Category Archives: International Benefits

Two Surveys Are Better Than One

Author:
Warren Heaps – Birches Group LLC

If you work in international HR, you know how important market data is for the management of your international operations.  Finding reliable data in all of your countries is undoubtedly a challenge.  Each country has different survey suppliers, different employers participating in the surveys, and variable levels of quality.  So naturally, when you find a survey you trust, the tendency is to stick with it.  But is one survey enough?  I don’t think so.

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Birches Group, Aon Hewitt, Announce Partnership

Author:
Warren Heaps – Birches Group LLC

I am delighted to announce today an exciting new partnership between Aon Hewitt and Birches Group.  Under the partnership, Aon Hewitt will make Birches Group surveys in developing country markets available to their clients, expanding their survey coverage to over 170 countries globally.

The two firms will also collaborate closely on consulting projects and promotional activities.

Here is a link to the full Press Release.

Importance of Medical Insurance in Multinational Pooling

Author:
Jacque Vilet – Vilet International

Many companies with employees located in many countries globally provide supplemental benefits in addition to those that are government mandated.   Many of these supplemental plans are insured:   life, accidental death and dismemberment (AD&D), disability, retirement, etc.   Typically, the office in each country location manages their own process of selecting insurance companies, types of coverage, comparing premiums and settling on the final contract language.   Sometimes the number of employees is very small and, therefore, the premium is high because the risk is spread over a small number of people.

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International Annual Leave Rules — Or I Want to Live in Brazil!

Author:
Jacque Vilet – Vilet International

In many parts of the world, time off from work is called annual leave or holiday, not vacation.  Whatever you call it, we can agree on a universal definition:  Annual leave refers to the period of time-off with pay which is available to employees, to pursue relaxation and recreation with their family and friends.  The amount of annual leave provided in different countries around the world varies quite a bit.  This post provides a nice summary of the legal requirements for annual leave provisions in some key countries. In order to be competitive in a specific country, a company also needs to take competitive data in mind when forming its policy.

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Employment in France – A Quick Checklist for Employers

Guest Author:
John Tinsley - Compandben.com

Editor’s Note:  This post is written by John Tinsley, Managing Director and Owner of Compandben.com, a Geneva-based HR consultancy.  John is an HR practitioner with over 25 years of experience in Europe and the Middle East.  John’s company offers assistance to employers in finding reliable local payroll partners in over 100 countries.  He also provides consulting services in areas such as labor contracts, employee handbooks, benefits, and compensation.

Employment in France has some unique requirements and challenges.  For employers establishing businesses in France for the first time, the following checklist is a handy guide of what to consider:

  1. All employees in France are notionally attached to a “Convention Collective” or Collective Agreement for their industry. The agreements are very similar but there are variations between industry in terms of vacation, social charges, and termination indemnities, so employers need to define what their business is. As an example,”Telecoms” wouldn’t be detailed enough. “Provision and implementation of routers for wide area networks” would be ok.
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Managing Pay in a Global Enterprise


Author:
Warren Heaps – Birches Group LLC

You work for a global employer with on-the-ground operations across the world. Your duties include “managing global pay.”  Where do you start?  What are some approaches to consider?   If you’ve been wondering about this, keep reading.

Back in February, I wrote a post entitled “Think Globally, Act Locally”, in which I cited the example of how salary scale designs differ across markets with different characteristics.  But salary scales are just one aspect of the broad range of issues faced when managing pay globally.One of the most important steps in effectively managing compensation across a global enterprise is to have a formal compensation policy.

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Localizing Expatriates – Trap or Solution?


Author:
Warren Heaps – Birches Group LLC

Expats are expensive. With more and more focus on the cost of international assignments, companies are looking for ways to reduce expenses. The challenge is finding the most effective way to do it.

I believe one of the alternatives companies should consider is to simply reduce the number of expats! But this is easier said than done.

Localization is one approach which can be used to achieve this goal, but it’s hard to get it right.  Let’s look at some approaches and pitfalls when considering localization.

Localization Approaches
One of the most common approaches to localization is to convert the expat to local terms and conditions, and provide a phase-down of expat allowances and benefits.  For example, the expat would receive a salary according to the host country salary scale and participate in the host country benefits.  During a transition period (usually one to three years), the employee also would get some expat benefits.  This usually includes a transition allowance which provides the full net difference for a year, reducing in equal installments to zero after three years.  In addition, companies often provide continued schooling assistance for several years.

Some of the challenges with this approach are in the areas of benefits, taxes, immigration, schooling and housing.

  • Retirement Benefits – Companies face the issues of different levels of benefits, bridging of service, and shortfalls in both the home and host social security plans. Careful attention and analysis is required to resolve these issues.
  • Health Care - Many expats have coverage under global plans. When localization occurs they switch to local coverage. How does the local plan measure up? What about pre-existing conditions? College-age dependents at home? What if the local plan is not adequate when compared to the prior coverage? Some organizations allow continued coverage under the global plan in these cases.
  • Taxes – Many companies provide tax preparation assistance to newly localized staff (but not equalization). You should also be aware of trailing tax liabilities generated by incentive pay and equity compensation.  In some cases, equalization may be appropriate.
  • Immigration – Laws must be consulted to ensure expats can remain employed legally in the host country, and family members can stay in-country. This is one of the most critical issues to address, since mistakes can result in severe consequences.  In some cases, long-term expats can get permanent residence, which may also provide opportunities for spousal employment.
  • Schooling - Assimilation and adjustment of the family is a key to a successful localization. Schooling for the kids is often the biggest challenge, especially if the host country language is different from the home, or if local schools have lower standards or different curriculum options than the international schools. Many companies provide generous support for schooling during a transition period, aiming to prevent disruption in studies, especially for older students. Consulting with educational specialists, such as School Choice International, can be a very effective way to assist employees in making the best choices.
  • Housing -This is the other major element of the expat package that dramatically impacts the expat and family, and can be quite contentious.  Expat housing standards are often much more generous than local standards, and are located in the most desirable and expensive neighborhoods.  Localized expats may not be able to afford housing in the same locations.  Companies can provide limited assistance for a local move, as well as a shipment of goods from home. Assistance with buying a home is another benefit to consider.

Saving on Expat Costs
Localization generates savings for the company when the cost of local salary and benefits is less than the expat package. When calculating the savings, don’t forget to consider the cost of transition benefits (including any tax gross-ups). You may find the savings to be elusive for the first few years.

Useful Tools
One excellent tool to help employers calculate localization costs is the Permanent Transfer Calculator from Airinc. This tool calculates the net differences for all of the key package elements and illustrates the level of transition benefits needed. It is a very useful tool which enables companies to make informed decisions when localizing staff.

Other Considerations
The most common localization options are usually applied in host locations such as the US and Western Europe.  It is usually easier to localize staff in higher wage locations, and in developed countries.  Some companies localize staff in lower-wage locatio ns in the developing world, but these cases can be very challenging and demotivating for staff.  In addition, family assimilation can be much more difficult.

Companies sometimes localize staff only to re-expatriate them a few years later. This is generally a bad practice and causes a lot of confusion, especially for retirement benefits.  Instead, look at your career and succession planning and evaluate the chances of another expat assignment in the future. It may be more practical to consider reduced allowances instead of full localization in these situations.

Finally, always consult with your legal counsel when changing terms and conditions for expats. In many countries, laws limit the ability to reduce compensation.

Summary
Localization can be a useful technique to save money and reduce expat costs. Careful analysis and planning is required to make it work, and attention to family transitions is essential for success.

Five Secrets to Reduce Benefits Cost, Part 5


Author:
George Bashaw – Atlas Global Benefits

It is time to unlock the power of hidden benefits.  Each year when preparing to communicate new benefits changes, we tend to get bogged down in the delivery of rising medical costs and medical benefit changes. Understandably, medical hits the company’s bottom line and the employee’s wallet the hardest. This singular focus on medical benefits causes us to neglect the communication of other valuable benefits that may directly or indirectly save money for the company and your employees.  Prior posts in this series include Enrollment and Billing Audit, Dependent Eligibility Audit, Know Your Claims and Duplication of Coverage.

Secret Five:  Hidden Benefits
Hidden benefits are services and benefits that your employees may not fully understand or have no knowledge they exist.  They could be stand alone plans or riders on policies. Either way, they have a purpose and can be very useful.

They key is identify your hidden benefits and communicate them properly. Here is a list of  typical hidden benefits and some additional information about them:

  • International EAP
  • Preferred networks
  • Short term disability
  • Disease management
  • RX discounts
  • Medical evacuation and repatriation

The importance of an international EAP plan could merit several blog pieces on its own.  The obvious benefits of EAP are credit, substance, marital, emotional counseling, and the list continues.  Take anyone one of these common issues and multiply the stress of being a thousand miles from home and your support group and you have a serious problem.  A problem that needs to be addressed by someone who can support the cultural issues, language barriers, and the exponential stress associated of being abroad.  Not utilizing a good EAP plan can create loss of productivity and maybe the loss of your expat.

Some international medical plans come with EAP riders and other useful riders like medical evacuation and repatriation. You have to determine if the rider is adequate for your needs compared to a standalone plan.  Either way, it is important employees understand their benefits and how they can utilize them.

Communication
Make sure you take the time to communicate all your benefits each year and not just the changes. Ensure that everyone has a summary of the plan in an easy to follow handbook that can be accessed via the internet.  Additionally, you should issue new cards each year for wallets and purses.

My final recommendation on communication is bit outside the box but I have seen very positive results with my clients.  I recommend you consider inviting spouses to the meetings or at least include them in the communication.  In every home, you have a quarterback on issues like benefits and half the time it is the spouse.  Effectively communication with the spouse may pay off in the long run.

Good luck unlocking the power of your hidden benefits. I would love to hear your thoughts on this issue.

More about George:

Five Secrets to Reduce Benefits Cost, Part 4


Author:

George Bashaw – Atlas Global Benefits

Need to find some savings without cutting something?  Pull out your bills and perform an enrollment audit.  This blog is part four in a series of simple ways to save money without altering your current benefit design or carrier. Prior posts in this series include Dependent Eligibility Audit, Know Your Claims and Duplication of Coverage.

Secret Four –  Enrollment and Billing Audit

I know it’s not very sexy but a sharp eye can find a few bucks with four simple steps.

Step One: Active Employees

Make sure only active employees are on the bill. When an employee leaves make sure they are immediately removed from your plan.  If they wish to continue coverage, make sure they are enrolled in COBRA (if applicable).

Step Two: Enrollment Errors

Verify that each person is enrolled in the plan they selected during enrollment and the carrier is billing you correctly.  Some plans have more than one medical choice and many plans have various levels of life insurance options where mistakes are easily made.

Step Three: Billing Errors

Once you have determined that everyone is enrolled correctly, make sure you are correctly being charged for every selection.  Despite all you hard efforts to renegotiate your insurance rates, you may find out the changes did not make it to the carrier’s billing system, or they were entered incorrectly.

Step Four: International Employees

You may be getting billed for employees who are not covered for thier specific region. It is important that you understand the contractual provisions of all your plans.  If you are covering local employees on an international plan, make sure the carrier is aware of their locations and they are included in the plan. I have seen many plans (EAP, long term disability, medical, life, and most importantly war risk) that have country specific coverage exclusions.

I hope you four-step your way into some savings.  Please share your thoughts.

More about George:

NFTC International HR Conference Report-Part 1


Author:
Warren Heaps – Birches Group LLC

A few weeks ago, I had the pleasure to attend the Houston International HR Conference sponsored by the National Foreign Trade Council (NFTC).  The conference was well-attended; over 150 delegates, both corporate staffers and suppliers were there.  My colleague and contributing editor, Alan Freeman, was also there.  We would like to share some of the highlights from the conference proceedings.  We hope this will allow our readers to benefit from the learnings of the conference, even if you were not there personally. This is the first installment of our report.

Global Wellness
One of the most interesting and innovative topics at the conference was Global Wellness.  Two companies, Chevron and Intel, presented their experiences with the development and implementation of wellness programs in the US and in various global markets.  While each company took a slightly different approach, there were many similarities in their experience.

Chevron’s Experience
Chevron is one of the world’s largest integrated oil companies, with operations in over 100 countries.  The company identified cardio-vascular health as a primary risk factor in their population and decided to focus on health awareness and improvement programs to address this risk.  Chevron began their program with pilot tests in the US, Nigeria, Angola and Thailand, among others.

The wellness program consists of a health assessment conducted by a third-party, measuring basic health statistics such as blood pressure, cholesterol levels, body fat index, and similar risk factors.  Employees are then provided with coaching on lifestyle and behavioral changes they can adopt to reduce their risk for cardio-vascular disease.  Some of the changes are typically smoking cessation, exercise, weight reduction, stress reduction, sleep and healthier food choices in their diet.  In addition, the company worked with it’s vendors in the the target countries to introduce heart-healthy options in their food service programs, introducing both new menu choices and some items with substitute ingredients or modified recipes, such as reduced sodium content.

The program has been a strong success, and is now being rolled out in additional countries.  There were many learnings from the pilot experience, but here are a few that I thought were particularly powerful:

  • Cardio-vascular disease is often thought of as an illness that strikes mainly in developed countries.  This was, in fact, the initial reaction in Nigeria.  In fact, however, the World Health Organization reports that 82% of deaths from cardio-vascular disease are in low- and moderate- income countries, and affect men and women equally.  Chevron’s employee demographics, which include large numbers of men in their 50’s, are a primary risk group.
  • The counseling sessions which followed the health assessment needed to be tailored to local conditions and culture.  Suggestions for changes to diet, for example, had to be adapted to reference the typical food choices available in country.
  • The communications to staff were adapted to the individual market.  While there was a consistent message, the images and illustrations were chosen to reflect the population of the particular country, so employees.
  • There were measurable results that indicate the program is helping to reduce risk for cardio-vascular diseases amongst the participants.  As the program continues, Chevron will develop statistics to demonstrate specific financial and other impacts; but in the US, there is already strong evidence among a group of staff who have consistently participated in the program since it’s inception that it’s working.

The Intel Experience
Intel Corporation is the world’s largest manufacturer of semi-conductors. They rolled out a wellness program in the US and several overseas markets, including Malaysia, Israel, Costa Rica and China. Initially, Intel staff examined several years of health surveillance data to confirm that staff were properly protected from the chemical processes used in the semi-conductor fabrication process. The study indicated there was no effect from the work environment, and that rather, lifestyle behaviors were the larger risk areas for Intel employees.

Some stress-reduction programs were introduced, but it wasn’t until Intel CEO Andy Grove had a medical event that the focus on wellness was renewed and elevated in the company. Building on a substantial array of existing services, such as occupational medicine, on-site clinics and various online resources, Intel began to introduce a more dynamic program to help improve employee wellness.

The Intel program is a 3-Step Wellness Check, including a Biometric Health Check, a Health Risk Assessment, and Wellness Coaching. The Coaching is provided face to face in most major locations.   In China, the coaching is provided in person by prominent local physicians.   Follow-ups are also integrated with the local EAP. These design changes were made based on the recommendation of the local committee responsible for implementation of the wellness initiative in China. It has proven to be very effective, and Intel plans to continue rolling out the program to additional locations over the next few years.

Observations
I was quite impressed by the efforts of these two prominent global companies in the area of employee wellness.  In both cases, the companies have a long-established focus on employee safety; the wellness initiatives are consistent with this focus and enhances this commitment.

What is especially impressive is the success in introducing the program not only in the United States, but also in overseas markets, mainly in the developing world.  While it’s still too early to draw any major conclusions about the long-term impact of these programs on company health care costs, other related items such as absenteeism, and overall impact in the community, the preliminary data indicates positive impact for the companies, their employees and the community.

What Are You Doing to Promote Employee Wellness?
Global Employee Wellness is a new area of focus for companies, and there is a lot still to be learned.  What is your company doing in the area? Please share your comments and experiences with us!

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