· 2 min read · Features

How can an emerging multinational organisation effectively manage its international employee benefits?

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After a challenging and difficult 2009, the global economy is finally showing signs of recovery. We have seen that companies of all sizes have once again taken some of their strategic initiatives off the back burner as they shift their focus from cost reduction to growth and opportunity.

Many of the best opportunities may involve foreign markets, and even companies that had traditionally kept their operations close to home may suddenly find themselves expanding internationally.

For businesses going international for the first time, the challenges of putting together a compliant, competitive and cost-effective benefits package across multiple countries can be especially complex and intimidating. Each country has a myriad employment laws, regulations, trends, customs and competitive pressures that all conspire to shape and influence the local benefits environment. As if this weren't enough, all of these factors are subject to change, so that managing a worldwide employee benefits programme may often feel like painting the Forth Bridge.

So what is the best way for an emerging multinational to effectively manage its international employee benefits? 

The company could go it alone and try to handle everything internally at the home office level. While not reserved only for the clinically insane, this approach does require a strong constitution, a willingness to take risks and a love of foreign languages and late nights at the office. Attractive as this may seem, most new multinationals recognise that they need expert advice and assistance in managing their worldwide benefits programme.

This may lead the company to decide to engage a global broker or consultant. While this approach may offer value to the largest multinationals, small and medium-sized multinationals could find themselves less than enthralled by the high costs. Other multinationals may have been tempted by regional brokers advertising membership in an international broker network, but could be disappointed to learn that the network offered little more than global ‘dots on the map' with no dedicated team of experts to manage and co-ordinate the client's benefits on a global scale.

HR directors should consider using a global network approach to the multinational company:

Local experts in international insurance, employee benefits and HR who have been carefully vetted to ensure they have the local expertise and services required provide a valuable comfort blanket to the company that may have coverage in many countries.

Benchmark benefits should be provided in all countries to enable the company to achieve their global strategy while taking account of the vagaries of local markets and what the employees expect.

Management information is the most important issue for multinationals, particularly the control of costs and a clear audit trail. It is essential that regular updates are given.

Communication is vital in ensuring the success of any benefits programme. It is important for overseas employees to appreciate the value of the benefits being provided. This is more important for multinationals where ‘total compensation' may be similar across the globe but there is a necessity to have a different breakdown of the salary and benefits package in each country. For example, in the US the provision of medical insurance is much higher up the list of priorities as they don't have the support like we have in the UK from the NHS.....despite Barack Obama's best efforts. 

It is important that all new employees are met on a one-to-one basis. This leads to greater appreciation of the benefits, enrolment on time and the correct completion of the paperwork first time.

Mike Smith is executive consultant at AWD Chase de Vere