Sally Hart: How should global employers tailor their benefits to compliment state provisions?


Even in stronger economies, the days when employees could rely on state provisions are over. Across the world, state pensions are under pressure with retirement ages increasing, or proposed to increase, in many countries. The situation for healthcare is no better; funding is tight and services are under pressure. Most governments are looking for employers to pick up the slack.

So how is a multi-national employer to address that? The first question may be how paternalistic do employers want to be? Are they looking to provide benefits aligned to common practice in a given market or do employers want to provide certain benefits consistently across countries regardless?

Because state benefits provisions vary considerably by country, and are complex and constantly changing, trying to bridge to a common global offering is almost impossible. Furthermore, although a noble proposition, a consistent package across countries would necessarily mean moving everyone to the highest cost. Most employers will take a more pragmatic approach and try to align to the local market.

Matching to the local talent market is a more cost-effective solution; many aim to pay no more and no less than other relevant employers. The first step is to identify comparator industries, or even to target against specific organisations with a similar employee profile. Benefits can vary significantly by industry, region, size, and ownership. Employers need to consider where they are hoping to attract employees from, and where their employees would go if they left.

Getting reliable local data to support these decisions will ensure the best offering and help to manage benefit costs. Done well, global benefits benchmarking will provide the solution.

Sally Hart is executive director at International Benefits Network (IBN)