Global employee benefits: Getting it right for every country

The days of international business being the exclusive domain of large multinational corporations are over. In the wake of the pandemic, enterprises of all sizes have discovered the many benefits inherent in employing and contracting workers internationally. Moreover, remote work models have become the order of the day, with companies enjoying improved corporate diversity and productivity as a result of expanding their workforces internationally.

Yet in an environment of increasing global business interaction, the question of how to cement employee retention and improve your chances of attracting top global talent become paramount. One of the keys to unlocking the full potential of overseas business expansion is undoubtedly creating a comprehensive package of global employee benefits.

Operating across diverse work cultures and in countries with their own labour and tax laws requires careful consideration of how to maximise the impact of your employee benefits internationally. Tailoring your global employee benefits packages to workers living in different regions, whilst ensuring compliance with regulations and expectations, is possible. Here’s how.

The key advantages of comprehensive benefits packages

Before we dive into the major considerations businesses should make when tailoring their global employee benefits packages to different regions, it may prove useful to first examine why such packages are beneficial. Below is a non-exhaustive list of advantages businesses may enjoy when delivering a quality set of employee benefits to workers living overseas.

• Attracting top global talent: International and remote employee benefits packages tailored to different regional expectations and regulations can help to attract the top talent in each country you operate in, or plan to expand into. With the ability to work from anywhere, remote employees are likely to carefully compare the benefits packages available to them before deciding which companies to work for.
• Retaining top global talent: In a similar vein, once on board, your team of international employees are more likely to stick around if the benefits packages available to them enable a desirable work-life balance, whilst protecting their health and future financial security. Improving global staff retention helps to reduce costs by minimising the expenses associated with off-boarding and replacing unhappy employees.
• Improving brand reputation: Companies which are considered good to work for, especially for remote and international workers, will likely garner a favourable reputation among the global business community. Quality employee benefits for international workforces can boost the reputational standing of a company not only in the eyes of potential employees, but also for your clients and customers.
• Facilitating greater productivity and employee satisfaction: There is a tangible positive correlation between satisfied and healthy workforces and their productivity on a global scale. Tailoring global employee benefits to each of your operational regions can help to improve employee satisfaction, and thus their overall output.

The challenges of tailoring employee benefits packages to different overseas regions

Of course, you will be unsurprised to learn that the practice of tailoring your international employee benefits packages to different countries and cultures is not without its fair share of challenges. Above and beyond the administrative demands of such a large global operation are the many potential pitfalls associated with offering employee benefits in different regions.

Each of the countries you choose to expand your business into will have its own cultural expectations regarding benefits, as well as a unique set of local labour and tax laws – each of which will impact the allure and compliance of your benefits packages. Moreover, the profitability of your operations abroad may also be impacted by the benefits you choose to offer international recruits.

For example, UK law dictates that all employers of UK citizens must contribute towards their employees’ pensions. In Sweden, employers are legally obliged to offer new parents a combined parental leave of up to 240 days, whilst there is no such standard in the USA. Similarly, whilst it is legally mandatory to pay workers in Belgium both a 13^th and 14^th month salary, the same practice is only customary in Austria, and not practiced at all in the UK.

Some of the other most  important factors to be aware of when tailoring your global employee benefits packages include:

• Tax law compliance: What are the tax laws in the countries you operate in and how will they impact the benefits you offer employees? For example, healthcare in the UK is free and paid for via a combination of employee and employer tax contributions, whereas in the USA it is customary for employers to offer health insurance as part of their benefits packages.
• Labour law compliance: Each different region has its own labour laws, informed by – if not directly copied from – international labour laws. The benefits packages you offer your overseas and remote employees must adhere to the labour laws in their home jurisdiction, in order to avoid financial penalties or, worse, legal action.
• Cultural expectations of fringe benefits: The benefits packages you create can comprise any number of different employee perks, some more useful and/or expected in different regions. Fringe benefits, for example, could include offering access to professional development courses or providing free or discounted gym memberships. It is important to be aware of trends in benefits in your industry, as well as the cultural expectations of these benefits in the regions you operate across.
• Employee classification: Every country has its own rules and metrics defining the status of employees versus independent contractors. Any worker deemed an ‘employee’ of a company, regardless of region, must be afforded the same benefits as the rest of your employees. Contractors, or freelancers, on the other hand, are not necessarily entitled to employee benefits. Be aware of how each region you operate in defines the difference between employees and contractors, as it is your duty to classify each person you employ or contract accurately.
• Employer contributions: Tax law in different countries will also dictate the contributions you must make on your employee’s behalf – be these contributions to pension schemes, health insurance, or social care. A benefits package which is tailored without a firm understanding of contribution obligations can appear clumsy and may even trigger legal or financial penalties.
• Local holidays and vacation days: Different countries, cultures, and religions have their own unique holidays, both local and national. For example, Chinese New Year is one of the major calendar events in East Asia, whilst it goes relatively uncelebrated in Latin America. Similarly, different jurisdictions will set different numbers of holiday days for employees, which may also depend on the employee’s length of service.
• Currency conversion rates: When paying employees bonuses or delivering various perks through your tailored global employee benefits package, it is also important to be aware of conversion rates between your company’s HQ currency and that of the recipient. Failure to incorporate currency conversion rates in your benefits calculations could leave employees feeling shortchanged, if not actually underpaid.
• Any other unique requirements: Are there any other mandatory or expected employee benefits you should be providing to specific groups of employees in each region? I.e., parents, disabled employees, and senior citizens.

What to include in a global employee benefits package

The employee benefits package each company offers its overseas and remote employees will naturally differ, depending on the regions the company operates in as well as the industry and the company’s available resources. (For a little inspiration, check out our article on the top eight companies delivering benefits packages internationally.)

Getting benefits packages right for both employer and employee is, as we’ve outlined above, fundamental to the success of your overseas venture(s), but whilst challenging it is doable – especially with the expert assistance of an Employer of Record (EoR).

If you prefer the DIY method of building a winning global employee benefits package, however, then below is a guide to the various elements you may choose to include in your global benefits offering.

Benefit 1: Health insurance

Employee health insurance won’t always be a requirement, especially in countries like the UK or Denmark where health insurance is free and paid for through tax contributions and government spending. Nevertheless, you could opt to include private healthcare cover and/or insurance as part of your employee benefits for international workers.

Benefit 2: Retirement and pension plans

Employees want to know that their futures are secure, both with their employer and once they retire. Quality international benefits packages should be tailored to offer pension plans and contributions which meet an employee’s expectations, thus giving them peace of mind.

Benefit 3: Paid time off

As aforementioned, different countries have different rules about how much annual leave employees should receive. This is one of the most changeable factors from region to region and should be tailored carefully to ensure all local and national holidays are covered, whilst leaving enough paid time off for your overseas and remote employees to get the downtime they require to remain satisfied and productive workers.

Benefit 4: Parental leave

As discussed briefly above, different countries have different laws governing the amount of parental leave new parents are entitled to (whilst some have no such laws in place). It is firstly important that you tailor your regional benefits packages to comply with parental leave laws in each country. However, it may be prudent to offer an even more attractive paternal leave package by extending leave beyond what an employee’s regional laws dictate, and by making both the maternity and paternity portions of the leave package equal.

Benefit 5: Minimum wage and salaried bonuses

Not every country has a minimum wage law in place – which sets the lowest hourly rate that can legally be paid to any employee – but most do. Your global employee benefits packages must comply with local minimum wage laws, but can be made more attractive by paying over and above this rate. Moreover, whether customary or mandatory, salaried bonuses like 13^th month pay packets can also be folded into your benefits packages.

Benefit 6: Remote work stipend

When working remotely, often from home, employees will naturally incur expenses – such as heating, lighting, and internet usage – which would normally have been covered by office overheads. Offering a remote work stipend to remote employees to help cover these costs is a savvy way to attract and retain the top remote talent.

Benefit 7: Employee satisfaction and wellbeing perks

Last but not least, there are an almost limitless number of additional perks you could choose to offer as part of a global employee benefits package to enhance its attractiveness to current and future recruits. A few of these include:

• Gym memberships
• Subscriptions to meditation and wellness apps
• Team vacations and work retreats
• Subscriptions to language learning apps or courses
• Business books or books pertinent to employee development in your industry
• Mental health counselling services
• Leadership coaching services
• Relocation services and stipends for employees relocating abroad.

Global trends in international employee benefits packages

The type of employee benefits packages multinational companies offer will naturally grow and change as the nature of global business and workplace culture evolves. Just as important as getting your benefits packages right for employees in different regions is staying ahead of the times. Below are some of the core trends in global employee benefits in 2024 and beyond.

• Wellness initiatives: Employee wellness is at the forefront of benefits packages in international business right now. Caring for remote workers can be much more challenging than caring for office-based employees. Providing wellness perks like gym memberships, counselling for mental healthcare, and vouchers for massage and spa days can help to keep your overseas employees healthy, happy, and motivated.
• Flexibility and customisation: Remote work is attractive to employees because it can afford them a healthier work-life balance. As such, baking the opportunity for flexibility and customisation into the benefits packages you offer is another major HR trend of the mid-2020s.
• Technology: It is worth researching how best to utilise available technologies to deliver your global employee benefits packages. Online, user-friendly platforms enable employees to access and manage their benefits at any time, from anywhere in the world.
• Cultural sensitivity: Equality, diversity and inclusion are the cornerstones of 21^st century business, with more and more global enterprises coming to appreciate the positive effects these values can have on their business’s international standing and profitability. As such, cultural sensitivity is a key trend of benefits tailoring.
• Sustainability: Lastly, and similarly, the ongoing climate crisis places the onus of sustainability and socially conscious practice on those businesses conducting their affairs internationally. Companies are today incorporating sustainability into their global employee benefits packages by offering things like eco-friendly commuting stipends, organising community engagement activities, and even ethical pension funds.

Optimise your global employee benefits packages with Mauve

Whilst almost any business can, nowadays, enjoy the advantages of expanding their operations abroad by employing overseas, not all businesses have the means nor time to develop compliant, attractive, and cost-effective employee benefits packages – let alone to tailor these packages to different regions and different employees.

Partnering with an Employer of Record takes the burden of tailoring global employee benefits packages off of your shoulders, and places it in the capable hands of the experts. Mauve Group has over 28 years of experience assisting businesses of all sizes to compliantly hire, pay, and deliver benefits to workforces all around the world.

To optimise the impact and cost-effectiveness of your global employee benefits packages today, attracting and retaining top talent while remaining 100% compliant with regional laws and expectations, explore Mauve’s EoR services today.