ZURICH: Point of Action
Harmonizing Global Employee Benefits
Global employee benefit plans balance two factors: the requirements of the local employer versus the objectives, costs and policies of the company worldwide. It's akin to conducting an orchestra. The program must be harmonized, balancing the orchestrations with the different sounds of the sections of the ensemble.
There are complications with any program, so it is therefore critical to understand and account for the different local requirements to have a successful, competitive program in different countries. But there are also important cross-border issues: for example, how do you handle employees that move between one country and another? Should you match or exceed the benefit levels of countries where employees are assigned? Benefits directly affect the success of efforts to recruit and retain employees throughout the world.
These questions hinge on the corporate culture. Is it a business that is centralized or decentralized? Does the company vest the home office with a culture of command and control? Or do local managements always prevail? With any global benefit program there are regulatory, tax and cost issues. What a large multi-national employer may do for its employees will probably differ from the program of medium and smaller employers. Size matters.
A program based entirely on different, individual country requirements can be a huge challenge. Truly global companies may have a footprint in as many as 100 or more countries. Salary and benefits can be critical competitive factors.
There is no single answer. Each global employee benefit plan can require extensive customization. In a time when business has become increasingly mobile, employee benefit planning can be a critical challenge and solutions will probably be very different from one company to another.
June 1, 2013
Copyright 2013© LRP Publications