Building a Global Benefits Strategy Requires a Nuanced Approach with Expert Support
Workspan Daily
September 05, 2023
Key Takeaways

  • A global benefits strategy (GBS) is a tool for companies expanding into other countries that outlines tactics for building benefits structures globally, taking into account company culture and hiring goals. 
  • A GBS is not one-size-fits-all. An understanding of regulations and compliance standards in each country is necessary when crafting global benefits plans. 
  • Hiring an expert can help. Working with a global consultant, a local expert in each relevant country, or an employer of record (EOR), are all ways to effectively implement global benefits strategies. 

When a company expands into new countries, simply duplicating existing compensation and benefits often isn’t the answer. A global benefits strategy (GBS) is a plan companies put into place outlining their benefit structures in countries around the world — helping organizations tailor their total rewards approach to wherever they do business. 

Implementing a GBS takes into account the company's overall philosophy, the needs and desires of employees in a particular country and the regulations and compliance protocols of each region. 

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“For companies hiring in more than a single country, a GBS should not be seen as a nice-to-have, but a must-have,” said Katherine Loranger, chief people officer at international talent management firm Safeguard Global. “There is no apples-to-apples comparison of different countries’ requirements for benefits plans. To remain both compliant and competitive, organizations need a GBS to understand their value and where they fit in the market.” 

A Reflection of Company Philosophy 

Creating or improving a GBS starts with an understanding of the company's culture and philosophy, said Richard Polak, senior advisor, global affairs, at American Benefits Council. 

“The benefits philosophy needs to consider the organization's culture. That's critical,” he said. “Otherwise, you just end up putting something in place nobody cares about — then what's the point of it?” 

When considering the structure of a GBS, businesses should also have a handle on the types of employees they are looking to attract. 

“If you're an employer trying to recruit top tech talent in a thriving market, that is going to define your strategy,” Loranger said. “If you just want a solid, baseline program for your people in a new market, that is a different strategy.” 

Logistics of Building a GBS 

Setting a budget is an important early step in crafting a GBS, to ensure the company is capable of maintaining the structure it sets into place. 

There is no one framework for building a GBS, as requirements are so different in each country. Hiring a global consultant with expertise in benefits and compliance around the world can be a vital tool for companies, Polak noted. Loranger also urges companies to work with local sources in a new region, who can offer expertise about the area's market, providers, regulations and cultural nuances. Partnering with an employer of record (EOR) is another option. An EOR is a local organization that handles human resources duties for the company and helps ensure compliance. 

Course: International Remuneration: An Overview of Global Rewards 

A GBS may start with an understanding of core benefits offered by the company across the board (for instance, healthcare, retirement savings, insurance protection and paid time off), before expanding to additional benefits or adjusted structures that make sense in each country or region. In a country offering public healthcare, for example, the health benefits a company offers will look different than they do in the U.S. Some countries require companies to contribute to a private pension fund, while others have labor laws entitling employees to a certain amount of paid vacation. 

Health insurance, data privacy guidelines, retirement structures, payment schedules, parental leave policies, compliance guidelines and other benefit areas vary widely from country to country. 

“Most compliance hurdles are the result of not being aware of statutory minimums in each country,” Loranger said. “Companies are at risk of scrutiny and fines from government entities if these minimums and requirements are not followed properly.” 

Another critical element: Companies should clearly communicate benefit information to employees. Having a straightforward GBS in place also helps companies respond when questions arise from employees about why benefits vary from country to country. A company's GBS should be reviewed regularly to ensure it remains compliant and continues to meet employees' needs. 

An Effective Benefits Strategy Increases Engagement 

More than 70% of executives interviewed for a global survey from Virgin Pulse said that they are seeing a return on investment stemming from a focus on employee well-being, up from 23% who said the same in 2018. 

Mental health and stress management support were listed as top health and wellness benefit priorities by organizations surveyed. They listed employee engagement and company culture as top reasons to offer these benefits. 

“The ultimate goal of all of this is engagement,” Polak said. “All employees need to have a basic benefits program. Anything above that should be designed to improve engagement. Engagement is key to productivity, increasing your top line, and ultimately increasing your profits.” 

A well-designed GBS is an important tool for a global company looking to stand out and optimize productivity. 

“When you look at the polls, the general sense is that [there is a problem with engagement]” Polak said. “So, what can you do to keep them engaged? A benefits program should be a tool to do that.” 

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: 

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