What Makes Some Countries Leaders When It Comes to Workforce Benefits?

For all the value U.S. culture places on work, the country doesn’t crack the top 10 when it comes to supporting employees, according to a new report by Pebl, a global employment-enablement platform (formerly Velocity Global).

Pebl stated 10 countries currently set the standard when it comes to offering the best employee benefits:

1. Luxembourg
2. Switzerland
3. Australia
4. Sweden
5. Norway
6. Denmark
7. New Zealand
8. The Netherlands
9. Finland
10. Germany

“To stand out from the crowd, countries, companies and individuals must stand with integrity, grit and care,” said Richard Polak, a global advisor with the American Benefits Council. “Countries with a solid social underpinning support the population — and reward them — for contributing to society through the workforce. The same principle applies to companies.”

Good organizations place employees first, customers second and financial outcomes third, he said. But most employers get this backward.

“Every major employee engagement study shows that when employees feel valued and supported, profitability rises,” Polak said. “Taking care of the employee is not just compassionate, it is commercially strategic.”

‘Must-Haves’ and Choice

So, what do workers, regardless of geographic location, want in benefits?

“Comprehensive health insurance (including mental health coverage), generous paid time off and flexible work arrangements remain key,” said Steve Kapper, the head of the national health and welfare benefits practice for consulting firm Korn Ferry.

Employees also value benefits that provide employees with a choice, such as lifestyle spending accounts, he added.

“From a general standpoint, organizations that provide employees a choice of benefits offerings will optimize employee-perceived value of benefits, which is a key outcome,” Kapper said.

Polak pointed to four key benefits that are must-haves: life insurance, disability/income protection, healthcare and retirement benefits.

“Nearly every other benefit, from free snacks to ping-pong tables to gym subsidies, is ‘nice to have’ but not foundational,” he said. “Top talent evaluates whether an employer protects their health, their income and their future.”

Don’t Skimp on Leave

Paid leave policy is a huge factor in Pebl’s top-10 list. In each of the highlighted countries, workers are entitled to 20 or more paid days off per year. The U.S., meanwhile, is the only advanced economy in the world that does not guarantee its workers paid vacation days and paid holidays, and the average American worker only gets 11 days of paid vacation per year.

Parental leave also is a significant factor in the rankings. In Norway, mothers receive up to 59 weeks of paid maternity leave, and fathers are eligible for up to 19 weeks of paid paternity leave, while in Sweden, parents are entitled to 480 days of parental leave, which parents can choose to split. The U.S., however, is one of only eight countries in the world without a federal mandatory paid maternity leave policy, and mothers who do have access to leave still return to office on average within just 10 weeks.

Average workweeks and pay also carry weight in Pebl’s rankings. Germany’s average workweek is under 35 hours, and Australia’s normal workweek is capped at 38 hours. In Luxembourg, it’s customary for employees to receive an additional month’s salary, known as 13th-month pay, from their employer each December, and in the Netherlands, minimum wage for a full-time employee is $2,152 per month, nearly double that for their American counterparts.

U.S. culture, and the laws driven by it, leave the country significantly lagging in leave policies, Polak explained.

In the U.S., the social safety net is employer-based, not state-based. Legal frameworks favor employers over employees, and political gridlock makes national social policy difficult to pursue, he said. Additionally, time off is often framed as lack of ambition, and for many Americans, work is a key part of their identity, and they signal their commitment by working long hours.

“The result: Rest is undervalued and burnout is normalized,” Polak said.

Up Your Game

Benefits strategy is a key component of talent strategy — employers that don’t prioritize employee benefits may find it difficult to attract and retain key talent, Kapper said.

Benefits also are a primary driver of well-being — but diverse segments of the employee population have diverse needs. He advised total rewards professionals to utilize their surveys to measure the perceived value that various employee classes place on particular benefits.

You can’t measure what you don’t manage, so Polak recommended that TR pros:

• Audit their offerings;
• Benchmark them with statutory requirements and competitive practice in each region;
• Differentiate by adding benefits that reinforce culture, such as flexible work, mental health access, family-forming benefits or financial well-being programs; and,
• Test for engagement.

“Organizations that invest in employee well-being outperform in productivity, retention and profitability,” he said. “Benefits should help employees feel secure, supported and valued, which drives performance. Those who do not invest fall behind.”

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:

• Employee Benefits
• Workforce Engagement