Zarah ChoudharyOnly 35% of companies with overseas employees benchmark their benefits to ensure they comply with local legislation, according to research from Towergate Employee Benefits.
Legislation regarding mandatory benefits differs in virtually every country and can change regularly, making it difficult for employers to stay compliant.
In some cases, working visas are only granted if the correct healthcare cover is in place, highlighting the need for regular benchmarking.
Sarah Dennis, head of international at Towergate Employee Benefits, said benchmarking helped ensure that benefits packages for employees working overseas aligned with legal and regulatory requirements in each country.
It can identify gaps between current practices and industry standards or regulatory requirements, helping employers mitigate the risks of non-compliance.
While 79% of employers benchmarked to ensure their benefits are competitive, Dennis said it is important that this benchmarking is thorough.
It must not only assess what benefits are needed to attract and retain talent but also ensure that mandatory benefits are included.
At the same time, some benefits do not need to be provided.
With more employers hiring local nationals rather than relocating employees, some state-funded support may already be available.
Benchmarking can also help employers stay up to date with best practices and emerging trends.
For example, in Italy, many benefits were traditionally covered by the state system, but with more multinational companies relocating employees there, local employers are now expected to offer more comprehensive packages.
This can create a domino effect of rising expectations, so it is important not to overcompensate by offering benefits that are already provided by Government schemes.
Dennis also noted that employers expanding into new countries, even with a small number of employees or just one, must ensure their benefits are compliant.
She said overseas assignments can grow quickly, so it is important to have the basics in place early on.
Employers are advised to benchmark by region, country, sector and size, and remain adaptable.
In the USA, for example, benchmarking needs to be done by industry sector and by state, rather than nationally.
Working with advisers who have specialist local knowledge is recommended.
Dennis concluded: “International benefits packages are increasingly complex, and this reflects the changing trends in recruiting, such as employing local nationals.
“Benchmarking should be an ongoing process and will then allow for continuous improvement and unbroken compliance.
“Benchmarking can be an incredibly useful exercise, but it must incorporate the right components to be of genuine use.”
