Globally consistent, locally relevant 

The value of an employer providing a specific discretionary benefit to its employee varies based on the employee’s location. Factors impacting a benefit’s value include:

1. Gaps in the country’s social security program.
2. The capabilities of vendors to offer solutions which minimize those gaps.
3. Tax efficiency of offering benefits compared to cash.
4. Ability to obtain pricing, terms and conditions that are more favorable compared to individual policies.
5. What your competitors are offering to attract and retain employees?

While there are common themes, according to Mercer’s 2024-2025 Global Talent Trends report, the value of specific benefits and their ability to allow employees to thrive vary country-by-country and potentially more granularly within country.

Measuring the value or return on investment of a specific benefit program is fraught, even when accurate, real-time data is readily accessible. Nevertheless, it is important to develop metrics, both qualitative and quantitative, to evaluate the success of a benefit program against its objective(s).   This can help you determine the optimal benefits offering for each of your locations against ever restricting budgetary constraints. 

This balancing act becomes ever more difficult as you expand the lens across geographies, but there are a few areas that we believe are critical to consider:

Robust global strategy framework

Developing, codifying, and clearly communicating your organization’s global benefits strategy is a critical first step in evaluating a benefit program’s success. A successful strategy should include:

• Articulating your benefits philosophy: Clearly define your organization’s benefits philosophy to ensure alignment with overall business objectives and values. This philosophy promotes consistency in benefits offerings while accommodating local market practices, legal requirements, and cultural differences.
• Developing a fit-for-purpose governance structure: Create a governance framework that balances flexibility at the business or country level with centralized monitoring and decision-making. As part of this process, it is important to identify all stakeholders that need to be involved in the decision-making process.
• Ensuring access to accurate information: Provide easy access to detailed information on benefits offered and their associated cost. Understanding what benefits are offered and their associated costs is essential for making informed decisions about potential changes. This includes all benefits, perquisites, and allowances so that a holistic, total rewards picture can be developed

Creating a benefits roadmap

Once your strategy is in place you can assess your existing benefits offering on a country-by-country basis against your strategy while developing an understanding of the costs associated with each benefit and how these costs are expected to change over time. We recommend taking a holistic, total rewards perspective to these assessments to understand the complete picture of your benefits offering and how they differ country-to-country. Focusing significant internal resources on managing costs of a single benefit program (e.g. medical spend) may be inefficient if the impact of that benefit on overall costs is proportionally low.

Recommendations for benefit enhancements as well as areas for cost savings can then be evaluated based on their impact to employees as well as their cost to the organization. From a cost management perspective, identifying and quickly implementing changes that have a measurable cost savings to the organization with little to no impact on the employees is critical to avoiding more difficult decisions in the future. 

It is also important to have clear rationale for why certain opportunities have not been prioritized as well as situations where they may become a priority. This may be due to negative employee reaction, lack of resources, complexity of implementation, etc. and will help HR in discussions with other internal stakeholders who are only looking at the cost side of the equation.

Economies of scale

Additional opportunities for multinational organizations to create efficiencies are related to your organization’s size and breadth. Areas such as global financing (pooling, captives, etc.) against local financing (fully insured, self-insured, etc.) are opportunities to both structure benefit programs in the most efficient manner, but potentially also improving programs for employees (e.g. higher free cover limits, fewer exclusions etc.) Considerations for streamlining vendors and administrative processes are other areas that should be evaluated.

Watch our webinar replay to learn more about cost optimization and employee wellbeing strategies.