International reward: Global viewpoint needs local focus

Caroline Jowett-Ive, group vice-president reward at Travelport, tells Debbie Lovewell about the diverse challenges of providing cost-effective international benefits

Managing benefits internationally can be a challenging task, particularly in the current economic climate where organisations have to balance the need to control costs with the growing globalisation of business.

Not surprisingly, cost control is now one of the biggest issues for reward and benefits professionals with an international remit. Caroline Jowett-Ive, group vice-president reward at travel industry technology firm Travelport, where she is responsible for managing reward for staff across more than 40 countries, says: “The international benefits market has changed because in the last five years there has been a lot of global economic change. It is all about cost, ultimately. It is about providing the right benefits for employees, but it is also about controlling costs, so that is the biggest change.”

Exactly what this means for organisations’ reward packages differs slightly by region.

In the US, where Travelport has a large employee base, healthcare remains a key priority for employers. “There is a lot of healthcare reform in the US, which is quite revolutionary and that is impacting on what we have to provide,” says Jowett-Ive. “It is also an extremely costly benefit and is something that is very valued by employees – to an extent that you would never get with private healthcare in the UK, because you do not have the state provision you have with the National Health Service. So it is [achieving] a balance between offering something that is competitive but that is not completely unaffordable. Most organisations pay the lion’s share of it, with the employee then topping it up.”

Employee wellbeing

To manage employee wellbeing more proactively in the US, Travelport has begun to put a range of health and wellbeing programmes in place, including health screening for employees and dependants, smoking cessation programmes and weight management schemes.

“It is very much working with employees to promote, advocate and incentivise them to take part in these health programmes because we feel that, over time, not only will they be healthier, but that is going to help us to manage our costs better and make it more sustainable,” says Jowett-Ive. “It is about prevention rather than cure and having a healthier workforce, which will make them more engaged, more productive and will help to control retention and costs.”

Outside of the UK and US, Travelport uses a global pooling arrangement to provide healthcare benefits. But rising healthcare costs are also posing a challenge in the Middle East, where Jowett-Ive says the company is currently finding it difficult to obtain competitive rates. “I do not know the reason behind it, but there certainly seems to be a lot of healthcare inflation in that area,” she says. “We either have to think about reducing the benefits or accept the fact that it is going to be a big budget constraint for us to continue to provide them.”

Jowett-Ive adds that in some countries, where the firm has smaller employee populations, it can be difficult to source good local suppliers for benefits such as healthcare, which can make it costly to provide these for a small group of people.

Local knowledge This becomes even more of a challenge in countries or regions where employers do not have local benefits or HR professionals, so may be missing out on valuable local knowledge. Identifying local representatives or putting these in place is one of the main tips Jowett-Ive would give to reward professionals looking to move into international benefits or who have just begun working in this arena for the first time.

“For people who have a truly global benefits role, you almost need advocates or representation in each of the regions and I do not have that,” she says. “That is one of the challenges. You need to be able to have people on the ground, either an HR person or line management in those countries, in those parts of the world who can really tell you what it is like because the benchmarking data is not always that good. You really need that local knowledge and that network.

“Many organisations do not have the luxury of having benefits people in every country, they do not even have HR, but there is always going to be a senior manager covering each location. It is really just making sure they are a part of the decision-making and the data generation, and that they are leveraging local contacts. To try to manage the world out of London has its limits. Centralisation has its advantages, but there is nothing like local knowledge.”

The difficulty in obtaining robust benchmarking data is an issue Jowett-Ive feels strongly about. “Trying to understand what local market norms are outside of the [usual] countries is quite challenging,” she says. “I do not know whether people agreeing to work more together [would help]. Maybe groups of international employers need to get together and share more.”

Tailored benefits

Using local market knowledge can also help multinational organisations tailor their reward and benefits to suit each location, rather than taking a one-size-fits-all approach. “One of the things we, as an organisation, have not done deliberately is harmonise benefits across the different countries,” says Jowett- Ive. “We recognise each market is very different. I have worked with organisations in the past that have tried to almost replicate what they did in one country in another. That is where you need local knowledge, because if private medical insurance [for example] is not something that is the market norm, then [employers] need something to attract and retain local people, not have a one-size-fits-all benefits strategy that is centralised in the UK or in the US.”

But despite all the challenges the economic crisis has posed for international reward practitioners in recent years, that cloud has also had a silver lining in terms of raising both their personal profiles and that of the reward function within the organisation. This is largely due to widespread media coverage of issues such as pensions and executive remuneration, says Jowett-Ive. “It has raised the profile of reward professionals because of that higher profile in the media,” she points out. “It has given far more importance within organisations to the role, which is great.”

Looking to the future, Jowett-Ive believes legislation will have a bigger role to play in driving international benefits strategies, particularly in the larger markets.

She also feels that employers will move away from providing rich core benefits to packages that include a greater element of choice for employees, such as flexible benefits. “I think work demographics and work practices because of the ageing population will have to change and it will have to become more flexible,” she says. So, looking out across the global benefits arena, international reward practitioners are almost certain to see further change looming on the horizon.

Top tips for international benefits and reward practitioners

Caroline Jowett-Ive, group vice-president reward at Travelport, offers the following tips and advice for international benefits and reward practitioners:

  • Try to have local HR or benefits representation in each country in which your organisation operates. If this is not possible, identify suitable line or senior managers that can become involved in decision-making and data gathering in the locality in order to obtain local knowledge, as well as identify and make use of local networks or suppliers.
  • Have access, either internally or externally, to a wide range of professional skills, such as tax and legal experts.
  • Aim to have a good relationship with tax advisers.
  • Keep on top of legislation, for example by reading industry updates and bulletins, keeping up with continued professional development and having a working relationship with a specialist legal firm in each of the jurisdictions in which your organisation operates.

Career history: Caroline Jowett-Ive

2009-present group vice-president reward, Travelport
2007-2009 head of reward, Virgin Group
2004-2007 head of reward, Virgin Media
Prior to 2004 general management and HR consultant

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