Tag Archives: Benefits

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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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.

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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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Developing Markets Compensation and Benefits Group on LinkedIn

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What Would You Do As A New Compensation and Benefits Manager?

Author:
Warren Heaps – Birches Group LLC

A few weeks ago on LinkedIn, Ravinder Bhan asked the following question:

“You have just joined a company with more than 15, 000 employees as a (Compensation & Benefits) manager.  What are the first three things you would do to make a lasting impact at the organization?”

As soon as I noticed this question, I was compelled to answer it.  Here is the answer I posted:

“This is truly an excellent question.  For C&B to be an effective business partner and not just another run of the mill HR function, as you state above, it requires an immersion in the business.

To that end, here are my three things:

  1. Understand the business. Talk to the business leaders, their deputies and employees. Learn what the company does. Don’t just sit in corporate and get opinions from those at HQ – go into the field and see what happens there. If it’s a manufacturer, visit a factory. Spend time with the sales force, meet some customers. And if the company is global, and you are responsible for international as well, get on a plane and follow the same steps in the key operations overseas.
  2. Take inventory. Compile information about how the company manages C&B. Hold off on judgement – instead, focus on gathering information and getting a complete picture of what are the prevailing practices. Talk to managers about what’s working and what’s not. Learn the HRIS system and do some analysis yourself. Speak with the incumbent consultants to understand their role and their perspective about the company’s practices. Find an industry group of peers and get involved, and do some benchmarking.
  3. Formulate your strategy for impact. To do this, look for opportunities to make changes that will improve efficiency and eliminate bureaucracy; programs to empower managers to manage rewards, and hold them accountable to do so; initiatives to support globalization (if applicable); develop dashboard metrics for management to measure effectiveness of C&B programs; and finally, cost-saving steps, such as multi-national pooling of insurance and strategic relationships with providers.

Of course, the above is not a one-year plan — it would take two or three years to achieve. But there would surely be a lasting impact.”

There were other answers to the question, about 15 all together.  I was flattered to be cited as the Best Answer (many of the other answers were excellent as well).  If you want to, take a look at the whole Q&A on LinkedIn. But the timing coincided with the Olympic Games, so I sort of felt this is my gold medal.  Those of you who know me, know for sure that there is no way I will ever get a real Olympic medal :-).

These days, there is so much being stated about how HR needs to “get a seat at the table” and “become an effective business partner,” I thought sharing this topic with our readers would be beneficial.  In particular, I am keen to understand what your first three things would be if you were to find yourself in the situation described above?

Would you follow the same steps that I outlined?  Why or why not?  What else would you do?  How would your actions be influenced by the culture of country where you operate?

Please tell me your thoughts by leaving a comment.  I am very anxious to read some more “Best Answers!”

More About Warren

Warren Heaps

Warren on LinkedIn

Developing Markets Compensation and Benefits Group on LinkedIn

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Three Rules for Compensation Surveys in Smaller Developing Markets

Author:
Warren Heaps – Birches Group LLC

Almost every day, I hear from a client or prospect looking for reliable market data in some small developing market, usually located in a part of the world that the big consultants have not yet discovered.  After all, our company focuses on those places!

One of the most common discussion points is about the difficulty the client is having in finding a survey which meets their needs in these markets.  You see, most clients have a very “developed world” view of what makes a good survey. But in smaller markets, you need to look at surveys through a different lens.

What Makes A Good Survey?
The exchange is typically something like this:

Client asks, “Do you have a survey for Gabon, in West Africa?”

I say, “Yes, we have a survey there, and for all of the countries in Africa.”

“Wow,” says the client, “that’s impressive.   How many bio-tech companies are in your survey?”

“Bio-tech?  None, I’m afraid.  We have a pharma company, but their office is very small.  Are there even any bio-techs in Gabon?”

“Well we are looking to open an office there, so we need to be competitive in our sector.  Do you know any other surveys I could look at?”

And so it goes.  This client, like many others, is looking for a survey in Gabon, a relatively small market, with the same parameters as they would apply in Germany.  Sector based surveys are very popular in developed countries, but in many small, developing markets, sector surveys just don’t work.

Rule #1 – Think Outside Your Sector

Why?  Simple.  The sector just isn’t big enough.  There might only be two or three similar companies, or like in our Gabon example, none at all.  To get a good sector survey together you would need at least eight to ten companies with a workforce of at least 20 to 25 staff.  But sometimes that’s not even enough.

I remember reviewing a survey once in a Central American country when I was a corporate compensation executive.  I was excited that the survey included 12 consumer goods companies (including my former employer).  We thought that with 12 companies, there would be enough data for some robust statistics.  It turns out there wasn’t.   Only 4 of the employers in the survey had a large presence in the country; the rest had small sales offices, and some had less than 10 staff in total.  Our company had staff over 150, including a regional headquarters and a factory.

So you see, a sector-based survey with 12 employers yielded good data for only a handful of positions.  My company, along with the others that had larger operations, were unable to use most of the sector data due to lack of matches.

Okay, so now you’re just looking for a survey – any survey.  Which employers make the most sense in order to get the market intelligence you need to make the right pay decisions?

Rule #2 – Look at the Leaders

Leading employers in all sectors usually have a full range of positions, from support to professional to executive.  These employers also have a strong employer brand, making them the preferred employers in the market.  The best talent naturally gravitate to these companies, as they are the ones reputed to be the best places to work.  More often than not, the leaders are multi-national companies or international organizations.

The multi-nationals are known to have disciplined approaches to reward, governed by global principles set down from headquarters.  They view compensation and benefits in a strategic way, and know the importance of using market data to determine rates of pay and benefits.

International organizations include employers such as the World Bank, various Embassies, the United Nations, the European Union, and so on.  These organizations are usually well-established in smaller developing markets, and attract the top echelon of the workforce.  Surprised?  One of the reasons is that many international organizations have very competitive pay programs which are benchmarked not only against each other, but with the private sector as well.

Together, a combination of leading private sector employers and leading international organizations captures the top of the market in many small countries.  So it’s a good place to start.

But wait a second.  You’re thinking “How will I compare my mobile telecom company to the World Bank?  They are not comparable to my company!”

Rule #3 – Use Cross-Occupational Job Matching

First of all, there are common occupations in all employers that are easily comparable.  For example, positions from accounting, finance, human resources, procurement and IT; plus secretaries, administrative assistants and less skilled support roles common in developing countries, such as drivers, security guards and messengers.

For professional and managerial positions, the real challenge is finding enough matches for a particular occupation to be able to report the data separately.  In order to ensure that there is data available for each professional level in our surveys, we often double-match positions to both a specific occupational benchmark (e.g., Brand Manager) as well as a generic professional position (e.g., Working Level Professional).  In case there are insufficient matches for Brand Manager, we can still report the aggregated data for all positions matched to Working Level Professional.  In this way, clients are assured to get a comprehensive picture of the market, even if the specific occupational matches fall short in the survey.

Is this good enough?  How many organizations use a different salary structure for each occupational group?  There are some, but not too many.   Using cross-occupational data is not really such a stretch, is it?

In Summary
There are other factors to consider when evaluating a compensation survey in small developing countries, but these three rules will help get you started.
I will write another post in the future discussing some of the other challenges. In the meantime, please share your experiences working with surveys in these countries.

More About Warren

Warren Heaps

Warren on LinkedIn

Developing Markets Compensation and Benefits Group on LinkedIn

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International HR Forum Year in Review 2009 – Best of Compensation and Benefits

This is the first of our three-part “Best of …” series, where we will feature links to our best posts on selected topics.  This part is focused on Compensation and Benefits.  Over the long holiday period between now and the new year, we will publish two more “Best of …” posts featuring articles on Expatriates and International Assignment Management, and Leadership Development and Training.

The posts below are some of the most popular ones featured on the International HR Forum.

We hope you find these summary posts to be a helpful way to explore some of the best content on our blog.

Best of Compensation & Benefits from the 2009 Archives of the International HR Forum:

Preparing Your Company for a Global Pandemic

Author:
Mariana Villa da Costa – Littler Mendelson

Over the last decades, we have seen new infectious diseases appear, some of which could kill millions of people within days: mad cow disease, bird flu, SARS, Hantavirus, Ebola, dengue fever, and most recently, spread of the H1N1 “swine” flu.  In 2009, the World Health Organization declared H1N1 a pandemic.  As of November 15, WHO reports that H1N1 is present in over 206 countries and territories globally, and over 500,000 cases have been documented.  The pandemic raises many HR issues, especially for global employers.  Why?

The workplace is an ideal place for spreading disease, from the common cold to the serious swine flu, as people are in a close daily contact, sharing printers, telephones, eating together in the office’s kitchen, and, most of the time, breathing the same, re-circulating air.  Every company strives to keep its employees healthy and safe, not only for their own benefit, but also to ensure its operations continue full force.  Let’s highlight a few of the issues companies need consider when preparing a plan to address a global pandemic:

Go global, but do not forget local!

Companies can draft a global, standard pandemic plan, but you still need to account for different laws and regulations in the specific countries or regions where you operate. So make sure your company reviews any local employment and health laws before implementing the plan, in order to avoid potential legal issues and liabilities.

What’s in the plan?

Every global pandemic plan must address at least these issues:

  • Communication – Procedures on how an employee must inform their employer of a disease and steps the company needs to take to ensure immediate safety for the sick employee and the other employees.
  • Discipline – How the company should deal with employees who refuse to go to work for fear of getting sick, and measures for abusive and unfounded absences.
  • Privacy – How the information about a sick employee or a sick family member must be managed, including required government reporting.
  • Shut Down – If a shutdown of the company facility becomes necessary because of the spread of a contagious disease, the company needs to define, according to domestic laws, how employees will be paid and alternative ways to keep the employees working.
  • Travel issues – Your plan should address issues related to employees traveling for work to risky locations.  The plan should cover the conditions when travel should be deferred or suspended. It should also address how employees traveling for personal reasons should deal with a potential contagious disease in order to protect the rest of your workforce.

Adapt, adapt and adapt!

Once you have your broad global pandemic plan, consult a local or international lawyer to draft specific provisions and re-write any conflicting ones, just like most companies do for their other global policies, such as Codes of Conduct, discrimination and harassment policies.

Tell your employees!

Communication is key.  Make employees aware of the implementation of a global plan by preparing presentations and/or training on the issues addressed by the plan. Use simple, common language to make sure employees understand the plan and are not alarmed by it.  Be sure to communicate the plan in all the common local languages in each country.  Encourage employees to take the information home and share it with their families.

Get Involved Now!

HR staff plays a key role in creating and implementing a plan to respond to a pandemic.  In addition to helping draft the plan and organizing implementation of it, Global HR must also focus on:

  • Education – Develop plans to educate employees in the prevention and spread of contagious and potential pandemic diseases in the workplace – signs, training, providing hand sanitizing, etc.
  • Partnership with the Community – Work closely with local health departments and other officials to take advantage of their resources, and secure a role for your company in community prevention efforts.
  • Awareness Make employees aware of the resources available to them for prevention and cure under the company’s health care plan or clinic, national health insurance, and other resources.
  • Policy Updates – Review and update sick leave policies to address a pandemic situation (for the employee and to take care of sick family members).

As you can see, there are many things to consider in developing a plan to address a global pandemic.  I hope this article provides you with a good start in developing a plan for your company.  Don’t forget that any global plan must be carefully prepared and reviewed by local or international counsel to avoid any liabilities for the company and risks for the employees.

Have you already developed a plan for responding to a pandemic?  Share your comments to enrich the information in this post!

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Mariana Villa da Costa

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Littler Mendelson

Update! Employer Mandated Health Coverage in Dubai

George BashawAuthor:
George Bashaw – Atlas Global Benefits

In early May, I wrote a blog on the Dubai Health Authority’s (DHA) efforts to implement employer mandatory health insurance.  Since my blog, the Director-General of the DHA has put the funding scheme on hold until 2010.

Instead of paraphrasing a nice article in the Khaleej Times, you may find it here if you would like more information on the topic.

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Multinational Pooling: Saving Money on Global Benefits, Part 1

George Bashaw

Author:
George Bashaw – Atlas Global Benefits

With pressure from the C-Suite, HR is walking a tightrope to reduce cost and provide equal or better benefits.  Multinational pooling is one option to consider for a company that has multiple international locations.  This blog is Part 1 in a series of suggestions to reduce cost without sacrificing the quality of benefits.

Multinational Pooling
Multinational pooling is a contract in which a corporation with two or more locations can spread insurance risk by joining a larger pool of insureds.  This contract is facilitated by a pooling network which has a network of providers in various countries. Pooling can be used to spread risk for a number of employee benefits including medical, life, and disability insurance.

Many pooling networks require a minimum of ten employees per country.  Therefore, pooling can be a great way for smaller companies to provide consistent benefits, reduce administration, and save money.

How Can Multinational Pooling Reduce Cost?
Since the pool consists of a large group, the risk is experience-rated instead of fully insured.  The nature of an experience-rated contract eliminates some of the administrative costs and margins of a fully insured plan.

Providing the experience is good (determined during due diligence), the premium may be less.  If the corporation decides to participate in a pool and the experience is favorable, a dividend payment is received at the end of the year.  If the experience is poor, it may be mitigated by stop loss insurance, or the balance will be carried forward and can be recovered by future dividends.

Additional Benefits of Multinational Pooling
Underwriting small groups is always challenging.  By pooling with a larger group, there are better guarantees, limits, and benefit offerings.  This allows smaller groups to meet a common objective: consistency in benefits. Additionally, the pooling arraignment will likely provide enhanced financial reporting, consistency in communications, lower acquisition costs, and reduce the burden on HR.

What Else?
Multinational pooling is not for everyone.  Due diligence with a few pooling networks can determine the pros and cons.  As this is a complex, technical area, it’s always best to work with a benefits professional with experience in this area.

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