Employers must juggle needs of very different workforces.
Economic growth and prosperity seem like a distant memory for most reward and benefits professionals, but less so for those with an international remit. While much of the world is still dealing with the economic downturn, international reward and benefits professionals with responsibility for growth regions are having to juggle the needs of some very different workforces.
Ian Wright, director, global compensation and benefits at software holding company the Attachmate Group, says: “Cost focus is very important to us at the moment, so we are reluctant to increase our benefits spend if we can avoid doing so.
“But we also have to recognise that in some countries, particularly in the Asia-Pacific region, the recession did not hit so hard and there is a lot of competition for talent in countries such as China and India, so we are having to spend money in those countries, not necessarily on benefits, but certainly on pay. It is challenging for us to spend enough in those areas while still working within our global budget.”
Taking a creative approach to reward in growth regions is key if employers are to retain talent with their benefits packages. “It is important with benefits that we try to do something a little bit innovative that makes us stand out from the crowd,” says Wright.
“In India, a lot of people’s pay is made up of separate allowances, such as housing and transport. We combine ours in a flexi-pay system, so the employee still gets the tax advantages of those allowances but has much more flexibility in how they can use them.”
The Attachmate Group has a central corporate benefits strategy, but its perks are managed locally by country or regional HR practitioners. “With international benefits, you can have an overarching benefits strategy and talk about the benefits provision you want to have, the process you want to go through when you are looking at reviewing benefits and have a global approach to the adviser you use,” says Wright. “But really, the actual design of the benefits then needs to be aligned with local legislation, local statutory provision and local market practice.”
Following Attachmate Group’s merger with Novell in April 2011, a key focus has been the harmonisation of benefits and consolidation of workforces in countries where both companies had operated as separate entities. The organisation is doing this on a country-by-country basis due to the complexity of the task. By the end of last year, it had completed the integration in seven of the 17 countries in which it had both Attachmate and Novell staff.
But obtaining accurate, comprehensive data across all locations has proved challenging. “When you are trying to move staff to a new benefits package, you need to understand in huge amounts of detail exactly what they are currently entitled to,” says Wright. “Sometimes that is not even in their employment contract and is not in the benefits policy.”
Despite the complexities involved, international reward professionals should view such projects as an opportunity to improve their organisation’s package, says Wright. “Rather than just moving everyone into the surviving entity’s benefits package, we have looked at what we currently offer and whether it is aligned with the market,” he explains.
“If we are giving [people from the closing entity] extra benefits because the surviving entity has better benefits, there is a risk that the people from the surviving entity will feel their colleagues are getting lots of extras and they are not getting anything, so we have been trying to sweeten the existing benefits package as well, so all employees feel happy.”
Career history: Ian Wright
2011-present director, global compensation and benefits, Attachmate Group
2008-2011 compensation and benefits director, EMEA and AsiaPac, Novell
2003-2008 EMEA compensation and benefits operations manager, SAP
1999-2002 vice-president, compensation and benefits, JP Morgan
1990-1999 senior compensation consultant, Watson Wyatt
Hot issues for international benefits managers
- The need for benefits to be relevant to the local market.
- The challenge of providing benefits in many countries where there are just a few staff and no local HR presence.
- The provision of benefits and recognition programmes when pay budgets are limited and staff turnover is high in the market.
- The need for accurate data on staff benefits entitlement and local market practices.