Designing employee benefits across borders is no easy task. From clashing healthcare systems to culture-specific perks and rising compliance risks, global employers are learning that “one-size-fits-all” rarely fits at all, writes Michelle Stevens.
For international employers with a workforce spread across different countries, balancing local employee benefits with a global strategy can be a significant challenge for business leaders and their HR teams.
Navigating local legislation, taking into account different cultural expectations and ensuring employee equity are all factors that make devising and implementing global employee benefits strategies such a complex undertaking.
Multinational challenges
“A common strategic and global benefits governance goal among multinational employers is to achieve consistency and fairness in employee benefits provision,” says Riaan van Wyk, senior consultant, platform and benefits at Barnett Waddingham. “However, this presents an enduring challenge due to country-specific differences impacting the implementation and employee experience of benefits.
“An obvious example is how private healthcare is perceived in different parts of the world,” he notes. “This may form part of a global strategy to offer equal benefits across borders, but in practice might offer significantly less value to employees in countries with nationalised healthcare.”
And it’s not only healthcare provision where difficulties can arise, with some benefits being far easier to standardise on a global scale than others.
“Global EAPs, digital wellbeing tools and some types of financial education platforms are relatively easy to scale due to their virtual delivery and broad appeal,” explains Dave Finlay, head of reward and benefits at international law firm Fieldfisher.
“On the other hand, pensions, health insurance and life assurance are much harder to standardise due to regional regulations and market maturity. There’s often a practical limit where ‘core’ global benefits are provided universally, while others need to be tailored locally to remain compliant and meaningful.”
Auto-enrolment done differently
Companies seeking to roll out new employee benefits to their workers in different countries – however well intentioned – also need to ensure they are compliant with local laws.
“Each country has their own specific requirements and a clear governance framework is key to ensuring compliance,” says Ian Andrews, the founder of PBW Consulting. “The specifics will depend on the benefit in question – for example, we are seeing pensions auto-enrolment spreading across more countries and each does it slightly differently, so local compliance is key. Life assurance is also a taxable benefit in some countries, so well-meaning global employers could cause unintended tax issues for employees through their wellbeing benefits programmes.”
Only 35 percent of employers with overseas employees are currently benchmarking their benefits to ensure they comply with local legislation, according to recent research from Towergate Employee Benefits. This suggests a significant proportion of multinational companies could be leaving themselves open to falling foul of local regulations.
“One area where employers need to ensure they take appropriate advice is in relation to cross-border stock and stock incentive offers,” highlights Elizabeth Graves, a partner in the employment, labour and pensions team at Eversheds Sutherland.
“Programmes such as these can involve regulated offers of securities and may require, for example, a registration statement to be filed or a prospectus to be published. Employers who do not comply with the necessary requirements run the risk of serious penalties and even the commission of a criminal offence.”
Graves adds that one area of regulation that is often overlooked when providing benefits across different territories is data privacy.
“Sharing sensitive employee data across borders for the purpose of managing benefits will often trigger enhanced data privacy requirements, with significant fines and criminal penalties for non-compliance,” she warns.
The rise of technology
Further complicating matters is the growth of remote working, a trend accelerated by the pandemic and made possible through the huge leaps forward in technology.
“The rise of remote and flexible working has had a major impact on both employee expectations and how organisations design and implement global employee benefits,” states van Wyk.
“An organisation’s flexible or hybrid working policy on its own is often a deal-breaker or maker for potential candidates considering a role with that employer. This means a shift in focus when employers design their benefits, for the first time having to think about their employees working mostly remotely, more at arms-length and outside of the traditional workplace community,” he says.
The same technological advances that have enabled the shift to remote working can also be used by employers when analysing information and designing their employee benefit offerings.
Nearly half (46 percent) of multinational employers plan to increase their use of AI to enhance their benefits management and benefits strategies, according to the findings of a survey carried out by Towers Watson earlier this year. And just over half (52 percent) of the companies canvassed consider the use of data-driven insights a high or top priority for enhancing the employee benefits experience.
Benefits professionals are increasingly looking to digital tools to help them manage the complexities of global benefits, says Finlay.
“Technology platforms are essential, especially those that centralise benefits administration, integrate with local providers and offer employees a clear, accessible view of what’s available to them,” he points out. “Tools that support benchmarking, cost modelling and employee feedback also help HR teams shape more strategic and responsive benefits offerings.”
Global nuances
There are instances where large multinational employers may have to consider consistently “topping up” their offerings in certain countries where they are likely to have a significant employee presence, says van Wyk.
“Some well-known examples include regions affected by poor public healthcare such as the United States, India or South Africa, where private medical insurance is essential; or where housing and education are particularly expensive, such as the UAE and some far-Eastern countries,” he notes.
Graves agrees that the Middle East is a region with specific characteristics regarding employee benefits, especially in countries like the UAE, Saudi Arabia and Qatar, where a significant proportion of the workforce consists of expatriates.
“Due to the temporary nature of many expatriate assignments and the limited availability of public services for non-citizens, employers often provide extensive benefits and relocation packages beyond their standard offerings provided in other operating locations,” she explains.
“These typically include relocation assistance, visa services, housing allowances and schooling support. In addition to these initial benefits aimed at attracting and retaining international talent, employers are also required to provide certain mandatory benefits upon employment termination. These vary by country but frequently include end-of-service awards, compensation for unused annual leave and repatriation costs.”
With legal requirements and societal expectations necessitating different employee benefits for different counties, employers need to carefully tailor their strategies.
Andrews says: “Many companies and HR leaders think of ‘global standardisation’ as providing the same benefits to all employees but this is impractical and, in many cases, unnecessary. For example, many global companies spend more on healthcare cover in the United States than they do on the rest of their global benefits combined, because the delivery model there is entirely privatised compared to many European countries that have some level of state cover like our NHS.
“The key to real global standardisation comes back to the strategy, which needs to support the business objectives. For example, does the business want to be consistently at the top or middle of the market with benefits? Then you can bring in appropriate local programmes to deliver in line with the global standardised strategy.”
Finlay adds that at Fieldfisher, the company tackled the complexity of global wellbeing by launching its ‘Wellbeing Together’ campaign, a year-long initiative rolled out across all of its 23 offices in 12 countries.
“The programme combined universal themes – movement, community and self – with local flexibility,” he explains. “We engaged colleagues through global webinars, firm-wide walking challenges and local activities like marathon relays, gallery visits, kindness campaigns and even basil-growing competitions. We also introduced new benefits like the ‘Maven’ family health app in the UK and the ‘Changers’ platform in Germany.
“By blending virtual tools with in-person events, and adapting to regional needs, we created a shared sense of purpose while respecting local cultures. The campaign not only strengthened global connection but also embedded wellbeing more deeply into daily working life.”
