Globe Plotting: Overseas Benefits Require Research, Careful Strategy
As more small and midsize U.S. businesses take the plunge into overseas markets, HR leaders are learning how to shape their company's compensation and culture to recruit and retain the best workers globally.
About 23 percent of small and midsize companies do business internationally, bringing in a whopping $1.7 trillion in revenues from international operations, according to a 2011 report published by The Business Journals.
Strong international trade and globalization can lead to the need for more overseas staffing. A poll by the Hackett Group predicts U.S. and European companies will move 750,000 more jobs in information technology and financial services to other parts of the world by 2016 to take advantage of lower operating costs, according to a report in Human Resource Executive Online.
While overseas staffing can offer companies the promise of lower costs, it shares some of the same challenges created by a domestic workforce, experts say. That includes the need to craft solid benefits that will attract and keep top talent.
In the future, "benefits will be an important battlefield in the domestic employee market and also in the attraction of foreign nationals, whether they be American or not, to the employer," said Sheldon Kenton of Cigna Global Health Benefits in a recent interview with Employee Benefit News.
The secret to international benefit success often hinges on understanding the economic and cultural nuances of the host country, Imran A. Qureshi of Towers Watson told EBN.
"You have to look at the total picture; you've got to look at what's being provided by the government, by the individual on their own and by the employer," Qureshi said, adding that employers shouldn't just take their benefit package for their American workers and simply offer the same to overseas employees.
Health benefits are always desirable, no matter the location, experts note. However, the difference in heath costs and trends among nations requires employers to take special care when creating the plan design and coverage. For instance, HIV testing is considered essential in any benefits package in South Africa, while in India -- a nation with a growing pool of talented workers -- employers may want to offer more comprehensive health benefits to compensate for the country's weak public health system, experts say.
Employers also may be wise to take note of what native companies are doing. A recent study by MetLife noted that employers in different nations have varying priorities when it comes to their benefits and workforce.
The study found that companies in established economies, such as the United Kingdom and Australia, rank the retention of employees as the primary goal of their benefits package. Companies in emerging economies -- including Brazil, India and Mexico -- see their benefits as ways to increase job satisfaction or productivity, the study found.