household goods, let alone take into the account the other relocation necessities.

If you still think a lump sum is a good idea, will you tax protect it? Or, will the allowance you discussed actually be drastically reduced by the taxes withheld? If you tax protect the entire amount, you may be paying additional, unnecessary taxes on excludable items (e.g. the shipment of household goods).

If the foundation of your company's culture is built around the value you place on your employees, then letting them relocate on their own can send the wrong message. Find out how little it costs, along with how quickly and productively your employee can move with a little help from a professional relocation management firm.