With close to 70% of the world's purchasing power outside the U.S., the chances are your company will, at some point, expand into new countries. Depending on your background, you may or may not have had exposure to benefit practices in different regions of the world. Regardless of what country you expand into, there are significant differences in retirement and health care models and delivery between the U.S. and other countries.
When looking at a benefit strategy outside of the United States, it's important to be flexible enough to accommodate local norms while maintaining regulatory compliance. At the same time, you must identify the level to which you will maintain consistency in your global practice.
Here are five suggestions to get you started:
1. Make sure you have a strategy. Prior to expansion, plan your strategy. What will your compensation and benefits mix be? Do you want to meet the market or do you plan on using benefits as a differentiator? Ensure that you have a clearly articulated vision and benefits philosophy. There are several countries where, once a benefit is put in, it cannot be taken away but instead becomes an acquired right. Additionally, if you take a separate approach in every country you grow into, over time, you will end up with a disjointed program that may become difficult to fix.
2. Learn the basics. A simple Web search should provide you with some information about the health care and retirement systems. Also, network with colleagues who might know about the country you're expanding into and pick their brains for information. And don't forget about resources such as LinkedIn groups or Quora, where you can pose a question and have others outside your network share information.
3. Check with your local broker or consultant. Many U.S.-based brokers or consultants either have connections to global broker associations or provide global consulting services themselves. By leveraging your existing relationships, you may be able to work with a partner that already understands your company culture and existing benefits philosophy.
4. Who's handling payroll? Often, when a company first expands into a new country, it hires a third-party vendor to handle payroll. These third-party vendors will often be able to either guide you to select and set up benefit plans or will be able to connect you with a local broker who can help you understand the local market. There are often additional charges for these services, so make sure to get full disclosure on pricing.
5. International brokers may be the right choice. There are several major consulting firms that offer international capabilities. They can help you with services ranging from understanding and setting up local benefit plans and options to building a consistent global benefits strategy.
Once you've determined the best partner to help you through the process of understanding the local marketplace, you'll need to set up your new benefit plans and determine if they will be managed from the local country, from your headquarters or through a shared responsibility between the two. There are pros and cons to each option. Local administration provides you with a deeper understanding of local markets, more awareness of legislative changes and a familiarity with local resources. On the other hand, handling the benefits from headquarters provides you with consistency in total rewards positioning, larger-scale vendor management options and the ability to build economies of scale as you expand into additional countries.
There is no wrong choice in determining the best way to address ongoing plan management, but it's important to take the culture into consideration. For example, if the country has a cultural emphasis on relationships, it might make more sense to allow the plan to be managed locally to help foster and develop those in-country relationships. Throughout your expansion process, it will always be important to take a step back and analyze the cultural impact of any of your decisions.
Contributing Editor Shana Sweeney is an SPHR with more than a decade of experience working in various industries, including high-tech, utilities, manufacturing and health insurance. She can be reached at
