Taking an optimistic view of the future may mean expansion. If you’re considering expanding offshore to one—or several—other countries, there are many details you’ll need to work out about how best to reward employees. We spoke with an expert on global benefits, Gregory Glashan, a principal and consulting actuary at Buck Consultants (www.buckconsultants.com), to learn more.
Glashan spoke about three broad categories of employees for whom you may need to design benefits. The first is an employee who lives and works permanently outside the United States. The bumper sticker expression “Think Globally, Act Locally” takes on a new meaning when you apply it to their employee benefits.
“Remember that the benefit level you provide is designed primarily to compete in the market you’re operating in,” he says. “So when you’re designing the plan, you’re not necessarily comparing all employees in all locations against each other. Instead, you might decide you want to be in the 50th percentile in each country, or in your industry. Benefits won’t be identical in every country.”
“Remember that how you motivate and retain people in each country will vary,” Glashan continues. A primary difference from country to country is, of course, health insurance.
“Generally, you’ll find that there is less emphasis on health care in other countries than there is in the U.S.,” he explains. “In some countries, you have national health care providing everything, and therefore employer involvement in health care is very limited. But in others, the employer supplement can be important.”
When you’re designing programs to benefit expatriates or American employees who will live temporarily overseas, think about how you can integrate the comforts of home. “Some ex-pats just won’t use the local healthcare providers. In some countries that’s a good decision, and in others it is not necessary … but a lot of ex-pats want to come home when they need health care.
“Some companies offer employees emergency repatriation, which pays for the employee to be returned to the United States for care. If the ex-pats are working in a country where the level of sophistication in health care is not very good, that kind of coverage would be very important. If the employee is based in London or Western Europe, it would be less important.”
Finally, there are employees who travel offshore on company business only occasionally. “If you have people who are coming into the U.S. headquarters, for example, you may want to have healthcare coverage for them when they’re in the U.S.
“Conversely, if a U.S. employee who is covered by his or her local HMO makes a visit to your office in France and suddenly needs health care, that HMO coverage is probably not going to help very much. You may need to have some sort of special contract.”