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“More and more companies want to have a better line of sight and at least some control over the benefits decisions made by their local operations,” said Amol Mhatre, global benefits strategy and solutions leader at Aon Hewitt. “While financial drivers play a big role, companies want to do this for a variety of other reasons, including managing reputational risks and resource constraints on the ground. Companies that want to design more sustainable benefits programs need to implement a more formalized governance structure to manage financial and operational costs and risks.” The study found multinational companies currently face differing challenges in mature and emerging markets. While 83% of respondents reported that active cost management and sluggish growth are a major business issue affecting their company in mature markets, just 37% said this is the case for emerging markets. By contrast, 75% of organizations are investing for growth in emerging markets where they currently face talent shortages and salary inflation, and 64% said employees in emerging markets are increasingly demanding new and higher benefits. “Globalization poses a unique set of strategic and compliance challenges for multinational employer-sponsors of benefit plans. To continue their commitment to health coverage and retirement security for their employees, they must manage the growing risks associated with plan sponsorship,” said James Klein, president of the American Benefits Institute. “It appears that centralization of corporate benefits governance is already helping to mitigate some of these challenges by improving communication between headquarters and worldwide operations.” The study was based on insights from global benefits directors at 140 of the largest multinational companies based in the U.S. and Europe.
“More and more companies want to have a better line of sight and at least some control over the benefits decisions made by their local operations,” said Amol Mhatre, global benefits strategy and solutions leader at Aon Hewitt. “While financial drivers play a big role, companies want to do this for a variety of other reasons, including managing reputational risks and resource constraints on the ground. Companies that want to design more sustainable benefits programs need to implement a more formalized governance structure to manage financial and operational costs and risks.”
The study found multinational companies currently face differing challenges in mature and emerging markets. While 83% of respondents reported that active cost management and sluggish growth are a major business issue affecting their company in mature markets, just 37% said this is the case for emerging markets. By contrast, 75% of organizations are investing for growth in emerging markets where they currently face talent shortages and salary inflation, and 64% said employees in emerging markets are increasingly demanding new and higher benefits.
“Globalization poses a unique set of strategic and compliance challenges for multinational employer-sponsors of benefit plans. To continue their commitment to health coverage and retirement security for their employees, they must manage the growing risks associated with plan sponsorship,” said James Klein, president of the American Benefits Institute. “It appears that centralization of corporate benefits governance is already helping to mitigate some of these challenges by improving communication between headquarters and worldwide operations.”
The study was based on insights from global benefits directors at 140 of the largest multinational companies based in the U.S. and Europe.
Rebecca Mooreeditors@plansponsor.com