Usefulness and necessity of a Global Employee Benefits Program

How to design and implement a global employee benefits program that complies with local laws and meets the needs of your employees

Employee benefits are an important part of any organization’s strategy to attract and retain talent, as well as to support the well-being and productivity of its workforce. However, designing and implementing a global employee benefits program can be challenging, especially when dealing with different legal and cultural requirements in different countries. In this article, we will discuss some of the key aspects and benefits of a global employee benefits program, as well as some of the risks and challenges that need to be addressed.

What is a global employee benefits program?

A global employee benefits program refers to one solution for all employees of an organization, regardless of the country where they perform their tasks. It aims to provide a consistent and competitive package of benefits that covers both mandatory and voluntary provisions. Mandatory provisions are based on local laws and regulations, and they must be complied with. Voluntary provisions are created by the employer on a discretionary basis, and they can vary depending on the needs and preferences of the employees.

What are the benefits of a global employee benefits program?

A global employee benefits program can offer several advantages for both the employer and the employees, such as:

• Cost savings: By pooling and spreading risks among one insurer, the employer can negotiate better rates and conditions. By streamlining processes and systems through a centralized administration, the employer can simplify the management of the programs and reduce administrative burdens.
• Compliance: A global employee benefits program ensures that the local laws and regulations in different countries are followed. This minimizes the risk of non-compliance and associated fines or legal problems.
• Attractiveness: By offering comprehensive and competitive insured arrangements, the employer can attract top talent. A robust insurance package with health insurance, life insurance, disability insurance and other relevant coverages can be an attractive proposition for potential new employees.
• Alignment: By aligning the benefits with the local market practices and expectations, the employer can enhance the satisfaction and loyalty of the employees. By offering benefits that are relevant and meaningful for the employees, the employer can support their well-being and productivity.

What are the risks and challenges of a global employee benefits program?

A global employee benefits program also involves some risks and challenges that need to be addressed, such as:

• Legal issues: It is important that international employee benefits programs are in accordance with the laws and regulations of the countries where the activities of the company take place. This includes not only understanding the local laws but also aligning the benefits with what is locally customary. Otherwise, the employer may face high fines or even criminal prosecution if the international insurance solution is in violation of the law. Such a problem often manifests itself at a claim, so at the moment when the organization is already more vulnerable.
• Local expertise: It is difficult to select the right local advisor or insurer without knowledge. It is advisable to set a budget and do some research beforehand on the feasibility of the intended goals. It is also advisable to consult a local insurance broker or legal advisor for the mandatory provisions, as they have the necessary knowledge and experience to deal with the local requirements and practices.
• Communication: It is essential to communicate clearly and effectively with the employees about the benefits and their eligibility. The employees need to understand the value and the scope of the benefits, as well as their rights and obligations. The communication should be tailored to the local language and culture, and it should be consistent and transparent across the organization.

How to work with us to design and implement a global employee benefits program

As mentioned earlier, obligations vary by country and the consequences of non-compliance can be serious. This also applies to the non-mandatory insurances. To avoid such situations, we also work closely with competent advisors who are part of our global network.

Our advice is a total approach. Central monitoring of the insurance programs with the ultimate goal of enabling you to evaluate your global risk profile holistically, resulting in risk diversification and cost reduction.

It is not easy to insure all countries through one main insurance, so there is usually a combination with co-insured policies where the main policy covers the risks in countries where that is possible with an additional policy required. In this construction, you still benefit optimally from the low costs, a fixed start date and billing cycle.

Interested?

Please contact us at global@montaepartners.nl