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Why Global Benefit Strategies Fail [& How Multinational Companies Can Fix It]
Omnipresent
The global employment platform created by global employment experts. Compliantly hire & manage employees worldwide.
In the US, the year 2022 was dubbed “The Great Resignation,” with more than 50 million workers voluntarily quitting their jobs in search of greener pastures.
Of the workers who joined this corporate exodus, approximately 40% cited the importance of employee benefits and the desire for better and different benefits packages as a pivotal factor in their decision.
Put simply, in the competitive hiring arena, global employee benefits aren't just an employee perk—they're an essential incentive leading companies use to retain talented employees around the world.
Consequently, companies are under increased pressure to assemble an attractive and comprehensive benefits package, one that balances employee satisfaction and desires with the company's budgeted spending account.
This balancing act becomes all the more difficult for businesses with a global workforce. While they can follow a general global benefits strategy framework, each country has unique regulations and cultural nuances that must be accounted for.
Why global benefits strategies fail
When you take a company global, your benefits strategy needs to be truly global in nature too.
But companies which don’t start with that global mindset we discussed in the first chapter will make any of the following mistakes
Failing to be compliant with local benefits laws
Overlooking local compliance requirements can lead to serious legal issues, fines, and reputational damage.
Let’s look at the example of a US-based company expanding into Brazil. It fails to meet Brazil’s statutory minimum of 120 days of maternity leave for female employees.
This non-compliance not only results in penalties but also damages trust with new employees, who feel their rights are being disregarded.
The one size fits all approach
Applying a one-size-fits-all approach or providing inconsistent benefits across regions can lead to poor engagement and dissatisfaction.
For example, a U.S. based tech company expanding to Europe might overlook mandatory benefits like extended parental leave or the right to switch off.
The one size fits all approach means you’re less likely to offer competitive benefits in markets where you’re trying to hire and retain key staff members.
If your local competitors are offering more attractive perks such as flexible work options, enhanced parental leave, and robust wellness programmes, existing employees may start looking elsewhere for better opportunities.
Failures in cost control and financial planning
A company might choose benefits that are too costly or unnecessary for specific regions due to a lack of understanding of local market practices. A business could end up unnecessarily paying premium rates for local benefits on behalf of their employees.
For instance, offering fully comprehensive private health insurance in a country where public healthcare is of high quality and preferred could result in wasted expenditure.
Lacking this vital local knowledge of the benefits market can result in long-term budget shortfalls.
How an Employer of Record can help you build a global benefits strategy
In our time working with multinational companies expanding into new markets, we’ve found that successful global benefits strategies will.
In previous chapters, we’ve discussed how an Employer of Record can allow you to set up a global workforce more flexibly than using an entity and more compliantly than using contractors.
Expertise in local compliance
Employer of Record providers are more likely to understand local labour laws and regulations across multiple countries, ensuring your benefits package meets all legal requirements without the need for extensive internal research.
An EOR provider is better placed to design benefits that align with local market practices and employee expectations, avoiding a one-size-fits-all approach and boosting satisfaction across different regions.
Streamlined benefits administration
An EOR centralises benefits administration, reducing the administrative burden on your HR team and minimising errors through a single platform.
Cost control & financial planning
EORs leverage their buying power to negotiate better rates with local providers and offer cost-effective benefit solutions, helping you avoid overspending and budget issues.
Agility & flexibility
EORs proactively adapt to changes in local laws, economic conditions, and employee needs, keeping your benefits strategy competitive and compliant.
Reduced risk and liability
EORs take on the legal responsibility for compliance with local employment laws, protecting your company from legal risks and potential disputes.
The Omni-Outlook
The trans-Atlantic playbook: how US businesses should expand into Europe
As businesses are increasingly crossing borders, understanding the intricacies of international law and market dynamics is crucial.
In this episode of the Global Workforce Podcast, David Bates, Partner at Taylor Wessing, discusses the complexities of expanding into the European market, highlighting key differences in regulations and cultural norms.
Listen to (or watch) the podcast here.
Check out our Global Benefits library
We’ve published a host of content about how to build a global benefits strategy. If you’ve found this newsletter helpful, you read some more of our resources below.
In other global employment news…
About us
Global Team Trends is brought to you by Omnipresent, the global employment platform & Employer of Record that allows you to employ anyone, anywhere, without having to set up an entity.
Designed, built and supported by global employment experts, Omnipresent takes care of your international employees and contractors. You don't have to worry about payroll, HR, or compliance issues, making it easier, faster, and safer to expand your business internationally.
Get in touch if you want to know more about who we are and how we can help you.