Capgemini centralises costs with multinational pooling

capgemini

Capgemini, which operates in 44 countries around the world, reduced spend on insurance-based employee benefits, such as medical insurance, critical illness insurance and travel accident insurance, by using multinational pooling to combine numerous local contracts into one international set-up.

The project, which started at the end of 2013 as the consulting, technology and outsourcing organisation’s first global HR initiative, looked to be smarter around global financing, changing a de-centralised and fragmented benefits structure into a more harmonised arrangement, to further benefit the organisation’s 190,000 global employee population.

Kris Bezzant, senior vice-president and global head of reward at Capgemini, says: “To buy insurance in a highly fragmented way with each little business unit or legal entity doing their own thing, is not the most financially efficient way of approaching the topic. If [an employer] can take [its] package of insurance to the market in a very connected and co-ordinated way, [it] could drive down costs and that’s what the project [was] all about.”

Bezzant, who acted as one of the leads on the project alongside partner firm Aon Hewitt, began the initiative by conducting an audit to assess the current benchmarks of benefits costs and coverage across the organisation. The audit covered 21 of the organisation’s 44 operating countries, equating to 96% of the employee population.

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Once coverage levels and costing had been confirmed, the organisation looked to use multinational pooling as a financial savings mechanism, balancing the risks of the individual insurance contracts by consolidating them together into one pooling network.

Bezzant says: “If [organisations] can drive cost savings, just by acting smarter and those cost savings don’t impact employees, but can be smarter in the way that [employers] finance things, then to me, it’s a no-brainer. We’ve operated on a highly de-centralised basis and when [organisations] start managing things in a centralised way, [it] can be much more cost-efficient.”