Transcript

Announcer: This podcast is intended solely for educational purposes and presents information of a general nature. It is not intended to guide or determine any specific individual situation and persons should consult qualified professionals before taking specific action. The views expressed in this podcast are those of the speakers and not those of Milliman.

John-Paul Augeri: Hello and welcome to Critical Point, brought to you by Milliman. I’m J.P. Augeri, managing director and global employee benefits leader here at Milliman, at our international consulting arm, MBWL, and I’ll be hosting today’s podcast. For this episode of Critical Point, we’re going to be exploring critical trends and priorities in global benefits for 2022 and beyond, through a one-on-one conversation with a special guest. I’m pleased to welcome Vicky Nevin to the podcast. Vicky is the head of international compensation and benefits at Microsoft. Good afternoon, Vicky.

Vicky Nevin: Good afternoon, J.P.

John-Paul Augeri: How are you?

Vicky Nevin: I’m very well, thank you.

John-Paul Augeri: Vicky and I have known each other and worked with each other for a number of years now. But rather than me put words in her mouth, Vicky, could you describe your role at Microsoft?

Vicky Nevin: Certainly can. So as my title suggests, I manage our international compensation and benefits team. We have compensation and benefits consultants in all our major areas across the world, the Americas, the Europe, Middle East, and Africa (EMEA) region, Asia. We also have an international benefits team, who report in to me and work alongside my compensation and benefits (C&B) consultants.

John-Paul Augeri: And remind us how many countries and numbers of people outside the U.S.—?

Vicky Nevin: So we have approximately 108 countries.

John-Paul Augeri: Approximately, yeah.

Vicky Nevin: Where we have actual presence, which is important when it comes to compensation and benefits delivery. And we have approximately 160,000 full-time employees (FTEs).

John-Paul Augeri: And again, that’s international, meaning outside of the U.S.

Vicky Nevin: No, that’s global.

John-Paul Augeri: Oh, that’s global.

Vicky Nevin: That is global.

John-Paul Augeri: OK.

Vicky Nevin: But my team’s role covers U.S. compensation, but the benefits is managed by a large—

John-Paul Augeri: OK.

Vicky Nevin: —U.S. benefits team.

John-Paul Augeri: And outside of the U.S., roughly we’re talking how many people—?

Vicky Nevin: I would say it’s now probably about 55% U.S., and 45% international.

John-Paul Augeri: Yeah, right. So really substantial numbers outside of the U.S.

Vicky Nevin: And growing.

John-Paul Augeri: Well, and growing, right. So could you maybe set the scene? Describe, say, the current state of international benefits at Microsoft? The state of international benefits at Microsoft

Vicky Nevin: Certainly. Well, it’s a lot nicer place than it was about five years ago.

John-Paul Augeri: OK.

Vicky Nevin: So I returned to Microsoft, having worked here previously, in the international compensation and benefits role. And at that time, international benefits programs and communication and management were done very inconsistently, very differently across each country and we started to get an increasing number of vendor compliance issues, program inconsistencies with our core Microsoft global benefit principles, and it just felt broken. A different employee experience, country by country. In the U.S., there’s a big focus on the world-class benefits offering, and we didn’t feel like we were following that through for our international employees. So myself and one of my colleagues, Samantha, who is now heading up the international benefits team, put our heads together, in our spare time, and pitched to our head of total rewards for some help with problem-solving, how we can consolidate the management of benefits, bring it all together, looking to get some better scale, better consistency, reduce our risk in the area of program compliance, legal compliance, vendor compliance. I think just those compliance words sold it initially, but then the resource side of it and the inconsistent employee experience sold it as well. So this was approximately three years ago. We were given a small number of head count to set up small international benefit teams in EMEA and our Latin America (LatAm) region, and we started on the task of transitioning benefit programs from wherever and whomever was managing them at that time, into these central teams.

John-Paul Augeri: Right. And a couple questions. So again, thank you. Benefits means what in terms of, are we talking just medical, disability, life, or are we talking retirement, broader benefits? Just, what’s in scope?

Vicky Nevin: So that’s always a good question and we do have a clear scope PowerPoint slide that we like to wheel out at times. But essentially, it’s employee benefits that are offered by Microsoft, not the peripherals. So it’s the medical, pension, life assurance, group income protection, anything that’s not like a local country sort of in-office offering, like local discounts or free sodas or—

John-Paul Augeri: Right.

Vicky Nevin: —mobile phones, things like that. That’s all kind of more local facilities. So our in-scope is core benefit programs, insurances, and the like. The journey to centralize benefits

John-Paul Augeri: So on this journey to centralize, so what have been some of the—what were some of the early areas of focus for you when you started on this journey? When you got this stakeholder buy-in, which is really, really important anywhere, what were some of the first steps?

Vicky Nevin: Looking at bringing some structure. It was the first—I have to say, the first six months, both Sam, who was sitting in the U.S. at this point and I was in the UK, we spent many late nights, well, late nights for me, working together.

John-Paul Augeri: Mm.

Vicky Nevin: It was trying to figure out the impossible, it felt like at the time. This hadn’t been done before at Microsoft. We’d never consolidated international benefits, and we kind of didn’t know where to start.

John-Paul Augeri: Yeah.

Vicky Nevin: So Sam’s background is very much from a program management side, and so she bought that structure, actually—

John-Paul Augeri: Yeah.

Vicky Nevin: —to the thinking process, a kind of approach to this that really helped. So where did we start? We started small. We started with the small, what we call multi-country areas. So within the EMEA region, we’ve got large single country areas, such as the UK, France, Germany, which are big markets, have had lots of resource from an HR perspective.

John-Paul Augeri: Yeah.

Vicky Nevin: And kind of had things under control. So we thought, OK, the more lower-hanging fruit, in the benefits world, would be those countries where we have small numbers of employees, maybe no HR resource in-country, where things have been done by office managers or finance.

John-Paul Augeri: Mm-hmm.

Vicky Nevin: And where we were getting most compliance issues from a vendor perspective.

John-Paul Augeri: Yeah.

Vicky Nevin: Or we weren’t keeping up with the legal requirements, etc.

John-Paul Augeri: Yeah.

Vicky Nevin: So we started there. Sam brought some structure, in terms of how we would transition benefit programs. So we had a questionnaire that we started off with, with the local team, whoever was managing benefits, for them to start asking the right questions and bringing the documentation and the information, the process flow, data flow, all these different components, part of our transition plan. So a lot of great structure, and then we just scaled it from there, really. We learned from those early countries and transitions, and kind of improved each country by country. So EMEA kind of expanded out from our Western Europe countries, our Central and Eastern Europe (CEE) countries, and Middle East and Africa (MEA) countries. And now, two years later, we’re now working on transitioning in our bigger countries, in UK, France, and Germany. So we’ve come a long way. At the same time, we took on LatAm as well. There was lots of—

John-Paul Augeri: Yeah.

Vicky Nevin: —inconsistencies in just the LatAm region, and they kind of followed EMEA’s—well, we used the same structure to transition the benefit programs and information. Yeah, so that took about a year, year and a half, to transition those countries.

John-Paul Augeri: OK.

Vicky Nevin: Learning all the time, tweaking all the time, forging stronger partnerships along the way with our—

John-Paul Augeri: Uh-huh.

Vicky Nevin: —HR privacy team, with our compliance teams, our procurement teams, and constantly refining roles and responsibilities along the way, and that’s quite a theme. So that is ever ongoing. Benefits compliance, consolidation, and transitions

John-Paul Augeri: It sounds like a mountain of work. Tell us a little bit about maybe one or two things that you did learn along the way, now that you tackled the bigger countries, you know, here are some of the things that we’re going to sort of—

Vicky Nevin: There’s been—

John-Paul Augeri: —again, learn and apply—

Vicky Nevin: —many—

John-Paul Augeri: I’m sure there’s a lot.

Vicky Nevin: Yes, there’s been many learnings and I won’t share specifics.

John-Paul Augeri: Right.

Vicky Nevin: But when we went in to do some of these country transitions, we found the benefit programs in different states. Very surprising, in some of the bigger countries, we found that our pension plan providers weren’t even—hadn’t gone through our vendor compliance process—

John-Paul Augeri: Yeah.

Vicky Nevin: —so they weren’t compliant. The way the plans were structured wasn’t compliant with the law or market practice.

John-Paul Augeri: Mm-hmm.

Vicky Nevin: So very technical things, and compliance areas that were just quite shocking to us.

John-Paul Augeri: Mm-hmm.

Vicky Nevin: They’d been managed outside of HR.

John-Paul Augeri: Right.

Vicky Nevin: By different people, by people that probably weren’t qualified or experienced in benefits management. And then as part of the transitions, we didn’t want to cast blame or—

John-Paul Augeri: Right.

Vicky Nevin: —kind of highlight anything, so we just kind of explained the benefits of consolidating into an experienced group of benefit professionals, highlighting some of the areas that were of concern, and we kind of slowly worked through with those people that were—had been managing those programs, kind of worked through the processes, so we didn’t cause alarm—

John-Paul Augeri: Yeah.

Vicky Nevin: —or put people in a defensive position.

John-Paul Augeri: Sure, sure. Well, exactly. I can imagine people are busy and, in a way, particularly in some of these smaller country—this is not someone’s day job, necessarily, right?

Vicky Nevin: Yes.

John-Paul Augeri: So in a way, this is good news to them, but at the same time, you know, it’s still a transition. You know, why is this the right thing? What’s wrong with what I did before?

Vicky Nevin: Yes.

John-Paul Augeri: Those sorts of things. Is that—?

Vicky Nevin: And it was the same with vendors, as well as—

John-Paul Augeri: Mm-hmm.

Vicky Nevin: —existing employees. So an example I can share is, in some of our Central and Eastern European countries, they’re all fairly small population sizes.

John-Paul Augeri: Yeah.

Vicky Nevin: The office—there was an office manager role in many—

John-Paul Augeri: Right.

Vicky Nevin: —of our offices there, which kind of took on the role of facilities, finance—

John-Paul Augeri: Sure.

Vicky Nevin: —HR, bit of everything.

John-Paul Augeri: Yeah.

Vicky Nevin: So they used to get involved in the company car policy and program. They used to be the ones that were signing approvals off—

John-Paul Augeri: Right.

Vicky Nevin: —or exceptions off. They were getting the keys from the lease provider, handing them to the employees, arranging services.

John-Paul Augeri: Yeah.

Vicky Nevin: And we’d actually already signed up for the leasing company, or the fleet logistics company, to do this service. So we were paying for a service that was already being done by our office managers, and they actually quite enjoyed doing that.

John-Paul Augeri: I bet. Yes.

Vicky Nevin: That role. So when we sort of said, you know, “We’re already paying for this, the fleet logistic company to hand, often the leasing company, and it’s not your role to kind of approve exceptions to our policy, that that needs to be an HR—

John-Paul Augeri: Yes.

Vicky Nevin: “—kind of role. It’s part of the employment contract.” So there were some difficult situations like that to kind of—

John-Paul Augeri: Yeah.

Vicky Nevin: —unpeel and then kind of move forward.

John-Paul Augeri: Yeah. And I imagine anticipating some of those—if I think about lessons or in my experience anyway.

Vicky Nevin: Yes.

John-Paul Augeri: But it’s like a—you start to build an understanding of, and a sense of, how this might play out in different countries that—

Vicky Nevin: Yes.

John-Paul Augeri: And again, how do you manage through that process? You know, there’s a lot that goes into managing benefits, and—

Vicky Nevin: Mm-hmm.

John-Paul Augeri: Because you have to start somewhere. It did seem like you were really focused on those compliance areas. Is that right?

Vicky Nevin: Sam brought the structure to a lot of this work.

John-Paul Augeri: Right.

Vicky Nevin: So the journey, we’ve just been—we’ve now completed almost two years of this new international benefits team.

John-Paul Augeri: Wow.

Vicky Nevin: We’ve grown from, I think there were four people and myself, including Sam initially, and now we are at, I think there’s about 15 of the team.

John-Paul Augeri: Wow.

Vicky Nevin: And we’ve got an Asia, an EMEA, and an Americas benefits team.

John-Paul Augeri: Right.

Vicky Nevin: So Sam—so we looked backwards recently, when we had our two-year anniversary back in January, and we looked at the kind of stages of how a team evolves, how the work evolves. And the first year, or probably two years actually, was all about consolidating and transitioning benefit programs into this central team.

John-Paul Augeri: Yeah.

Vicky Nevin: And the focus, we’ll have different sort of sections to that. Kind of the important stuff was to make sure we were compliant in all areas.

John-Paul Augeri: Yeah.

Vicky Nevin: So first of all it was, yeah, the vendor process, making sure all of our vendors went through our internal Microsoft compliance process, which is all about data management, really, and the security of our employee data.

John-Paul Augeri: Yeah.

Vicky Nevin: Which is, yeah, very important to all organizations, I would say. And then there was the legal compliance, which kind of came a little bit after, when we were reviewing the nuts and bolts of every single benefit programs.

John-Paul Augeri: Yeah.

Vicky Nevin: We were—take, as I say, a pension plan in one country, compare it to the market practice, what we knew as benefit professionals a plan should look like in a certain country.

John-Paul Augeri: Right.

Vicky Nevin: And see where there might have been gaps. Look at recent legislation to see if the legislative changes had been—

John-Paul Augeri: Yeah.

Vicky Nevin: —reflected in the plan design. So this was for—and we’ve transitioned I think now about 85 countries.

John-Paul Augeri: Yeah, wow.

Vicky Nevin: There’s some small ones we haven’t done yet. So this is a lot of work.

John-Paul Augeri: It is.

Vicky Nevin: There’s multiple benefit programs in each country.

John-Paul Augeri: Right.

Vicky Nevin: And it’s still ongoing. So part of the consolidation stage was really just getting the plan information consolidated.

John-Paul Augeri: Right.

Vicky Nevin: We got a team to populate all the plan information again. We improved the reporting capabilities. So finally, we had a central database of all of our benefit programs that we hadn’t had at Microsoft ever.

John-Paul Augeri: Ever, right.

Vicky Nevin: Which is embarrassing to say. A company the size of Microsoft hadn’t got a full inventory of their international benefit programs.

John-Paul Augeri: But it’s so common, isn’t it, I think. And also, I think sometimes it’s just time and—

Vicky Nevin: Resource.

John-Paul Augeri: —company change, resource, acquisitions. So again—

Vicky Nevin: Yes.

John-Paul Augeri: —how do you keep it up to date? But yeah, it sounds like you were starting from a low base on that front.

Vicky Nevin: We were starting from a low base, and then, I mean, and to say—there’s still so much to do, because we’ve got the core inventory. But as you say, when you acquire a company with acquired rights coming over, you know, we’ve got to document all that as well. So there was a lot of work to do in each country. And it was—so that was the vendor compliance, the data management, updating our internal websites, so people knew where to go for a list of benefits in each country, which sounds simple, but we’d never had that before. We had it for the bigger countries, but we never had sort of marketing brochures for every single country—

John-Paul Augeri: Yeah.

Vicky Nevin: —that our recruitment team could use, which you could—

John-Paul Augeri: Right.

Vicky Nevin: —leverage internally. And now we have. On our internal HR web every single country has a brochure, a marketing brochure, which is branded in the same way. It’s got the list of benefits and links to plan documents, etc.

John-Paul Augeri: Great.

Vicky Nevin: So it’s very exciting to see. And all of this done in two years.

John-Paul Augeri: Yeah.

Vicky Nevin: By the team. So it’s a fantastic lot of work.

John-Paul Augeri: Well, and as you outlined, the amount of people in countries that Microsoft has grown and expanded and acquired over the years. So it’s a lot, it’s a lot.

Vicky Nevin: Yes.

John-Paul Augeri: Yeah.

Vicky Nevin: It is. And then there’s the ever-changing world around us, so…

John-Paul Augeri: Well, there is, there is.

Vicky Nevin: So our—

John-Paul Augeri: Yeah, please.

Vicky Nevin: I was going to say, our employee base is changing. Our internal kind of structures are changing, so it’s kind of evolving the programs we offer in line with that. Looking to the future: benchmarking, hybrid work, scaling globally

John-Paul Augeri: Yeah. So tell us—again, this is a great sort of description of where you are, where you’ve been, and kind of why. I know you’re starting to look forward, right? So tell us a little bit more of that.

Vicky Nevin: Yes. So just over two years into this sort of consolidation and setup of international benefits, the current six months are kind of looking to stabilize the team. So we’re looking a little internally at the moment, in terms of looking at how the international benefits team—which has grown pretty quickly in the last year—

John-Paul Augeri: Yeah.

Vicky Nevin: How they work with our compensation and benefits consultants in the areas, with our HR operations team, with our recruitment team, our acquisitions team. So it’s really looking to much more clearly define people’s roles.

John-Paul Augeri: Mm-hmm.

Vicky Nevin: And evolve the individuals on the team as well. Some of the team have come with benefits experience. Some have come with operational experience. So it’s bringing that all together. And some of our people that have transferred into this team with only operational experience at Microsoft have very quickly picked up benefits experience, and are amazing. And then the next part is, well, what next? How do we transform this team and carry on evolving to, really, our ultimate goal is to kind of equalize and benchmark our international benefits offering—

John-Paul Augeri: Mm-hmm.

Vicky Nevin: —with that of the U.S., which is what we kind of hold up as our high benchmark. And they have—the resources for the U.S. benefits programs far outweigh what we have internationally.

John-Paul Augeri: Right.

Vicky Nevin: So we’re trying to look at ways to leverage some more global things. There are programs—

John-Paul Augeri: Mm-hmm.

Vicky Nevin: —that can be scaled globally. So we’re partnering with our U.S. benefits team, who have appointed some sort of more international, global kind of—

John-Paul Augeri: Mm-hmm.

Vicky Nevin: —benefits specialists in different areas, such as pension or medical or wellness. And we’re trying to figure out with them how we come up with global programs and scale them to our international employees, and how we manage them within the international HR model.

John-Paul Augeri: Yep. And benchmarking against the U.S., again, tell us a little more. Because as I understand it, right, there’s a real emphasis on benefits in the U.S., and sold and marketing, if you will, to employees.

Vicky Nevin: Mm-hmm.

John-Paul Augeri: So it’s well understood this is a key part of the value proposition. Obviously, program by program, plans differ internationally, but it sounds like it’s more that world-class—you know, you can use the right words.

Vicky Nevin: Yes.

John-Paul Augeri: We have world-class benefits in the U.S. How do we do that internationally? Is that simply—?

Vicky Nevin: Yeah, absolutely, absolutely. But I think from a cultural perspective, Microsoft is very much about the employee experience—

John-Paul Augeri: Uh-huh.

Vicky Nevin: And embracing the hybrid workplace, which we all find ourselves in now, and constantly evolving our offering to employees. The benefits offering in the U.S. is very world-class, I would say. We invest a lot of time and money into the programs. We ask our employees for feedback and we constantly evolve them. And it’s definitely one of our selling points when we are reaching out to prospective—

John-Paul Augeri: Yeah, right.

Vicky Nevin: —employees as well. So we would like to have the same pride outside of the U.S., to say yes, Microsoft globally offers these amazing benefits. And it’s not about program-by-program benchmarking.

John-Paul Augeri: Right.

Vicky Nevin: Because different markets have different legal requirements, sort of market preferences, etc. It is about what the employee experience is, how we’re touching employees’ lives, families’ lives, how we’re giving them flexibility. So it’s just that sort of cultural richness we’re bringing in, and we want it to be way more consistent across the globe.

John-Paul Augeri: So what next then? So what are some of the opportunities? I know you’ve highlighted, say, inconsistent—there are inconsistencies internationally. There’s this benchmark of, we want world-class—what are some of the near-term maybe opportunities that you’re seeing and areas of focus, and priorities—?

Vicky Nevin: OK, so we—there’s a couple of tactical areas that we’re looking at, which will help us highlight some of the gaps we might have internationally. So we hadn’t heavily invested in benchmarking outside the U.S. for our benefit programs. We probably concentrated on the larger countries where the investments were higher.

John-Paul Augeri: Yeah.

Vicky Nevin: So we’re now investing much more globally into benefits benchmark reports, on a kind of—

John-Paul Augeri: Yeah.

Vicky Nevin: —country-by-country basis.

John-Paul Augeri: Yep.

Vicky Nevin: And we’re bringing those together, again, on a data-driven sort of view. We use Power BI dashboards to kind of view our compensation competitiveness. So we’re trying to mirror that on a benefits perspective. So it’s figuring out, well, how do we translate the benchmark that we get from an external survey into the Microsoft, kind of—

John-Paul Augeri: Yeah.

Vicky Nevin: —total rewards concept, and bring—

John-Paul Augeri: Yeah.

Vicky Nevin: —bring that together with our stock offering and our compensation offering.

John-Paul Augeri: Yeah.

Vicky Nevin: Just to see, where are we competitive, where are we not so competitive? Where the gaps are, and hopefully that will start to inform from a program perspective, where we need to sort of focus the work.

John-Paul Augeri: Sure.

Vicky Nevin: So that’s more—that’s one of the tactical benchmarking and kind of—

John-Paul Augeri: Yeah.

Vicky Nevin: —one area. And then the other area we’re looking at—is working with our global benefit managers, who predominantly sit in the U.S. team. Just looking at, what can we scale globally? What benefit programs or concepts are out there that we can leverage globally, that don’t rely on local social security systems—

John-Paul Augeri: Yeah.

Vicky Nevin: —or tax systems.

John-Paul Augeri: Yeah.

Vicky Nevin: So wellness is one of those areas.

John-Paul Augeri: Yeah.

Vicky Nevin: And we’ve already invested in a global wellness platform called Be Well, that we’re trying to scale consistently across the world, offering lots of employee resources, basically. Helping them through different times, highlighting education resources—

John-Paul Augeri: Mm-hmm, mm-hmm.

Vicky Nevin: —and local support. We link it in to our Employee Assistance Program (EAP).

John-Paul Augeri: Yeah.

Vicky Nevin: Which, again, we’ve tried to move to a global provider—

John-Paul Augeri: Yeah, yeah.

Vicky Nevin: —for EAP. So these are the things that we’re really trying to work on, that global consistency, so employees have the same experience for these types of programs. They’re all branded the same. I would say we haven’t got there yet. I think where we fall short is, how do we take these great concepts and land them consistently—

John-Paul Augeri: Yeah.

Vicky Nevin: —around the world, without having an army of communications specialists or—

John-Paul Augeri: Yeah.

Vicky Nevin: —benefit professionals to do this? And currently, our HR model is not resourced to spend a lot of time and focus—

John-Paul Augeri: Yeah.

Vicky Nevin: —on in-country communication. So we’re just—that’s where we’re at the stage of, how do we do this?

John-Paul Augeri: Yeah.

Vicky Nevin: There are different options. We could keep it within HR. We’d partner with our communication experts.

John-Paul Augeri: Uh-huh.

Vicky Nevin: Yeah, so that’s TBD.

John-Paul Augeri: Well, execution, right, I think is—

Vicky Nevin: Is key.

John-Paul Augeri: Is absolutely vital, right? And again, given the scale of Microsoft—

Vicky Nevin: Mm-hmm. Keeping up with global changes like climate, political instability, and more

John-Paul Augeri: —etc., I mean, even more than most. So we’ve gone from, OK, we want world-class as a sort of big, broad vision. Some immediate things that you’re going to focus on, immediate opportunities. But what do you see as the critical things that are going to get in the way of you achieving everything you want to in your plans?

Vicky Nevin: Well, there’s so much going on, all the time, in the world.

John-Paul Augeri: Yeah.

Vicky Nevin: At Microsoft, we’re a fast-moving organization.

John-Paul Augeri: Yes.

Vicky Nevin: With employees that expect their kind of HR offering and benefit programs to keep up with this fast sort of pace in the world.

John-Paul Augeri: Yes.

Vicky Nevin: And whether that’s from the hybrid workplace kind of influence and changes that we’re all experiencing, into reacting to the Ukraine situation—

John-Paul Augeri: Yeah.

Vicky Nevin: —which is unprecedented for most of us—

John-Paul Augeri: Yeah.

Vicky Nevin: Where we haven’t had to deal with a wartime situation in a country before. Not many people have to evacuate employees, figure out how to pay people who are banking with sanctioned banks in Russia, and it’s been a really tough sort of three or four weeks, which has taught us lessons about needing to be agile, solution-oriented, and, most importantly, to work together as a kind of a one-HR team. We do have quite a strong one-HR kind of culture at Microsoft, but sometimes, the lack of resources sometimes—

John-Paul Augeri: Yeah.

Vicky Nevin: —kind of inhibits you having a one-HR approach, because there’s just not enough people to deliver the quality that you want to deliver. And that’s kind of where we’ve fallen short on the benefits side, and in-country communications, and management of benefits. It just hasn’t been a top focus or priority.

John-Paul Augeri: Yeah.

Vicky Nevin: We’ve just kind of made do in some countries. So it’s—to us, we feel like there must be a more scalable way to get to everyone round the world—

John-Paul Augeri: Sure.

Vicky Nevin: —and not just focus all of our energy and time on the bigger countries.

John-Paul Augeri: And just with that, you just touched on something interesting there again. I mean, we deal with benefits every day. We sort of get it. But it sounds like this is not just becoming more important to you. Within HR, within the business, there’s a real focus on talent.

Vicky Nevin: Yes.

John-Paul Augeri: Really competitive need around the world, and benefits is a really important part of the value proposition.

Vicky Nevin: I know, absolutely. I think Microsoft, again, we talk about culture being really important to us.

John-Paul Augeri: Mm-hmm.

Vicky Nevin: And you might hear Satya and Kathleen, our head of HR, talking a lot externally around the importance of culture, and the cultural shift that we’ve had at Microsoft over the last five years or so, since Satya became CEO. So benefits is a very strong contributor to that culture.

John-Paul Augeri: Yeah.

Vicky Nevin: Our benefit program should reflect our cultural beliefs and values.

John-Paul Augeri: Yeah.

Vicky Nevin: So yes, it’s a very important part of the HR world now that we need now to refocus on. The world we’re in, with hybrid, has really brought that to the surface. We have to readdress lots of our benefit programs, which were very office-based. We have to think about the different demographics of employees, different needs, and there is no—definitely no one-size-fits-all anymore.

John-Paul Augeri: Well, and just quickly there, and we’ll—something you said which I think we’ve talked about before is this flexibility. So thinking about that, in this new opportunity you have.

Vicky Nevin: Mm-hmm.

John-Paul Augeri: A lot of challenge. But with this impetus and focus, again, I know flexibility’s important at Microsoft, so designing benefits through the lens of being agnostic about whether you’re office-based or not. I think that that’s—

Vicky Nevin: Mm-hmm.

John-Paul Augeri: —quite important to you as well, yeah.

Vicky Nevin: No, absolutely. We have a globally consistent hybrid workplace policy. We’re encouraging people to come back to the office where we can, in each country, maybe up to three days a week, encouraging people to still stay at home two days a week if they want to. Everything’s very much negotiated kind of employee and manager, sort of case by case.

John-Paul Augeri: Mm-hmm.

Vicky Nevin: But then we have to make sure that our facilities and our benefit programs reflect that—

John-Paul Augeri: Yeah.

Vicky Nevin: —arrangement. We have to answer lots of questions around, well, what’s reimbursed and what’s not reimbursed? And are you going to pay for my internet? Or are you going to pay for my—

John-Paul Augeri: Yeah.

Vicky Nevin: —fuel to the office? And it’s raised a lot of questions that we don’t have the answers to yet.

John-Paul Augeri: Yeah.

Vicky Nevin: And then at the same time, the external factors around flexibility, around sustainability, we haven’t mentioned yet—

John-Paul Augeri: Yeah.

Vicky Nevin: —which is another very important aspect at Microsoft. We announced last year our goal to be carbon-negative by 2030.

John-Paul Augeri: 2030, yeah.

Vicky Nevin: And each month, we do an internal report which shows how we’re progressing towards that. And in the benefits space, a lot of that is around the company car offerings.

John-Paul Augeri: Mm-hmm.

Vicky Nevin: We want to be switching to only offering electric vehicles.

John-Paul Augeri: Yeah.

Vicky Nevin: By a certain date. But then the market has kind of—is prohibiting moving to that—

John-Paul Augeri: Right.

Vicky Nevin: —any time soon. Some countries have no charging infrastructure, so we have to offer—

John-Paul Augeri: This is it.

Vicky Nevin: —old-fashioned cars.

John-Paul Augeri: Yeah. Well, and again, this is what I think is so fascinating a challenge, hugely challenging. But fascinating about, as you say, how do we—OK, we want to be world-class. We want to, again, we want to focus on carbon, but there isn’t necessarily a market, that can—you know, help us execute. So how do we live by these principles?

Vicky Nevin: Yes.

John-Paul Augeri: But how do we get creative around that, and how do we achieve this consistency when again, on the ground, the opportunities are maybe different to what you have in the U.S., or separate markets—

Vicky Nevin: Yeah, consistency is such—a word I probably use 10 times a day. Trying to marry global consistency up with country reality is my—is our constant pressure—

John-Paul Augeri: Yeah.

Vicky Nevin: —I think, in the international space.

John-Paul Augeri: Yeah.

Vicky Nevin: We love to aspire to have a globally consistent world, where we all have the same access to the same resources, and employee experience. But the reality is we can’t do that everywhere.

John-Paul Augeri: Yeah.

Vicky Nevin: The socioeconomic or political situation in each country is different, and you have to tailor things, the employee offering around that, so—

John-Paul Augeri: That’s right.

Vicky Nevin: But then it’s communicating kind of back to our leadership team, that while we aspire to the same thing, the reality might not—

John-Paul Augeri: Yeah.

Vicky Nevin: —be the same.

John-Paul Augeri: Well, I imagine to employees as well, who may hear—

Vicky Nevin: Yeah.

John-Paul Augeri: —OK, I hear these words, but what do they actually mean?

Vicky Nevin: Yes.

John-Paul Augeri: What about my reimbursement for this thing that’s important to me, and all that—?

Vicky Nevin: It’s especially highlighted by employees, if they’re moving countries or they have colleagues in different countries and they’re comparing—

John-Paul Augeri: That’s right, that’s right.

Vicky Nevin: —what they’re allowed to reimburse or what they get paid for, and yeah.

John-Paul Augeri: Thank you, Vicky, thank you so much. Just one more question, I think. If you had your crystal ball out—how do you see international benefits? Again, you’ve touched on a lot of this, but where do you aim to be, again, say, in a three-year horizon?

Vicky Nevin: From a team perspective—

John-Paul Augeri: Mm-hmm.

Vicky Nevin: —I kind of believe the team will be a lot more technically experienced—

John-Paul Augeri: Mm-hmm.

Vicky Nevin: —from a benefit program perspective. So we’re developing that experience internally, or hiring people externally that have got that experience.

John-Paul Augeri: Yeah.

Vicky Nevin: So they can take on more of the technical aspects of benefits management.

John-Paul Augeri: Yeah.

Vicky Nevin: To help us evolve those programs. People that can work with vendors—

John-Paul Augeri: Yeah.

Vicky Nevin: —and maybe try and scale offerings across regions, like, have one insurer offering medical plans across certain European countries.

John-Paul Augeri: Right.

Vicky Nevin: Just opportunities like that. So from an internal perspective, just yeah, getting the team skilled up to do more technical work.

John-Paul Augeri: Yeah.

Vicky Nevin: And I’d love for us to have really figured out our roles and responsibilities, but within the HR model.

John-Paul Augeri: Yeah.

Vicky Nevin: Because it’s still a little gray and, as we said before, can impact operational kind of efficiencies at times. So that’s my aspiration for the next two to three years. And then externally, in terms of what we’re actually offering to employees, is—yeah, I wish I had a crystal ball.

John-Paul Augeri: Yeah, right.

Vicky Nevin: But I’ve learned, don’t look beyond the year, because the last two years, and the last two or three weeks, have taught us that you just don’t know what’s round the corner. We don’t know what’s going to happen. But build your teams and programs to be agile enough, to be—so you can react, so you can make them sort of flexible to the changing environment, and changing needs of our employees.

John-Paul Augeri: Thank you, Vicky, very much. And thank you to all our listeners for joining us. To learn more about our latest thought leadership and services around global benefits, please visit our websites, mbwl-int.com and milliman.com. You’ve been listening to Critical Point, presented by Milliman. If you enjoyed this episode, please rate us five stars on Apple podcasts, or share this episode with your colleagues. We’ll see you next time.