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For multinational companies, the pandemic has certainly made managing global benefits programs more challenging. In this environment, we urge leaders to continue staying focused on the health and financial well-being of their workforce, whoever and wherever they are.

At many multinationals, fallout from the novel coronavirus is forcing global benefits leaders to do even more. Employees around the world are reassessing what is important to them, including what they expect from their job and employer. Expectations have risen here, and employees want to feel their companies care about them.

In this new environment of higher expectations, employers need to prioritize goals. Remember, not everything can be achieved at once, so we advise to first focus on protecting your people to support the purpose of your organization. It sounds simple, but it is not necessarily an easy task. There is no quick answer to the question, “To what extent are your programs fulfilling the mission of increasing the health and financial well-being of your global workforce?”

In recent interviews with more than a dozen global benefit managers, we see some emerging themes in terms of best practices, and where the pain points lie. The definition of benefits is expanding, and with it, the responsibilities of global benefits leaders. Few platforms are truly global, solutions are still too fragmented, and there’s still too much paper. Change is slow. Execution is hard.

In addition, we still see a stubborn misalignment between what global leaders think the programs are providing, and how their people value them.

For example, at one global vertically-integrated multinational, total rewards and benefits particularly were very high across its regions worldwide, about 20% higher than the industry average. Yet employee feedback on total rewards was just “okay” in almost all countries. So there was a disconnect between reality and perceived value. With employees looking for support from their employers worldwide, this gap is likely to be getting worse for many global organizations. So where to start? Here are a few examples of where we see improvement in action:

  1. Retirement planning. Market-leading organizations are working to strengthen their defined-contribution (DC) plans, yet there’s room for improvement. For many companies, DC plans still represent their highest people cost after salaries, yet we still see a lot of value being left on the table. Getting lost too often is a focus on employee participation and engagement, whether employees make sound financial decisions, and whether these plans will ever provide adequate long-term financial well-being. (The answer is often “No”).

    It’s not about returning to a defined benefit (DB) plan framework, but about getting DC right—with the right delivery model in all countries that optimizes resources and scale, complements local state provision, and delivers meaningful outcomes that employees understand and value. It’s about the right analytics to measure success, and insights to continuously improve and innovate. And it’s about true engagement and support for employees’ financial well-being, including increasing use of digital solutions.

    And it’s also increasingly about taking a truly global view and reaching all employees everywhere. Focusing on the top countries still has some logic, but we observe leading employers wanting to support the financial well-being of all employees everywhere with meaningful, high-quality retirement and savings plans. For example, one of our multinational clients has significant populations in countries where there is no real market for DC plans, such as Madagascar and Mongolia, and they are now looking to pioneer new solutions locally to deliver meaningful savings to these employees. More often organizations are looking for international pension and savings plans also to reach local employees all over the world, where the provider markets and government benefits fall short.

  2. Gender equity. Research shows that the retirement savings and financial well-being of women is typically far worse than for it is for men worldwide. The gender pension gap is 26% on average among member countries of the Organization for Economic Cooperation and Development, according to its recent paper “Towards Improved Retirement Savings Outcomes for Women.” Early findings from our own research in the United Kingdom shows female savings rates start to decline versus that of males at around age 30. While some women contribute higher rates than men at older ages, it’s far too late to catch up.

    Leading multinationals are starting to recognize the gender “pay gap” is much broader than salary, and includes financial well-being. It’s still early days, but we see this issue gaining significant traction globally. Potential solutions will evolve, and could feature more targeted education, through segmented marketing of retirement and savings plans, including at key life stages, such as around marriage and maternity leave, as well as structural changes, such as subsidy of contributions during leave periods.

    Defining measures of success—and collecting the right data—will be extremely important. We believe there is a significant opportunity right now for multinationals to do much more to lead on gender equity in financial well-being, and thereby differentiate their value proposition for all employees.

  3. Diversity and inclusion. Some leading organizations are moving beyond standard global audits of benefits plans, such as ensuring compliance with local regulation and market norms. These organizations are looking to influence local markets, from providers to key internal stakeholders, to shape benefit plans in line with organizational diversity-and-inclusion principles.For example, one global organization has successfully implemented specific ways to insure LGBTQ-friendly medical plans and provide same-sex life cover for couples in countries where it’s not typical (e.g., Japan). Making such program changes may only affect a small proportion of your workforce. It also may be quite technical and not straightforward to execute. However, these shifts can make a very significant impact on the appreciation and engagement of your benefits across the entire workforce and represent an opportunity for you to support your brand within and outside the organization.

All of these strategies should be top priority for companies and will generate appreciation of the value of the firm’s benefit spending, and consequently drive up engagement. A review of your programs will help you focus on where to put your efforts at a time when COVID-19 has altered the benefits world.

Above all else, as you work to refine your programs, keep it simple. Stay focused on your people. Challenge your providers to offer your employees more, and challenge your advisors to bring you fresh ideas.

We’ll continue to talk with global benefits leaders, and we invite you to get in touch to be a part of the conversation.

Contacts

John-Paul (JP) Augeri

Managing Director and Global EB Consulting Leader, Milliman

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Contacts

John-Paul (JP) Augeri

Managing Director and Global EB Consulting Leader, Milliman

VIEW PROFILE