Creating a Global Benefits Strategy

Consider, first of all, the desired outcome: an effective global benefits strategy provides a framework for benefit plan design in all countries of operation. It will help align practices with shared objectives, and centralizing structures may bring about significant efficiencies, reducing administration and cost. The global benefits strategy should be aligned to the company values, and overall direction. For example, a strongly paternalistic company may require a greater degree of consistency in benefits even if that involves additional cost. Another company may simply seek to remain competitive. Many consider benefits key to the employer brand.

Benefits offered still vary significantly by geography, even within the same industry. The global benefits strategy will determine the extent that the company’s employee benefits lead or follow the market in any given country. A wholly consistent offering will certainly result in benefits above market in some cases. Another approach may be to aim for consistent alignment with the local market, rather than offering the same benefits everywhere. A company with a strong need for talent may wish to target a higher level of benefits in order to attract and retain the right people. Other companies may be content to track the market with a minimum offering. In any case, it is important to take account of local legislative requirements, tax, and culture.

Whatever the direction, the global benefits strategy should be straightforward enough to be able to communicate clearly as part of an overall reward strategy. Finally, there should be sufficient flexibility to cover a degree of change; a global benefits strategy is for the long term.

IBN is a network of independent employee benefit consulting firms in over 70 countries around the world, providing member firms and their clients with access to international employee benefits expertise.