Global Talent Management: The Challenges of Multinational Employee Benefits
No matter the company, industry, or location, an organization’s employee benefits package is a critical component of successful long-term talent management. Keeping operations competitive yet cost-effective is fundamental for the continued success of companies across the globe.
However, these efforts are often complicated by the obligation that multinational organizations remain compliant with local laws and regulations on employee benefits. These legally-required benefits, otherwise known as statutory benefits, can change subtly or significantly depending on geographic location.
Complying with statutory benefits makes international talent management a delicate balancing act that involves adapting to local laws and legislations on a regional or country-specific basis. But employees might also expect more. Smart international organizations are striving to exceed the legally-required minimum in order to optimize employee retention and attraction. Of course, when an organization operates in several regions throughout the world, it’s cumbersome trying to stay up to date with the local employee benefits requirements for every location. Even for the most seasoned HR veterans, all of this can make global human resource management a costly and time-consuming endeavor — without the right tools, that is.
Country-to-Country Employee Benefits Variances
While it’s true that total benefits packages are becoming key to talent retention across the world, required statutory benefits can change drastically, even on an annual basis. Additionally, every region might also have a set of typically offered supplemental benefits, and while those benefits might not be mandatory, the local labor market has come to expect them. This understanding of local requirements versus expectations is a critical first step toward recognizing how and why employee benefits differ so greatly on a global scale.
When experienced HR professionals are not physically present in every region where an organization is active, one of the greatest challenges is identifying and managing those regulatory differences that are not readily apparent. Even less obvious are the consequences of not complying with market demands, and any HR professional can have difficulty trying to track the shifts in social norms that often dictate employee expectations.
Here are just a few examples of how benefits can vary greatly across different global regions:
- Women in India typically aren’t allowed to perform factory work at night. As a result, third shift labor is usually reserved for males.
- In Northern Russia, it’s customary for employers to reward employees contending with frigid weather conditions by giving them large amounts of paid vacation time.
- The Brazilian social security system offers 50% of an incarcerated employee’s salary to his or her family for the duration of imprisonment.
- Depending on their length of service, Australian employees could be entitled to as much as 12 weeks’ salary after being fired.
These are just a few examples showing how different legal requirements can impact a specific country’s workforce, as well as why certain employee benefits are expected more in some places than in others. With a multinational workforce, there are seemingly endless factors to consider, and that’s precisely what so many human resource management professionals struggle to address.
Using Global Employee Benefits Data to Gain the Advantage
To help compile, consolidate, and make sense of these legal disparities and how they affect local workplace policies, many HR professionals rely on data from yearly international employee benefits reports. These annual reports help organizations avoid legal mishaps, fines, and penalties via comprehensive, country-specific data on corporate compliance laws. At the same time, they spotlight optimization opportunities for global benefits packages by ensuring that organizations are aware of any supplemental benefits that aren’t required by law but still remain prevalent enough to be considered the norm. Across the world, statutory or supplemental benefits could encompass anything from disability insurance to dental insurance to parental benefits to vacation and leave standards, all of which may vary depending on the country in question.
Without reliable data to use as a reference guide, multinational organizations face a constant risk of falling out of compliance with local legislation, statutory requirements, and standard supplementary benefits. Failing to comply with the statutory benefits requirements could result in any number of penalties, from fines to organizational dissolution. And, due to the vast number of country-specific governmental guidelines to follow (which could relate to anything from interviewing etiquette to workplace safety requirements to obscure licensing issues), corporations could easily find themselves in violation completely by accident.
When dealing with complex corporate operations on a global scale, it becomes apparent that an annually updated, country-by-country multinational benefits guide becomes much more than a helpful asset — it becomes a necessity for successful long-term compliance.
Want to learn more?
Mercer’s Worldwide Benefit & Employment Guidelines (WBEG) report contains exhaustively compiled data on benefits practices and regulations in 77 different countries. The report is split into five regional versions encompassing the Americas, Asia Pacific, the Middle East and Africa, Western Europe, and Central and Eastern Europe.
Optimal for companies established in their markets or companies preparing to move into new markets, the annually updated WBEG report provides timely, cost-effective data solutions for countless multinational companies.
When purchased year over year, WBEG is often used as a quick and thorough reference guide for multinational HR professionals looking to keep up with the constant statutory changes for any designated countries. WBEG can also be used to dive deep into the details of any one specific policy or benefit, and so much more. View the Worldwide Benefit & Employment Guidelines to see what else the report can offer your organization.
Contributing Author: Chrisy Wilson
Chrisy is the Global Leader of Mercer's Data Mining & Insights (DM&I) group, a global team of data analysts, graphic designers, project managers, copy editors, and writers contributing to a portfolio of more than 15 annual publications and tools covering compensation, benefits, and other HR areas. As a component of Mercer’s Intellectual Capital Solutions (ICS), DM&I also provides support in the creation of content for Mercer Select Intelligence (MSI).
Contributing Author: Austin Lotz
Austin is a writer for Mercer's DM&I group, where he contributes to Mercer’s annual publications, including the Worldwide Benefit and Employment Guidelines. He also works on internal and external marketing materials for Mercer products, and provides content for Mercer’s subscription-based membership platforms.