Tag Archives: global benefits

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

Email Warren

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:

Creating A Global Benefits Strategy

Author:
David Bryan – Norfolk Mobility Benefits

Editor’s Note: We are pleased to welcome David Bryan as a Guest Author.  David has extensive experience in international employee benefits, and is currently a Marketing Consultant for Norfolk Mobility Benefits in Naperville, IL.

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 employer is evolving into the transnational of tomorrow as corporations do away with defined headquarters and instead move to regional centers of operations. To meet these and other changes, benefits professionals are implementing global benefits strategies (GBS).  Yet, in recent surveys in which I have participated, nearly 78% of multinational firms have no formal international employee benefits strategy!

Designing Your Strategy
There appears to be more centralization of core corporate functions in light of the global economy.  While authority for certain functions may be retained on a local or regional level, strategy setting is still at HQ.  In the end, as long as the global corporate benefit strategy is being deployed, certain aspects, for example the selection of vendors/contracts, can be left to the local operations.

A Global Benefits Strategy will provide for some of the following benefits:

  • A blueprint of your company’s decisions describing what employee benefit strategies should be deployed for the enterprise.  It is a living, breathing document that needs to be adaptable to change.
  • Agreed-upon policies to create universal understanding and, hopefully, support from the local subsidiaries.
  • A framework for future benefits changes and enhancements.
  • A written strategy which allows employees to see how certain benefits decisions were made, and is very helpful when new stakeholders are brought into the process.
  • Strategies to manage costs; global benefit costs are substantial.
  • An organization-wide reference when trying to understand or drive employee benefits decisions and planning.

Key Elements of a Global Benefits Strategy
Global benefits strategies can take many forms, and range in length and depth, but most successful strategies will include many of the following elements:

  • Global Benefits Committee – This team should consist of representatives from HR, legal, treasury/finance, risk management and, when possible, various global business units. 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.
  • Statement of Objectives – The team should develop a written, agreed-upon statement or set of statements that defines the overall objectives of the GBS. 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.
  • Policy Guidelines – Policy guidelines provide specifics about the various benefits and levels of benefits that support and are tied to the GBS statements. For example, life, accident, disability, medical, retirement and savings plans are outlined with target levels of coverage; and integration with social plans is detailed. Keep in mind, though, that too much detail can lead to guidelines that cannot be applied globally. With medical plans, for example, specific co-insurance percentages may not apply when a supplemental medical plan in a particular country is based on a schedule of fees.
  • Implementation and Review – After agreeing on its strategies and supporting guidelines, the GBS committee must put certain processes in place to activate the plan. Typically, an announcement from a senior-level executive to key, local employees helps gain attention and buy-in. Local buy-in should be targeted to management, HR and, in many countries, should include the Works Councils or unions. This step is critical to successful implementation of any global benefits strategy.

Reaping the Rewards
After the announcement of the new global benefits strategy, a benefits audit is often conducted to educate the central benefits staff about what plans are in place.  For a new company, implementing a GBS is easier than for a well-established firm that must harmonize many plans to create a unified and consistent global benefits strategy. The benefits professional’s role is essential at this stage. Many consultants and insurers offer software packages to assist in this process, although many corporations devise their own audit form to meet their specific needs.

Set procedures need to be in place to implement, review and enhance local plans. Usually, one individual has a certain dollar amount of approval authority to exercise any latitude permitted by HQ (for new and/or enhanced benefits). The more senior the individual, the more authority. Local benefit needs — and wants — must be measured against predetermined criteria. This authority can be with corporate, local or both, as set forth in the GBS.

Along with these approval procedures, established communication chains must be followed. In cases of mergers, acquisitions and divestitures, reliable benefits data (pension reserve, for example) must be readily available. Pre-established lines of communication will help in this type of scenario.

In most instances, resources are scarce, resulting in a decentralized approach.  In spite of this, there have been more than a few “ideal” GBS roll-outs.  An announcement, then an audit, followed by site visits from benefits staff to bring the local plans into compliance with the new philosophy is a typical, effective approach.

Taking the First Step
While global benefits strategies can be similar, each company must tailor one to fit within its industry and corporate HR philosophy. The first step in this process is creating a shared vision for a GBS that is flexible, simple, legal and tax compliant. Further, it should integrate governmental social plans with new or existing supplemental plans provided by the company.

A multinational enterprise must look after its global employee benefit plans.  We all are under the budget microscope.  However, a well-articulated global benefits strategy will enable HR to manage benefits resources globally and ensure a compliant and competitive benefits approach in every country.

More About David:

Medical Tourism: Saving Money on Global Benefits, Part 3

George Bashaw

Author:
George Bashaw – Atlas Global Benefits

Medical tourism is a hot topic, but can it save money for your company?  And if the answer is yes, should you adapt your health plan to incent certain employees to go overseas for medical procedures because it is less expensive?  This is a complex issue and requires that you do your due diligence before deciding anything.  This blog on medical tourism is part 3 in a series to help companies save money on international benefits.

Medical Tourism
If you are unaware, medical tourism is exactly what it sounds like, people traveling abroad for medical procedures.  According to McKinsey and Company, the industry is expected to reach over $100 million by 2012.  With medical cost skyrocketing in developed countries like the US, people are traveling to places like India, Singapore, and Thailand for savings up to 90% on certain procedures. For example, a heart bypass in the US can cost around $150,000 compared to $15,000 in India, which includes air fare and a brief vacation. Therefore, self insured corporations with and without global operations are taking notice and beginning to investigate.

Multinational Companies
If you already have a multinational employee base with a true global benefits plan, medical tourism is a viable option for your employees covered under the existing plan.  Typically, under these plans your employees can seek medical attention from the provider network.  However, it is also typical to find the domicile country of your company to be excluded from these plans.

If you have a true global benefits plan, ask your broker or your carrier about the possibility of medical tourism within this population.

Self-Insured Plans
Perhaps the greatest potential savings can be realized by self-insured plans in developed countries like the US where medical cost are high.  Unfortunately, I am unaware of a clear solution you can implement.  However, large medical carriers like CIGNA will help you explore the opportunity.

I recommend performing a utilization study going back 3-5 years to determine the occurrences of planned medical procedures which are good candidates for large savings like heart bypass, hip replacement, or knee replacement.  Armed with this data, you can compare those costs with alternatives in other counties.  Then, create an incentive plan that may appeal to a segment of your employees.

Sounds great for the wallet but India for Heart Surgery?
The thought of traveling thousands of miles to a distant country, where you may be unfamiliar with the culture and customs, and sometimes even the language, may sound like a big step, and it is.  However, you may find the quality of care equal or better than you are receiving now.  I live in Tulsa, OK and going to Cleveland Clinic sounds appealing if faced with a medical procedure.  Did you know that the Cleveland Clinic has a joint venture with the UAE and a clinic in Dubai?  Did you know that the Harvard Medical School has a joint venture with Wockhardt in India?

In Summary
There are many additional aspects to explore with medical tourism: cost, quality of care, cultural, legal, liability, and more.  Unfortunately, it would take a novel to address them all and I cannot in a blog piece.  However, if you are serious about saving money the potential is there.  Just be sure you do your due diligence.  Please leave a comment to let me know your thoughts or experience with this topic.

More about George:

Expats: Saving Money on Global Benefits, Part 2

George Bashaw

 

Author:
George Bashaw – Atlas Global Benefits

I hear snippets everyday about the economy recovering. Try telling that to your HR friends.  They are still getting pressure to cut costs and create efficiencies.  Adopting a true expat plan for benefits can create numerous efficiencies.  This blog is Part 2 in a series to help companies save money on international benefits by creating a global health benefits package specifically for expats.

Hard Cost
I am surprised every time I run into a company that does not have a global benefits package for expats.  A typical response is, “we don’t want to spend the money.”  This is a common misconception.

Did you know:

  • Expat plans are typically less expensive and more compressive than a comparable domestic plan;
  • The plans typically they do not have copays and many of the exclusions common with domestic plans;  and
  • The hard cost does not take into consideration the cost of a critical event like a heart attack or a medical evacuation and repatriation without international coverage.

Do a comparison and see where your company falls.

Efficiencies for HR
A company has three options when insuring expats:  keep them on a domestic plan and run claims through their current carrier; put them on a local (country-specific ) plan; or a specialized expat plan.  By choosing the latter, you can greatly reduce the administrative burden.  Here’s how:

  • Compliance:  Administering employee benefit plans in multiple countries creates a significant amount of compliance with local laws.  Adopting a global benefits package for globally mobile employees shifts the burden of compliance from the HR department to the insurance carrier.
  • Claims and Service:  This becomes the responsibility of the expat carrier.  It is only a matter of time before you have an employee in an assignment country on the operating table demanding payment to begin surgery.
  • Consistency in Benefits:  It is common for companies to provide expats with a local health care solution rather than one that is fully transportable around the globe.  Since benefits vary from country to country, you could end up with a disgruntled expat when they discover that one country’s benefits are richer than the next assignment.

Benefits for the Expat

  • Freedom:  Expats are on foreign assignment and their needs are significantly different than someone who is a local employee.  By nature, the expat will travel (different countries and home) and they need coverage that will follow them.
  • Productivity:  A global benefits package keeps your expat focused on their assignment.  They no longer worry about having to travel for medical care or deal with claims and medical provider issues.

Foreign Nationals
Creating a global benefits plan for non-US citizens working abroad requires some due diligence and proper communication.  The challenge is to design a plan that is integrated with any social benefits so there is no duplication. Perception of the new plan is very important.  In order to be well received, it is necessary to properly communicate the benefits to the expatriates so they are comfortable with the new private coverage as compared to their prior social system.

Use a Broker for a Complete RFP
I know this sounds self serving, but use a broker who writes international coverage.  Out of ten companies I call on, nine have one of two expat carriers. But there are more than a half a dozen carriers who provide quality coverage and it would serve you well to get a full RFP.  Second, a broker has knowledge of the market, leverage with carriers, and can match your needs with the appropriate insurance provider.  Third, most brokers have enough business to merit carrier discounts that can help negate commissions or broker fees.  In sum, make sure you are specifically insuring your risk and use a professional to facilitate the process.

I hope this helps you navigate through the complexities of expat health care options.  Please let me know your thoughts by leaving a comment.

More about George: