Our Global Benefits Just Happened
Thoughts on Creating an Integrated Global Benefits Program
Crafting an Effective International Benefits Strategy
Effective, long term international benefits programs are carefully conceived and nurtured .. they don’t just happen. The best programs evolve from a careful and sequential effort, usually employing at least the following broad steps.
An often overlooked step in the program design process is carefully and honestly developing a definition of how the global employee benefits program reflects and supports who we are as a company. An unfortunate process outline of global employee benefits follows a model which is roughly
A more constructive approach is generally
Auditing and Designing the Global Benefits Strategy
Seasoned international benefits professionals know that the global benefits program will be tested by foreign country employees and managements against “what is always done” in the particular country of interest. To the extent that the corporate program is solidly reasoned and consciously crafted to meet company goals, it will meet these challenges and tests.
To the extent that the program is (a) a more or less knee jerk replication of the US boilerplate or (b) a jumble of local country programs implemented on an ad hoc basis, it will be a subject of rather endless discussion and explanation.
If our “who we are” analysis produced a definition of medical coverage that is roughly
this is a broad philosophy which is exportable to every country in the world, whether or not that country has a national health plan. It becomes a basic underpinning of the global benefit program. Similar global statements of dental cover, vacation, pensions, and the complete range of benefit offerings are made, completing our global benefits strategic statements.
Once we have set our Global Benefits strategy through a series of succinct statements by benefit area, the global benefit “template” rolls naturally out of these statements.
The benefits design is preceded by the important caveat
As an example, in Australia several decades ago few employees had an employer provided supplemental health plan. The Australian national program is quite good and supplemental plans were considered unnecessary. Enter US multinational employers. Following a reasoning that (a) US employees had company purchased health plans, and (b) supplemental plans would provide a competitive edge, many employers proceeded to secure and offer supplemental plans on a routine basis. Australian employees were delighted, but the upshot is that today such supplemental plans have become a virtual competitive necessity.
Using our medical benefits example, this element becomes
In like manner, a full set of elements are designed.
Establishing the International Benefit Process
Without establishing an unmanageable bureaucracy, it is important for the global benefits professional to establish in advance the criteria and methods under which local country benefits will be solicited, evaluated and implemented. An eye to future growth of the company is important in this regard.
For example it is not uncommon that an emerging company begins to select and place national employee benefits with local country insurers in a rather ad hoc manner. Over time the company is successful and grows until someone notices that foreign benefit plans have become substantial, and should be evaluated under multinational risk pool scenarios. What quickly emerges is that many of the local country insurers are not pool participants, and although conceptually pooling may give great economic advantage, as a practical matter it would require a virtual complete replacement of the global benefit program to achieve it.
At a minimum the process outline should include
As new country operations are established (or current country operations face renewal of programs) the global process is applied. Using a simple example of health benefits in Singapore, the employer may have established a global model of health benefits that is roughly
Evaluation of the Singapore environment will reveal
The key point
of the process is that anticipated and expected values are compared against
local norms, with variances being carefully considered and affirmatively
decided by the company.
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