Need to know:
- Benefits providers are able to offer a scheme in multiple global locations, but the benefits will differ from country to country.
- Organisations should look to have a global strategy but a local approach to offering voluntary benefits.
- While a specific benefit agenda can be promoted, such as healthcare, the actual products available will differ from country to country.
Voluntary benefits are a key tool to aid employee engagement and offer staff the opportunity to tailor choices around the benefits they receive. But, can employers implement a single global voluntary benefits scheme for staff in all global locations?
Matthew Gregson, senior vice-president, data and analytics, at Thomsons Online Benefits, says: “If [an organisation wants] to be a global employer [and] to demonstrate that no matter where [an employee is] in the world, [they] get the same value from an employer, then [an organisation has] to consider it.”
Around the world
The voluntary benefits market in the UK is well established, however, this cannot be said for all global locations. Different countries offer aspects of voluntary benefits on a local basis, for example, in the majority of locations, voluntary benefits will mean discount vouchers, especially in countries such as Germany, Australia and the US. However, even here there are differences. Australia, for example, has a slightly different focus for its discount vouchers, says Debra Corey, group reward director at Reward Gateway. Here, discounts on sporting events and concerts are popular in addition to the retail vouchers that are typical in the UK market, she explains.
Currently, voluntary benefits schemes are typically implemented in more countries at a local level, rather than as the product of one global strategy delivered by a sole provider. However, some voluntary benefits providers are able to offer the same scheme with their own technology in different locations around the world; but the content, discounts, offers and functionality will differ by market.
Country norms could have an effect on voluntary benefits. What is a valued benefit in one country could prove to be irrelevant in another, so offering a like-for-like product may not hold the same appeal for some employees. Carl Redondo, leader of global benefits at Aon, says: “For instance, [in Asia, one] will see a lot of things such as rice subsidies and other shopping vouchers that just wouldn’t have applicability in other parts of the world. Equally, [there are] some markets where a gym or wellness benefit is normal and standard, whereas in other parts of the world that just wouldn’t be the case.”
Because the same tax advantages are not available in each country, the range of benefits will have to differ; a benefit will not hold the same appeal from country to country without the same tax break.
The UK, for example, is the only country to offer bikes-for-work schemes within voluntary benefits plans, because it is the only country to offer this initiative on a tax-efficient basis. On the whole, any product would still have to have a localised element, due to differing tax regimes in each country.
Corey says: “I consider voluntary benefits [to be] giving employees access to benefits that are either discounted or done in a tax-effective way, and because of that, that makes it very localised.”
The complex nature of multi-national organisations can also make voluntary benefits challenging to implement on a global scale, especially if an organisation does not have a centralised reward and benefits system to help manage the process, says Nigel Bateman, senior global benefits consultant at Willis Towers Watson. Although managing numerous local suppliers can be admin-heavy for HR and benefits staff, rolling out voluntary benefits globally may get bumped down the priority list in favour of more cost-effective measures, such as multi-national pooling, which has a more visible financial gain.
As a starting point, employers could implement global payroll and HR systems, which will help to produce a single data reference for a voluntary benefits platform, says Thomsons Online Benefits’ Gregson.
Finding the way forward
Taking a local approach to voluntary benefits can have a global flavour: employers decide on core benefits or areas of focus that they wish to make available to staff in all operating countries, although the local products themselves will differ depending on the location. An example of this would be an organisation deciding that it wanted staff in all locations to have access to good-quality healthcare on a voluntary basis, however, specifics of this health product would vary between locations depending on what is available locally.
“[An employer] might have some core items, may have a look and feel of the system that is globally consistent, but in each market [it] may also have some local programmes, which are tied to the local regulatory environment,” says Aon’s Redondo.
Technology as an enabler
A single global online platform is the most viable option for offering voluntary benefits on a global scale; although the offers and discounts will vary from country to country. For example, Reward Gateway offers its voluntary discount platform in the UK, US and Australia, and while the core technology is the same, the discounts vary according to the local territory. The development of online apps and platforms from providers helps to facilitate access to voluntary benefits through smartphones and tablets.
Offering voluntary benefits as part of a global reward strategy is still five years away from becoming more commonly widespread, according to Bateman. But, although the nuances between countries will impact on the exact product being offered, there are providers in the market that are reaching multiple global locations.
Viewpoint: Global benefits can achieve employee parity but local jurisdiction must be considered
It is legally possible for an employer to provide a global benefits package, and many employers decide to do so because it is administratively more efficient than offering local variations and, crucially for a global workforce, ensures parity of treatment across the organisation.
A global package is attractive for employers with a mobile workforce because it saves having to offer new rewards or amend existing benefit packages each time the employee is assigned to a new location. It is important, however, that the benefits offered meet any local minimum statutory or regulatory requirements, and are adapted as necessary to ensure they are compliant. Furthermore, an employer considering a global package needs to ensure that benefits offered via any third-party providers apply equally in all relevant jurisdictions, for example, medical benefits and insurance policies sometimes contain exclusions for certain countries.
Another important consideration is data protection and the ability to transfer employee data to a central team and/or third party which may be administering the global benefits. There are likely to be local restrictions on the ability to transfer data that need to be checked and complied with and, in some cases, express employee consent will be required.
The ability and ease with which new benefits can be implemented and existing benefits revised or withdrawn should also be reviewed. In some countries, this will be harder than others and consultation with works councils and/or other employee bodies may be required. In some countries, consent to make changes will be needed.
Finally, an employer will want to ensure that the cost of offering any benefit in any particular jurisdiction is economic, from a tax as well as cost perspective, both for the employer and the employee. There is little point in providing a benefit if the burden of doing so outweighs the benefit provided.
Sarah Henchoz is partner in the employment team, and Paul McCarthy is partner in corporate incentives at law firm Allen and Overy