10 Questions for Strategic Global Benefits Management

Transcription

1 10 Questions for Strategic Global Benefits Management Stephanie Sterling International Benefits Lead Orica Watkins, Colorado The opinions expressed in this presentation are those of the speaker. The International Society and International Foundation disclaim responsibility for views expressed and statements made by the program speakers. 9C-1

2 Objectives To gain an understanding of: How to develop a philosophy and strategy for global benefits by asking the right questions Ways to use benefits to support your business around the world What s different about benefits outside of North America 9C-2

3 1. What does our business need globally? A global benefits philosophy should reflect the needs of the company as a whole Principles should be broad but provide guidance in future decision making Balance between global standardization and local customization Consider where this philosophy needs to be applied to existing practices Example: Our global benefits strategy is to provide compliant and costeffective benefit programs measured as competitive against current market norms at the 50th percentile. Our future goal will be to harmonize existing benefit packages in each country under a one country, one plan concept. 9C-3

4 2. What is a benefit? The answer is more complicated outside of North America, and the answer will vary between companies and countries The line between compensation and benefits can be blurred Many cultures norms include what we would view as non-traditional benefits Our standard package of M/D/V/STD/LTD/Life doesn t apply What we call voluntary benefits are uncommon Ask in many different ways to get the full picture Use market data on prevalent benefits as a starting point Often no supplementary benefits are prevalent Fully-insured benefits are much more common even for larger groups 9C-4

5 3. What is currently in place? Evaluate compliance with statutory benefits, pension liabilities, supplementary insurance benefits, noninsurance benefits, gifts, service awards Note that many things we consider comp/rem may be called a benefit, e.g., 13th or 14th month payments, bonuses, housing allowances, car allowances Estimate costs, both external (e.g., premiums paid) and internal (e.g., time local staff spends on administration or problem solving) Connect with local vendors and brokers When was the last time the policies were marketed to other insurers? Why were these partners chosen/maintained? 9C-5

6 3. What is currently in place? Evaluate natural pooling opportunities Insurance pools are groups of local insurance policies within the same international insurance network Generali, IGP, Maxis, etc. Require minimum global premium amount If a pooled policy has a favorable loss ratio, the parent insurer rebates a portion of the profit to the company Also offers more leverage when negotiating locally Pools differ from captives, which are a means of selfinsuring many types of insurance, and may be used by your risk department if your company is large 9C-6

7 4. What does our business need in each market? It is crucial to communicate with and be a resource for local management to adapt to changing business needs Labor markets can vary not just country by country, but between regions or metropolitan areas One size fits all may not serve your business needs Consider who your comparator group should be in each area given labor market conditions Note this during union negotiations especially 9C-7

8 5. Who is on my team? Who can serve in a global capacity? Regional? Assess the need for a global brokerage relationship or limited global consulting support Assess capacity of current team to manage global benefits, maintain holistic data, etc. Who is on the ground? Assess the need for local brokers based on: Local HR team expertise Unique features of the local insurance market Hands-on support needed by local sites How are benefits being managed and administered currently? 9C-8

9 6. Who makes decisions and how? Implement global governance structure and delegation of authority Determine how has responsibility for decisions on renewals, vendor changes, benefit changes, adding/removing benefits, pooling a benefit, etc. Can utilize thresholds which trigger global attention What is important to govern centrally and what should be left up to locals? Determine the intention of global governance 9C-9

10 Sample Approvals Matrix 9C-10

11 7. How much data do we need to maintain? Information management and financial reporting needs Global brokers/consultants offer benefits data management systems (e.g., Mercer Gold+, Aon Hewitt Greater Insight, etc.) Offer centralized document library, standardized data fields for aggregate reporting Data population is often not included as a service unless they have a local BOR Obtaining information from insurers or brokers can be more difficult outside North America Language barrier Lack of transparency Utilization reporting is rare Global pensions liabilities Global insurance spend 9C-11

12 8. How are our emerging markets unique? Benefits often vary significantly from what we would consider a standard package Gifts in kind, fully subsidized medical aid, housing subsidies or building materials Benefits can vary significantly within employee groups Status benefits and perqs Significant differences in union-negotiated benefits Review local labor regulations affecting benefits Be aware of vendor reliability, lack of insurance regulation, and very different employee priorities Ask what is valued by locals General inflation and medical trend can be very high 9C-12

13 9. What will be different? More than you expect! Be ready for: Differences in communication Variance in formality, directness, Unfamiliar terminology The North American sense of urgency is not shared worldwide Different processes Requiring signature by someone in-country with a special stamp or chop Processing the renewal only after the renewal date passes Paper claim forms collected by local insurer reps during onsite visits Renewal increase determined by national BOB 9C-13

14 9. What will be different? Be ready for: Potential lack of transparency Brokers hesitant to share commission % Inflexibility in changing benefits Acquired rights/tupe Benefits diminution prohibition Non-traditional benefits Employer-sponsored wellness is quite undeveloped 9C-14

15 10. Where do we start? If your company is expanding into a new country Obtain market data Learn about the local labor market and what your business needs from it Partner with a trusted broker to evaluate vendors and plans Assess the difficulty in changing benefits before implementing generous policies If your company has benefits in various countries already Start with an inventory and obtain basic data Compare existing benefits to market Assess how well the benefits are serving your company s goals in each country Make a plan to align those which are not meeting needs See where natural opportunities exist to partner with regional/global resources of brokers and vendors 9C-15

16 Takeaways How to develop a philosophy and strategy for global benefits Ways to use benefits to support your business in each unique foreign market What s different about benefits outside of North America 9C-16

17 10 Questions for Strategic Benefits Management Stephanie Sterling 1. What does our business need globally? 2. What is a benefit? 3. What is currently in place in each market? 4. What does our business need in each market? 5. Who is on my team? 9C-17

18 6. Who makes decisions and how? 7. How much data do we need to maintain? 8. How are our emerging markets unique?. 9. What will be different? 10. Where do we start? Takeaways: 9C-18