While the details may vary between cultures and employers, benefits packages include desirable perks that supplement monetary compensation.
But the trend of shrinking benefits is becoming common around the world as the cost of doing business grows. At the same time, employees are taking notice, putting benefits high on the list of things they consider when taking a new job. In the face of a growing labor shortage, this is putting some global employers in a tight spot—leaving some looking for a way to balance the scales.
A global strategy ensures consistency, helps control costs, and saves time. As your company continues to grow, you can meet compliance requirements in each new territory while remaining competitive at attracting new talent without reinventing the wheel.
One study of current trends in global benefits found that many multinational companies are missing this key opportunity—with no global benefits strategy currently in place. Those that do have one are leaning towards global guidance for local decisions rather than global control of local decisions.
What is a global benefits strategy (GBS)?
A global benefits strategy (GBS) is a tactical plan that aligns the needs of the employees with the goals of the employer to provide relevant, sustainable and cost-effective benefits programs in every country around the world.
But global doesn’t mean universal.
A global strategy recognizes that there will be some flexibility to accommodate government mandates and cultural requirements from one country to another. It can look like:
A case-use model that evaluates new programs at local levels based on fairness across the company at the global level. If parental leave policies are generous in one area, the company may alter leave policies globally to ensure fairness.
A formal ‘branding’ process that alters the company’s view of themselves from a national company that operates globally to a true ‘global’ company. This approach bases benefit decisions on a global need rather than a local need and is perhaps the most inclusive approach—but also prohibitive for some.
An overarching philosophy or set of company values that guide decision-making at local levels, such as prioritizing family-owned values when choosing benefits.
Benefits of having a strategy
Aside from ‘good business,’ an effective global benefits strategy that focuses on relevancy and sustainability is increasingly important to employee retention.
Forty percent of human resource managers surveyed by the Society for Human Resource Management (SHRM) acknowledged challenges in finding the right talent. It’s a problem that has been echoed in every industry and every country around the world as we continue to face a growing skills shortage.
They also agree that offering appropriate benefits differentiates companies able to attract and retain the right talent from those who struggle the most to fill open positions.
Aside from attracting and retaining talent, a global benefits strategy benefits businesses because:
A documented strategy provides transparency.
It serves as a blueprint for making benefits-related decisions as a company so that you can make smarter decisions as you grow.
It provides a framework for measuring costs.
It provides contextual background to justify future additions or changes.
Key elements of a GBS
You’re on board and ready to take your multinational company to the next level in becoming truly global. You realize that simply extending your existing benefits programs across borders doesn’t work, or you feel like you’ve completely lost control of local decisions. But where do you start?
The high-level plan looks a lot like any other big project:
Form a committee
Develop policies and guidelines
Implement your strategy
Take stock and review
1. Forming a global benefits committee
Gather input from the right perspectives by inviting members of human resources, finance, and legal at local and corporate levels to discuss global benefit needs. While including diversity from different levels within the organization makes a stronger team, you’ll need several senior managers on the committee for buy-in.
2. Identify GBS objectives
Once your team is assembled, the first course of action is to agree on a statement of objectives for your strategy. The best benefits plan design depends on what you’re hoping to achieve. Put simply, what are you planning to accomplish with your global benefits strategy?
Are you trying to get costs under control?
Or is the primary reason behind your strategy to compete for global talent?
3. Develop policies and guidelines
Next, expand on your objective with a set of detailed policies and guidelines that provide direction for making specific benefits-related decisions. Even if you have a good program in place now, employee benefits are always changing and evolving.
Your GBS will be a living document that will see many changes in the years to come. It’s your responsibility right now to define a clear baseline that your company can continue to come back to as the pieces and parts change over time.
4. Implement your strategy
A good plan is nothing if it’s never executed.
To implement a global benefits strategy, you’ll need to address communication, training, infrastructure, documentation, and audit processes to make sure it’s a success. This begins with buy-in from senior management to green-light the implementation. The green light should be followed closely by communication and buy-in from local markets to get the team on board with your changes.
There may be more challenges than you expect.
You may encounter everything from differences in communication styles to gaps in the sense of urgency a local vendor may feel to make changes. It’s important that you set clear deadlines, communicate them well — and that all parties take them seriously.
When you expand into a new geographical area, apply your strategy as you go through the process of setting up new benefits. Provide honest feedback about how well the process worked and what challenges you encountered.
The process might look like:
Obtain market data.
Learn about the local labor market.
Use your strategy to align business needs with local needs.
Look for opportunities to form partnerships.
Assess challenges of changing benefits before making commitments.
Audit final benefits selections for compliance, cost, and alignment.
5. Take stock and review your strategy
Routine audits provide the perfect opportunity to gather data on the implementation and adoption of your global strategy.
You can look at what benefits are currently offered in each market and how those decisions were made. Consider how well these benefits are serving your company and if there are any natural opportunities to partner with global or local resources.
A well-planned GBS can attract—and retain—top talent
Providing benefits that are compliant, competitive, and cost-effective on a global scale is an uphill battle. There are big differences between what is recognized as a benefit from one culture to another. And there are even bigger differences in how typical benefits are mandated in different countries.
Yet, somehow in between all of those differences, your global company has to find a balance that is equitable to all employees and sustainable for the company in the long term.
A well-planned global benefits strategy can help your company define guidance that allows local flexibility—while maintaining global cohesion. As multinational businesses become truly global, this type of strategy will be a must-have to attract and retain the talent for a top-performing global workforce.
Looking to bring more cohesion to your global company? Then don’t miss How a multicultural HR strategy can unite a global team.