Crafting a Global Rewards Strategy

Crafting a Global Rewards Strategy – An Insurance Expert’s Perspective

Expat talent is valuable, expensive and critical to retain if your company is either expanding overseas or already employing people abroad. Almost all global rewards and global mobility managers and senior executives get this, but often, many multinationals don’t put the work and resources into implementation. Of course, we often see this in the insurance space where precious global employees are put on substandard international group insurance plans or domestic plans in their destination countries.

Crafting a Global Rewards Strategy

We have put together this article to show the importance of crafting an effective global rewards strategy for multinational organizations. This includes for-profit companies but also Non-Governmental Organizations, missionary groups, governments and overseas universities.

Why Have a Robust Global Rewards Plan?

Global business realities require a robust global rewards strategy. These strategies encompass a range of compensation and benefits options, from salary packages to employee perks, all designed to attract and retain top talent globally. Global human resource professionals need to include an insurance expert’s perspective, as this can give your company valuable insights into creating a global rewards strategy that not only ensures competitiveness but also mitigates risks and maximizes value for the multinational company and its employees.

Global rewards

What is the Global Rewards Landscape?

Global rewards involve various elements, including base salaries, bonuses, stock options, retirement benefits, global healthcare, medical evacuation, health and wellness programs, and more. It is critical to have a global rewards strategy that aims to strike a balance between being competitive in attracting talent and controlling costs.

We have put together some vital considerations for international employers:

  1. Calibration with Business Objectives: The global rewards strategy should align with the company’s overall business goals, ensuring that compensation packages motivate employees to drive the organization’s success.
  2. Risk Management: Assessing and mitigating risks associated with global rewards is crucial. An international expat insurance consultant from our firm can provide insights into insurance options to protect against unexpected costs, such as employee health insurance or liability insurance for expatriate staff. Another consideration is special risk coverage, such as kidnap and ransom coverage.
  3. Flexibility and Customization: One size does not fit all in a multinational context. Tailoring rewards to suit different geographic regions, industries, and roles is essential. Insurance experts can help identify insurance benefits that are most relevant and valued by employees in various locations.
  4. Local Market Competitiveness: HR Managers need to make sure that compensation and benefits packages are competitive within each local market where your company operates. It often makes sense to regularly benchmark salaries and benefits against industry standards to attract and retain top talent.
  5. Cost of Living Adjustments: Adjust salaries and benefits based on the cost of living in each location. Employees in high-cost cities such as New York, Hong Kong, or even Vancouver may require additional compensation to maintain their standard of living.
  6. Long-Term Sustainability: Develop a rewards strategy that is sustainable over the long term. Has your company considered how global economic trends, legislative changes, and evolving employee expectations might impact your rewards program in the future?

Global Medical Insurance Premiums

Components of a Comprehensive Global Rewards Strategy

We have put together ten considerations for global human resource managers that employ internationally mobile expats. There are many to consider, but here are some key items to think about when crafting your global rewards strategy:

  1. Retirement Benefits: Offer a robust retirement savings plan that adheres to local regulations while providing employees with a comfortable future. Insurance experts can assist in selecting appropriate retirement plans and pension funds.
  2. Stock and Equity: Consider offering stock options or equity-based compensation, but be aware of the tax implications in various jurisdictions. Insurance experts can help evaluate the tax consequences and recommend strategies to mitigate them. It is highly recommended that your organization consult tax and legal professionals.
  3. Property & Moving Insurance: We often get requests from international employers who need to get an easy-to-operate and effective general insurance package for their employees who want to be covered should their overseas possessions get damaged or stolen during transit or when they settle in. We don’t provide this coverage, but we can often recommend a source.
  4. Tax Planning Service: Most expat employers will provide an expat tax planning service for their overseas expat employees. This is because tax planning when working abroad can be very complex, especially for American citizens.
  5. Competitive Compensation: Ensure that base salaries and bonuses are competitive in each region where the company operates. Use market data and benchmarking to guide compensation decisions.
  6. Schooling for Children: Some expat employers will provide an allowance to pay for private schools in the expat destination city but also guide on choosing the right school for their kids.
  7. A Comprehensive International Group Insurance Plan: If your global mobility team is serious about meeting your duty of care, a high-quality global benefit plan is vital. Working with a domestic benefits advisor just won’t cut it as they don’t have the expertise, knowledge or contacts necessary.
  8. Health and Wellness: Provide comprehensive health insurance that covers the unique healthcare needs of employees in different countries. Consult with experts to navigate international health insurance plans and ensure coverage is adequate and cost-effective.
  9. Perks and Benefits: Explore additional perks and benefits such as flexible work arrangements, professional development opportunities, and international employee assistance programs. These can significantly enhance the overall rewards package.
  10. Equity & Fairness: Companies should make sure that their global rewards practices and policies are mindful of perceived fairness, such as, for example, between home-based and office-based employees posted abroad. They should also integrate any Diversity, Equity and Inclusion (DEI) policies while keeping in mind that cultural practices abroad are not always the same in each country.

Risk Mitigation in Global Rewards

Risk mitigation is undoubtedly a buzzword we hear often in the expat employer space. When a company wants to protect their bottom line and reputation, it is vital to remember that meeting your duty of care means a risk mitigation strategy in global rewards. Here are a few to consider:

  1. Legal and Regulatory Compliance: Multinational companies must navigate various employment laws and regulations globally. An insurance expert can ensure that reward strategies comply with local labor and employment regulations.
  2. Currency and Exchange Rate Risks: Fluctuations in currency exchange rates can impact compensation and benefit payments. Insurance experts can recommend strategies to hedge against currency risks.
  3. International Insurance Solutions: Evaluate insurance options to protect against unexpected events, such as the sudden illness of an employee working abroad. This includes health, life, evacuation, and disability insurance tailored to international assignments. We have worked with expat employers around the globe so we have extensive experience in crafting global benefit plans for diverse employee populations in some of the most challenging regions and countries, including those impacted by civil strife and war.

Expat Resources

Some Final Comments For Expat Employers

In today’s competitive global business environment, crafting global rewards strategy is not only expected but also vital if your team wants to attract and retain top international talent while maintaining fiscal responsibility. We all need to rely on outside resources, such as expat tax planners and relocation providers. Of course, collaboration with an expat insurance specialist is invaluable in navigating the complexities of risk management, compliance, and compensation planning.

We hope that your organization, which is expanding abroad or already an expat employer, can align global rewards with business objectives, offer competitive compensation, and address the unique needs of employees in different regions; multinational enterprises can foster a motivated and engaged workforce that contributes to sustained success.

If you think we have missed any items, please get in touch with us to discuss them, and we can add them to this article. We would, of course, also like to invite your organization to reach out to us to discuss your global benefits plan requirements. Our firms works with clients in just about every employment sector, including universities, mining, oil and gas, food services, investments, engineering, diplomatic, missionary, aid organizations and many more.