Change is constant, particularly in the realm of international employee benefits. There is a social time bomb ticking – the number of employees paying into various social security systems around the world is diminishing while the number of recipients is increasing. To defuse this situation, many governments are reducing benefits while raising taxes, thereby shifting the burden to the employer.
Today’s multinational employee is evolving into the transnational of tomorrow as corporations do away with defined headquarters and instead move to regional centers of operations. But at the same time, in response to recent global economic pressures, many multinationals have gone in the opposite direction by centralizing global human resource functions.
To meet these and other changes, benefit professionals are using many tools to allow them to more effectively and more efficiently manage their global employee benefits: blanket insurance policies covering multiple countries; use of captive insurers to manage risk and control benefit finance; multinational pooling; pan-European Pension plans; and global broker assignments to name a few.
In our experience these and similar tools are better deployed, providing more value to a company if they are part of an overall central governance policy. The policy, to which we refer, has at times been called a “Global Benefit Strategy” or GBS. We, however, prefer to use the phrase “International Benefit Strategy Policy” or IBSP, which is the term we will use for the purposes of this article. We recognize that while a GBS may be the ultimate goal for an employer—particularly for US-based employers, a first step may be an IBSP with which the US benefits strategy is gradually synced.
For this discussion, we will cover a review of the basic components and current use of an IBSP as well as share some findings from an actual case study with Teleflex Incorporated. Teleflex is a global provider of medical devices used in critical care and surgery. They serve healthcare providers with specialty devices for vascular access, general and regional anesthesia, urology, respiratory care, cardiac care and surgery. Teleflex employs approximately 11,500 people in 24 countries who provide innovative solutions to customers in more than 120 countries. To learn more, visit teleflex.com.
Many of us have already been exposed to global benefit strategy setting through prior articles, industry presentations or actual use. However, as a review and to provide background to less tenured professionals the following is a summary of what we consider to be basic elements of an IBSP:
INTERNATIONAL BENEFITS COMMITTEE
The International Benefits Committee (IBC) should consist of representatives from HR, legal, treasury/finance, risk management and, when possible, various business units. There also should be global input. Initially, the committee should meet frequently and agree upon a system of review and evaluation for the work as it progresses. Remember: the more senior the committee representation, the stronger the strategy’s influence on upper management.
The IBC should develop a written, agreed-upon statement or set of statements that defines the overall objectives of the IBSP. Some statements try to benchmark by using outside data from consultants, e.g., having benefits at or above the 50th percentile. While data may be readily available in some countries, it may not be in others. Benchmarking can be a useful measurement tool, but benefits professionals need to be aware of the need to obtain consistent criteria across countries. Key to developing this statement is building in flexibility to enable the company’s benefit strategy to be simultaneously integrated around the globe and locally responsive.
Note: this blog post is an excerpt from a white paper authored by David Bryan, VP of Global Benefits for OneDigital and Doug Carl, Corporate Benefits Director, Teleflex. To obtain the full version, please email firstname.lastname@example.org and put "oneGlobal White Paper" in the subject line.