EXCLUSIVE: Seven in 10 (70%) employers have effective global benefits strategies and structures, according to research by professional services firm Aon.
Its Global benefits governance and operations study 2018-2019, which surveyed more than 200 multinational organisations with workforces of between 10,000 and 100,000, also found that 60% want to create a financial wellbeing or health and wellbeing strategy, while 40% wish to get information on opportunities from multi-country pooling and global underwriting.
Other evolving areas of focus for global employers include collecting information on employee value and projected pensions (50%), looking to adapt benefits to suit millennials and other sub-groups (55%) and implementing a global benefits management system (60%).
Jim Tindale, partner at Aon, said: “What is clear from the latest study is that there is a strong desire to implement best practice global governance, with 90% of [organisations] wanting to make further progress and 74% of them aiming to achieve best practice global governance by 2021. Encouragingly, [employers] achieving a better state of affairs are also signalling that they are increasingly able to demonstrate the value from having done so.”
Three-quarters (75%) of respondents indicated that they now have defined contribution (DC) pension policies that are at least generally effective, while 64% are monitoring DC risks and opportunities. Around 50% of worldwide employers state that they operate best practice for DB retirement; 45% stated that they do this for DC retirement plans and 40% do so regarding health benefits. Approximately a third (32%) believe they operate best practice for other types of benefits.
Among those employers defined as operating ‘best practice’, 90% describe themselves as at least somewhat centralised in their operations, and 81% have a common corporate benefits strategy. A further 74% have a common corporate talent strategy, and 60% have a benefits delivery centre of excellence. Across all respondents, 81% cite that a single corporate brand is largely in place and 57% have a common corporate benefits strategy.
Around half (52%) of all respondents state that a lack of central resources provides a challenge to benefits governance and operations. Other challenges include a lack of expertise in smaller countries (69%), a lack of direct budget (50%) and a lack of suitable technology (50%). Also, 40% identify that being unable to demonstrate clear value is a barrier to implementing best practice, while 46% blame a decentralised HR structure.
Approximately three-quarters (73%) of respondents operating best practice stated that they are confident they have aligned their benefits plan with global policies, and 70% are confident that their benefits provide a fair level of coverage for all. This compares to 42% and 34%, respectively, in organisations that are not conducting best practice.
Tindale added: “Irrespective of their individual progress, nearly all respondents to our study want to continue to broaden and deepen their involvement in the design, financing and operations of their benefits arrangements around the world.
“However, fewer have attained best practice levels than had hoped to do so; 31% compared to 80% [that] aimed to do so by 2018 in our previous study.”