24 Aug With Global Mobility On the Rise, Businesses Must Rethink Benefits Strategies

With the resurgence of global mobility post-COVID-19, businesses are being challenged to align their benefits strategies with the new world of work and evolving employee expectations. Driven by the need to attract and retain talent across borders, companies are reshaping their benefits to be more cohesive, equitable, and globally aligned. Nowhere is this shift more pronounced than in health and medical benefits, where heightened anxiety around accessing healthcare has pushed employers to rethink their offerings.

Benefits are now the second-highest employee-related cost after wages, and these expenses are rising rapidly. Health insurance premiums, the most expensive employer-sponsored benefit, are projected to increase by over 6% in 2024. 

According to the Kaiser Family Foundation, Affordable Care Act marketplace rate filings are expected to rise by 2% to 10%, with some states increasing small group rates by up to 25%. For businesses seeking to manage these escalating costs, Professional Employer Organizations (PEOs) offer access to more competitive healthcare plans. However, PEOs can also pose challenges, as some increase rates significantly after the first year, leading to unexpected financial burdens. Therefore, selecting the right PEO is critical for businesses looking to maintain cost control and transparency.

Navigating multinational benefits in this new era requires strategic thinking for global mobility professionals and employers. Consistency is essential; disparities between benefits packages can lead to dissatisfaction and morale issues, especially when employees on different assignments compare their coverage. For example, a six-month assignment with full benefits versus a 12-month assignment with reduced benefits can create tension and a sense of inequity among employees. Aligning benefits globally ensures fairness and helps maintain employee trust and engagement.

Striking the right balance between global and local benefits is another key challenge. While local healthcare provision may be suitable for short-term assignments, global policies often provide a better fit for longer or multi-location stays. 

For instance, a two-year assignment in one location might initially seem suited to local coverage, but if followed by another assignment in a different region, transitioning to a global policy may be more practical. Employers must weigh these long-term considerations carefully to avoid situations where employees feel shortchanged by less generous local benefits.

How technology plays its role in managing global benefits

Technology is playing a transformative role in managing global benefits. With the rising costs of global healthcare coverage, businesses are turning to digital solutions such as global employee assistance programs, virtual GPs, and wellbeing apps that can be accessed across borders. 

These technologies not only provide consistent support but also engage employees in their health and wellness, offering a cost-effective way to enhance benefits packages without the heavy price tag of traditional healthcare plans.

Diversity, equity, and inclusion (DEI) have become non-negotiable elements of modern benefits strategies. However, applying DEI principles on a global scale is not without challenges. For example, maternity cover is often an add-on rather than a standard feature of international medical insurance policies, and costs can vary dramatically by location. 

Employers must ensure that benefits packages meet the needs of all genders and are sensitive to the diverse locations in which employees work. Also, there are regions where local laws present hurdles for equitable benefits, such as limited support for same-sex couples or mental health services, but these barriers should not deter companies from striving to offer inclusive benefits.

Environmental, social, and governance (ESG) considerations are also increasingly influencing global benefits strategies. Employees are becoming more conscious of their environmental impact, and employers are expected to incorporate sustainable practices, even in benefits offerings. 

This could involve selecting providers with strong ESG commitments or integrating tools that help employees track their carbon footprints while on assignments. For instance, some companies offer apps that allow employees to monitor the environmental impact of the brands they spend on, promoting a culture of sustainability.

The rise of remote work and “work from anywhere” policies further complicates global benefits strategies. As employees increasingly work across borders, companies must navigate a web of local and global contracts, each with distinct implications for benefits. A US contract, for example, might offer comprehensive health coverage for pre-existing conditions, while a local contract in another country may require full underwriting. Understanding these nuances is essential for maintaining equitable and adequate benefits.

How inflation adds complexity 

Inflation adds another layer of complexity, particularly in medical provision, where costs are rising at an average rate of 8-10% due to increased energy and labor costs. The cost-of-living crisis exacerbates these issues, as medical facilities face higher operational costs, leading to increased insurance claims. However, the insurance market is adapting, with new cost-containment strategies emerging that go beyond merely cutting back on benefits or adding excesses.

As global mobility continues to recover and evolve, businesses must recognize that employee expectations around benefits have shifted. Aligning benefits globally is no longer just an option but a necessity. By striving for consistency, leveraging technology, embracing DEI, and considering long-term impacts, companies can build benefits strategies that meet the needs of a diverse, mobile workforce and remain competitive in the global talent market.