How can employers unify their benefits strategies internationally?

How can employers unify their benefits strategies internationally?

Need to know:

  • For global organisations, a unified benefits strategy, as opposed to numerous localised approaches, can ensure that all employees are treated and cared for equally.
  • Localised benefits packages that align to overarching principles can help create an appropriate offering that appeals to differing needs.
  • Open and honest communications can help employers explain to staff if certain benefits cannot be offered in some countries due to legal complexities.

There was a time when the term ‘multinational’ was the preserve of only the largest organisations. However, due to the digital revolution and increasingly mobile workforces, it is now arguably within the means of any employer to extend their reach across national boundaries.

Of course, managing an international employee base of any size brings with it a host of challenges and complexities, not least when it comes to benefits.

Global versus local

First, employers must decide whether to opt for a unified global benefits strategy, or take a more localised approach.

Debra Corey, group reward director at benefits provider Reward Gateway, which itself operates across Australia, Bulgaria, the UK and the US, is a firm advocate of the unified route, believing that it is expedient to have one consistent strategy, signalling to staff that their employer cares about them all in the same way.

“For example, at Reward Gateway, we believe that all employees should have the opportunity to spend quality time with their new or adopted child so, regardless of the local practice, all employees can take up to a year off, fully paid,” she explains. “This sends a strong message to our employees that ‘I care’ does not and should not have to be translated into different languages when it comes to benefit programmes.”

A unified approach also makes global movement among the workforce easier to offer and manage, whereas a disparity in the available benefits could be a disincentive.

Aligning definitions

So, is a truly unified, international strategy actually viable? The answer lies in how broadly organisations define employee benefits, argues Rick Hammell, chief executive officer at global HR software organisation Elements Global Services.

“[Employers] could define them quite narrowly, as formal structures put in place to support employee health and financial wellbeing,” he explains. “Alternatively, [they] could define them as anything and everything [the] organisation does to reward employees, meaning not just formal healthcare and wellbeing programmes, but also smaller incentives, such as free fruit and coffee, a laptop for every team member, or flexible working hours.

“If [employers] subscribe to the latter definition, it’s possible to have a greater sense of unity because many simpler incentives can be replicated, regardless of where teams are based. However, [when] talking about more structured, and often statutory, benefits programmes, country-specific requirements cannot be overlooked.”

Compromises and considerations

While a globally unified approach to benefits can create a solid structure to help support future scaling and business growth, there are also downsides which can be felt at staff level.

“A unified global benefits strategy leaves less space for choice and flexibility on the employee’s part,” Hammell explains. “Staff are very unlikely to feel exactly the same way about different benefits. They will value certain incentives over others and, depending on where they are from, may even find them culturally insensitive. The main consequence of this is poor staff morale and talent retention.”

Another disadvantage can come in the form of cost. For example, Corey notes that when Reward Gateway implemented a global parental leave benefit in May 2016, for some countries this was more generous than the norm, and therefore more expensive for the organisation to operate.

Similarly, when it comes to calculating bonus pay, there is a danger of exceeding the expectations of employees in certain locations, or offending staff in others.

Legal advice

Many organisations decide that the advantages of a unified strategy far outweigh the disadvantages; however, the problem of complying with differing regulations and legislation persists. The potential risks and financial penalties involved with non-compliance are simply too great to take lightly.

“The key is to understand these differences upfront when designing global benefits, working with local experts to understand what can and cannot be overcome,” says Corey. “From here, [employers] need to decide if the variances outweigh the similarities, and design [their] benefits accordingly.”

Communication within the workforce can also help bridge any benefits gaps between locations. If employers are open and explain why, when and where they are unable to offer a benefit, then it is still possible to show staff they are cared for consistently, even if their packages differ.

Taking a local angle

Local market practices must also be taken into account. “In the UK we legally need to opt employees into our pension scheme, in Australia we legally need to put employees into a superannuation plan and in the US, if we don’t have a competitive medical and dental plan we will not have a competitive benefits package,” Corey notes.

A potential solution is to link varying benefits back to the organisation’s core principles, producing a ‘glocalised’ offering. Using these principles as a guide, different benefits can be combined to achieve the desired overall mix, meeting local needs while also ensuring global goals are met.

This approach requires benefits technology that can offer localised integration with the leading providers in the market, says Chris Bruce, founder and managing director at Thomsons Online Benefits.

“This will allow people to access the best benefits possible, while providing a seamless user experience, no matter the location,” he notes. “It will also help to create a consistent internal brand that encourages employee loyalty, while allowing benefits directors to get a clearer picture of engagement, costs and operational consistency across markets.”

Ultimately, though, the success of a global strategy hinges on giving staff the benefits they really want. “It’s more important than ever to actually listen to employees,” says Hammell. “Gather feedback on what is and isn’t working, and always be willing to adapt to meet changing requirements.”

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