Understanding your global benefit options: Part two Understanding your global benefit options: Part two

Understanding your global benefit options: Part two
12 Oct 2017

While employee benefits need to meet local market practice and legislation, there are also great opportunities to be gained from introducing consistency at the international level. The second in this two-part series explores what value can be gained by taking benefits global and provides some insights into how to get your governance and management practices right.

Most multinational organisations have some kind of underlying philosophy when it comes to benefits, which helps them in taking decisions and also makes it easier to balance global standards with local customisation. Ten years ago, this philosophy would have focussed primarily on benefit levels or costs, but now it often extends into governance and audit processes, data management, technology usage and vendor selection.

In general, there tend to be three key approaches to benefit provision. These involve:

1. Creating a minimum set of benefits globally, although local markets are allowed to decide on any additions under a strict approval process;

2. Setting a target level for provision - such as 50th percentile against market - before assisting local markets in making comparisons and undertaking change management;

3. Specifying that benefits should conform to a local talent position such as keeping turnover within a certain band. Although this tack is less common, it is gaining traction.

Approval processes

Global frameworks need to lay out typical processes in order to approve change. The introduction of new benefits or changes to benefits above a certain threshold usually needs global agreement. Local renewal of insurance such as group life may be left to the local market or region, up to certain thresholds – for example, 5% plus local inflation, or a raw increase of under 8% - and can be signed off locally.

Pensions commonly have more rigorous governance frameworks in relation to compliance, but day-today management issues tend to be delegated to local owners (or fiduciary boards in the US). But employers are increasingly reviewing the value of exercising more versus less local control and whether there are benefits to be had in introducing regional or global centres of excellence.

Historically, most administrative and technology decisions were taken locally, but these areas now offer global organisations potential to realise economies of scale and so they are often included in the approvals matrix too. Concerns over data privacy and data leaks have heightened this requirement still further.

Centralised vs global structures

Approvals processes are usually driven by how much control is desired over global, regional and local operational and strategic teams. Local teams have the advantage of being close to customers, while global functions can identify opportunities in cost and value terms that are not necessarily visible at the local country level.

Over the last 10 years, there has been a definite swing towards more centralisation. But a number of employers now consider this approach as being too restrictive and so are starting to delegate some control in order to allow for regional variation, potentially supported by global centres of excellence.

Whichever approach best fits your business, it is important to define appropriate communication channels and reporting flows between each of the three levels, that is global, regional and local.

Benefits tracking

It is very difficult to track which benefits are provided globally, and their cost, without some form of centralised management system. The traditional way of doing this has been to introduce some form of benefit plan data repository.

Such repositories can be purchased from all of the main global employee benefits consultancies, but they do differ both in terms of the breadth of plans covered - some focus solely on pensions and insurances - and the breadth of data provided. For instance, some offerings include not just benefit plans, but also summaries of state benefits and local market benchmarking.

A key activity to get right in order to ensure these repositories are sustainable into the long-term is the initial data gathering process, which can take up to six months. Ensuring the information is kept up to date as plans change and renewals are completed is equally important.

To track benefit costs, an increasingly popular trend is to deploy a benefits management portal, which provides a single online platform to enable employees around the world to choose and enrol in their local benefit plans. Graphical reporting suites within these platforms also give a good overview of country-specific costs.

Global benefit management portals

An increasing number of global organisations, particularly if they are headquartered in the US or Europe, are deploying global benefit management portals. These websites enable users to track costs, while also providing employees with a consistent user experience and enrolment process wherever they happen to be based.

They also provide a single place from which to access additional HR and enterprise resource planning information, while also enabling data privacy and security to be validated once at the global level rather than repeatedly at the country level.

A typical approach here is for employers to start rolling out their portals in countries with the highest headcount, before working their way down to smaller jurisdictions.

Cultural sensitivity

Dealing with an insurance broker in Thailand or Japan from global headquarters can create linguistic problems. But in areas such as the Middle East and Asia, issues such as decision-making styles, religion and the role of women can all influence behaviour, working styles and, ultimately, benefits provision.

In one country, it may be vital to take matters such as hierarchical status into consideration, while in others flatter management structures may be the norm. This means it is crucial to work with both local employees and regional support teams to work out the best way to get things done.

Three common pitfalls

Here are three final issues where people commonly trip up and so they are worth taking into consideration:

Commission: Lots of markets are commission-driven, which means that vendors are paid by intermediate benefit providers for providing them with business. The amounts involved can be significant, but there is potential to negotiate rates with brokers and also to pay on a fixed fee basis. In Asia and Africa, intermediaries and vendors include lots of free services as part of the commission model and so it is vital to understand the true value of the services provided.


Acquired rights: In some markets such as the Philippines, it is not easy to reduce either the nature or the value of benefits because benefits diminution is prohibited. As a result, before trying to enforce global consistency, it is important to understand the degree to which benefits can be changed locally.


Wellness: Compared to the US and Europe, other parts of the world have underdeveloped health and financial wellness sectors. The degree to which individual employees wish to share private data about their health or savings also varies considerably from country to country. As a result, caution should be exercised before stampeding in.

Marcus Underhill is director of engagement and insights at employee benefits specialist, Staffcare. Prior to joining the company, he was global head of pensions and benefits for Standard Chartered Bank based in Singapore.

While employee benefits need to meet local market practice and legislation, there are also great opportunities to be gained from introducing consistency at the international level. The second in this two-part series explores what value can be gained by taking benefits global and provides some insights into how to get your governance and management practices right.

Most multinational organisations have some kind of underlying philosophy when it comes to benefits, which helps them in taking decisions and also makes it easier to balance global standards with local customisation. Ten years ago, this philosophy would have focussed primarily on benefit levels or costs, but now it often extends into governance and audit processes, data management, technology usage and vendor selection.

In general, there tend to be three key approaches to benefit provision. These involve:

1. Creating a minimum set of benefits globally, although local markets are allowed to decide on any additions under a strict approval process;

2. Setting a target level for provision - such as 50th percentile against market - before assisting local markets in making comparisons and undertaking change management;

3. Specifying that benefits should conform to a local talent position such as keeping turnover within a certain band. Although this tack is less common, it is gaining traction.

Approval processes

Global frameworks need to lay out typical processes in order to approve change. The introduction of new benefits or changes to benefits above a certain threshold usually needs global agreement. Local renewal of insurance such as group life may be left to the local market or region, up to certain thresholds – for example, 5% plus local inflation, or a raw increase of under 8% - and can be signed off locally.

Pensions commonly have more rigorous governance frameworks in relation to compliance, but day-today management issues tend to be delegated to local owners (or fiduciary boards in the US). But employers are increasingly reviewing the value of exercising more versus less local control and whether there are benefits to be had in introducing regional or global centres of excellence.

Historically, most administrative and technology decisions were taken locally, but these areas now offer global organisations potential to realise economies of scale and so they are often included in the approvals matrix too. Concerns over data privacy and data leaks have heightened this requirement still further.

Centralised vs global structures

Approvals processes are usually driven by how much control is desired over global, regional and local operational and strategic teams. Local teams have the advantage of being close to customers, while global functions can identify opportunities in cost and value terms that are not necessarily visible at the local country level.

Over the last 10 years, there has been a definite swing towards more centralisation. But a number of employers now consider this approach as being too restrictive and so are starting to delegate some control in order to allow for regional variation, potentially supported by global centres of excellence.

Whichever approach best fits your business, it is important to define appropriate communication channels and reporting flows between each of the three levels, that is global, regional and local.

Benefits tracking

It is very difficult to track which benefits are provided globally, and their cost, without some form of centralised management system. The traditional way of doing this has been to introduce some form of benefit plan data repository.

Such repositories can be purchased from all of the main global employee benefits consultancies, but they do differ both in terms of the breadth of plans covered - some focus solely on pensions and insurances - and the breadth of data provided. For instance, some offerings include not just benefit plans, but also summaries of state benefits and local market benchmarking.

A key activity to get right in order to ensure these repositories are sustainable into the long-term is the initial data gathering process, which can take up to six months. Ensuring the information is kept up to date as plans change and renewals are completed is equally important.

To track benefit costs, an increasingly popular trend is to deploy a benefits management portal, which provides a single online platform to enable employees around the world to choose and enrol in their local benefit plans. Graphical reporting suites within these platforms also give a good overview of country-specific costs.

Global benefit management portals

An increasing number of global organisations, particularly if they are headquartered in the US or Europe, are deploying global benefit management portals. These websites enable users to track costs, while also providing employees with a consistent user experience and enrolment process wherever they happen to be based.

They also provide a single place from which to access additional HR and enterprise resource planning information, while also enabling data privacy and security to be validated once at the global level rather than repeatedly at the country level.

A typical approach here is for employers to start rolling out their portals in countries with the highest headcount, before working their way down to smaller jurisdictions.

Cultural sensitivity

Dealing with an insurance broker in Thailand or Japan from global headquarters can create linguistic problems. But in areas such as the Middle East and Asia, issues such as decision-making styles, religion and the role of women can all influence behaviour, working styles and, ultimately, benefits provision.

In one country, it may be vital to take matters such as hierarchical status into consideration, while in others flatter management structures may be the norm. This means it is crucial to work with both local employees and regional support teams to work out the best way to get things done.

Three common pitfalls

Here are three final issues where people commonly trip up and so they are worth taking into consideration:

Commission: Lots of markets are commission-driven, which means that vendors are paid by intermediate benefit providers for providing them with business. The amounts involved can be significant, but there is potential to negotiate rates with brokers and also to pay on a fixed fee basis. In Asia and Africa, intermediaries and vendors include lots of free services as part of the commission model and so it is vital to understand the true value of the services provided.


Acquired rights: In some markets such as the Philippines, it is not easy to reduce either the nature or the value of benefits because benefits diminution is prohibited. As a result, before trying to enforce global consistency, it is important to understand the degree to which benefits can be changed locally.


Wellness: Compared to the US and Europe, other parts of the world have underdeveloped health and financial wellness sectors. The degree to which individual employees wish to share private data about their health or savings also varies considerably from country to country. As a result, caution should be exercised before stampeding in.

Marcus Underhill is director of engagement and insights at employee benefits specialist, Staffcare. Prior to joining the company, he was global head of pensions and benefits for Standard Chartered Bank based in Singapore.