With the continuing expansion of companies globally the significance of benefits programs for their international workforce is increasing. To address this, business founders, HR departments and benefit executives encounter various challenges, such as offering competitive benefits programs that cater to diverse environments and cultures, streamlining administration, and controlling costs.
Moreover, a robust global benefits strategy is crucial for retaining top talent and keeping the workforce content. Businesses must acknowledge the value of their team and position themselves as an attractive workplace by understanding the individual needs of their employees. Creating a benefits package requires meticulous planning to ensure that the employees' needs are met, irrespective of location.
This article examines the significance of a global benefits strategy, its benefits to businesses, a step-by-step guide for developing an excellent global benefits strategy.
What is a global benefits strategy?
A global benefits strategy is a tactical plan to align the employer's goals and resources with the employees' wants and needs. The goal is to provide a relevant, sustainable, cost-effective benefits program in every country worldwide. It ensures the availability of a benefits plan that attracts and retains employees and keeps them competitive.
To attain these benefits, a global strategy acknowledges the need for flexibility in accommodating government mandates and cultural requirements that may vary from country to country.
There are two options for a global benefits strategy to take:
- A case-use model that evaluates new programs at local levels based on fairness across the company globally.
- A formal 'branding' process alters the company's view of itself, from a global national company, to a genuine 'global' company.
Additionally, an overarching philosophy or set of company values can guide decision-making at local levels, such as prioritising family-owned values when choosing benefits.
Without a strategy, essential details may be overlooked, leading to missed opportunities for success. Therefore, a global benefits strategy is crucial in providing comprehensive and effective benefits programs that meet the needs of employees across different countries and cultures.
What are the benefits?
By implementing a global strategy, you can maintain consistency, control costs, and save time. This approach enables you to comply with regulations in new regions as your business expands, all while remaining competitive in recruiting new talent without the need to start from scratch.
Businesses can benefit from having a global benefits strategy in the following ways:
It gives you a hiring edge
Despite understanding the importance of benefits, only some employers make them a core part of their talent acquisition strategies. According to MetLife, while 80% of employers believe that meeting the needs of employees is an essential benefit objective, only 31% plan to offer comprehensive benefits packages to attract and retain top talent. This is because administering global employee benefits can be a tedious and time-consuming task and HR teams already have a heavy workload.
Nonetheless, delivering tailored global employee benefits packages is worth the time investment, as talent's benefits expectations differ in every country. By taking the time to understand and provide benefits that employees want in their specific location, employers can differentiate themselves from their competitors and demonstrate that they prioritise the needs of their employees.
Boosts employee retention
According to McKinsey & Company, high turnover rates are making it increasingly difficult for HR teams to retain top talent. Therefore, HR teams must keep their workforce happy and offer comprehensive benefits packages to increase employee loyalty, according to a 2022 MetLife study.
The study shows that employees who are satisfied with their benefits packages are 2x more likely to report job satisfaction and 70% more likely to remain loyal to their current employer. Additionally, employees whose holistic health needs are met are 74% more likely to be satisfied with their job and 51% more likely to stay with their current organisation for the next 12 months.
The high costs associated with finding, hiring, and training new employees make it crucial for HR teams to retain their current workforce by offering competitive salaries and benefits.
Provides a blueprint for growth
A global benefits strategy can guide your business growth if you are just starting and have a small team. By establishing a benefits plan early on, you can easily expand it as your team grows. This way, when you hire employees from different countries, you already have a structure to offer them benefits.
A global benefits plan saves you from revamping your entire benefits program as your company expands, leading to happier employees and less administrative work for you.
Increases transparency
A global benefits strategy can improve transparency by establishing clear and consistent guidelines for what benefits employees are eligible for, regardless of their location or position. When employees understand what benefits they are entitled to, confusion and misunderstandings are reduced, which usually leads to resentment and mistrust.
A global benefits strategy can create a sense of fairness and equity within the organisation by ensuring that all employees have access to the same information and benefits. This can increase employee morale, loyalty, and positive workplace culture.
Cost-effectiveness
A global benefits strategy ensures that companies offer a benefits program that aligns with the goals and resources of the employer and the wants and needs of employees in every country around the world. A comprehensive strategy can contribute to cost-effectiveness in the following ways:
- It can help companies negotiate better rates with benefit providers by leveraging the purchasing power of their entire workforce. This can result in lower costs for the same benefits compared to negotiating separately for each country or region.
- A standardised global benefits strategy can reduce administrative costs and time spent managing different benefit plans and providers in each country or region. This can result in cost savings and increase efficiency for HR teams.
- It can help companies avoid duplication of benefits or offering unnecessary benefits that employees may not value in certain countries or regions. By providing a targeted and tailored benefits package, companies can maximise the value of their benefits spending and ensure that they provide their employees with the most relevant and impactful benefits.
- It helps companies mitigate the financial risks of offering benefits by providing a more predictable and manageable cost structure. This can be especially important in regions with rapidly rising healthcare costs or regulatory changes that can impact benefit costs.
A step-by-step guide to building your employee benefits strategy
You aim to create a successful global benefits strategy that caters to your distinct workforce instead of just any ordinary one. To achieve this, consider the following tips that can be useful. Remember that companies have different approaches to creating a global benefits strategy, but the following guide can assist you in initiating the process.
1. Define your goals
To develop a global benefits strategy, define your goals and budget and identify the benefits necessary to your employees. You should also consider your business strategy, including attracting new talent, retaining employees, or expanding into new territories.
It is crucial to have a clear understanding of the objectives of your employee benefits program and to measure its success. A globally consistent user experience for employees is desired while considering local cultural differences, benefits availability, language, and currency. It is important to note that there is no one-size-fits-all benefits solution, as the importance of benefits varies across different regions.
When setting objectives, it is essential to consider what is needed to engage and motivate your employees and work backwards.
2. Plan your budget
Planning for compensation and benefits is crucial regardless of your company's HR budget size. Whether you're a large corporation or a small start-up with limited funds, it's essential to determine how much money you can allocate to employee compensation and benefits. This involves considering factors such as the projected number of employees and the potential cost of new benefits.
Benefits costs can amount to as much as 30% of an employee's compensation, depending on the company’s location. If your company does not have a benefits plan, obtaining quotes from various providers is advisable to ensure you get the best deal. Also, remember that many benefits are tax-deductible, aiding your planning process.
If you already have a benefits program, ensuring the funds are allocated towards goals that align with your company's objectives is essential. If necessary, make budget adjustments to ensure you're spending your resources effectively.
3. Analyse your current benefits program
To enhance a new global benefits strategy, companies should comprehensively analyse their current benefits program. This can be achieved by:
- Conducting an audit to understand what benefits are offered
- Benchmarking against competitors
- Evaluating compliance with local laws
- Analysing cost-effectiveness
- Identifying areas for improvement
- Reviewing employee feedback
You can obtain employee feedback in several ways, such as through employee focus groups led by HR, anonymous surveys via email, and benefits-related questions in stay and exit interviews. This feedback provides insight into the team's preferences and the gaps in the current benefits program.
Frequent check-ins are recommended to determine if the benefits are still relevant for the team, especially if an existing benefits program is in place. Companies should also track candidate offer rejection reasons during recruitment to ensure their benefits are competitive in the market.
By comprehensively analysing the current benefits program and gaining employee feedback, companies can prioritise areas for improvement in the new global benefits strategy to meet their employees' diverse needs and preferences while also being compliant, cost-effective, and easy to administer.
4. Research local laws and regulations
To ensure compliance with local laws and regulations, conducting legal research in the countries where your employees work is critical. This will assist you in understanding the mandatory benefits that must be obtained to avoid fines and penalties.
Compliance with local laws is critical for safeguarding employees' civil liberties and adhering to tax laws in various countries. As a result, before implementing a global benefits programme, it is crucial to research national and local laws.
Failure to understand these laws can result in severe penalties, affecting the company's reputation and status in the international market. It is critical for HR and benefits offices to stay current on regulations in each global location where the company operates.
5. Determine the benefits you want to offer
When planning a global benefits strategy, it is vital to consider the following factors to decide which benefits to offer:
- You should consider compliance with local laws, cultural norms, and competitor benefits.
- Understanding the demographics of your team, such as age and gender, can help determine relevant benefits for the diverse people in your organisation.
- Employee preferences should be considered, and conducting surveys or focus groups can help understand their needs and preferences.
- Offering a flexible benefits package can cater to diverse needs and preferences.
- The specifics of your business's operations should be considered, such as deskless workers appreciating benefits like scheduling autonomy and earned wage access. In contrast, remote employees will benefit from work-from-home setup budgets and access to co-working spaces.
By considering these factors, you can design a benefits package that aligns with your company's goals and meets your employees' diverse needs and preferences while also being easy to administer.
6. Choose a benefits provider
A global benefits platform is essential to handle a global benefits strategy. Otherwise, managing such a strategy could become an administrative nightmare. A global benefits platform enhances employee self-service by digitising benefit enrolments and automates benefits processing, foreign tax calculations, and other HR administrative tasks.
When selecting a global benefits provider, choose one with experience administering complex benefits programs worldwide.
7. Develop a communication strategy
Developing a comprehensive communication strategy is essential to ensure that employees are well-informed about the benefits program. This should include details about the benefits offered, enrolment procedures, and any other relevant information.
You can communicate effectively through various means, such as one-pagers, newsletters, FAQs, or a benefits platform. You should train managers to communicate this during performance reviews if the benefits package includes growth opportunities like an education budget.
You can also leverage the resources created for employees during recruitment to help potential hires understand your company's competitive benefits. Sending one-pagers or newsletters to remind candidates about the benefits package can also be helpful.
8. Implement and monitor the program
To implement a successful global benefits strategy, companies must collaborate with different departments, such as HR teams, accounting, payroll, and legal experts. Once the plan is finalised, companies must communicate it to their international teams and ensure its consistent execution in each country.
This involves setting up the infrastructure to support the plan, including international employee onboarding procedures and carrier billing setup. To achieve successful implementation, you must address communication, training, infrastructure, documentation, and audit processes. The process begins with securing buy-in from senior management and local markets and setting clear deadlines that are taken seriously.
When expanding to new geographical areas, apply the strategy while setting up new benefits and provide honest feedback on the process. Evaluating the benefits program's effectiveness through collecting employee feedback and analysing usage data can help determine its impact on employee satisfaction and retention.
9. Evaluate and adjust the program
Evaluating and adjusting a new benefits program is crucial to ensure it meets objectives and provides value to employees. You can achieve this through the following:
- Monitoring utilisation
- Collecting employee feedback
- Reviewing costs
- Conducting benchmarking analysis
- Making necessary program adjustments
Other processes you can adopt include issuing surveys, reviewing employee demographics, and evaluating brokers and advisors for a more personalised approach. These steps help companies offer the best possible benefits package that meets employees' needs and promotes job satisfaction.
Key takeaways
Having a robust employee benefits plan is crucial as it serves multiple purposes. Not only does it aid in attracting talented candidates to join your organisation, but it also promotes satisfaction among your existing team, enhances productivity, and reduces staff turnover. Your focus should be on developing a customised employee benefits program that prioritises flexibility and inclusivity and aligns with your business objectives. Adopting any of the nine recommended measures for refining your employee benefits plan can have a positive influence on your workforce's experience, and it can also set your team up for success.
Implementing an efficient employee benefits strategy can help your organisation achieve its long-term goals and provide a competitive edge as an employer.