A strong governance framework and effective integration are crucial.
By Jeff Miller
It’s no surprise that global benefits outsourcing has gained traction in our complex business world. Operating across borders and amid economic uncertainty, companies seek administrative efficiencies, seamless technology platforms, and expertise in managing and delivering the benefits and services that employees need and want. Today’s outsourcing leaders must have the resources and commitment to make that happen.
This was evident at Mercer’s third annual Global Benefits Outsourcing Conference this past May. More than 100 attendees—including benefits directors and heads of benefits—gathered to discuss HR benefit challenges and outsourcing solutions.
For example, as the global economy works through recessionary times, employee retention and engagement continue to be a top business concern for employers. Then
there’s healthcare reform in the United States, health and wellness priorities, and the retirement of the Baby Boomers.
In each case, the choices are hard, and the need for outsourced solutions that justify their investment is very real. For companies with operations across different countries and cultures, the challenge of managing global benefit programs not only relates to employee attraction and retention but also represents financial and nonfinancial risks.
To appropriately manage the complexities, multinationals need strong governance frameworks in place, a sure integration of process and technology, and global service delivery and administration. Any total benefits outsourcing (TBO) solution worthy of its ambition must take into account that employers need help not only in implementing but in defining and delivering these processes.
For example, global governance is a multifaceted endeavor that requires analysis and support at the highest level, plus a clear definition of process. It’s about discovery, including agreeing on corporate objectives, assessing risk and structural gaps; design, which requires constructing a model that leverages the competencies within the organization as well as via local, regional, and global partners; implementation, including training, rollout, and feedback; and monitoring, to periodically review, reassess risk, and update policies. With the appropriate governance in place, multinational organizations can best leverage outsourcing tools and technology to administer programs on a global basis.
Indeed, when it comes to the outsourced administration of global benefits, the complexity only increases, as organizations are faced with balancing the perceived value of delivering benefits support services to employees locally and the ever-growing demands to realize cost efficiencies at the global level.
As a global benefits strategy moves from design and implementation through the details of of an optimized member experience, a balance between local flexibility and global consistency must be struck. This requires using top local resources, recognizing local cultural values, and legislative requirements, all the while creating a consistent culture and employer brand, enabling global efficiencies and improved vendor management.
Those are daunting tasks even for the largest organizations, so the opportunity for global benefits outsourcers is to do a lot more than merely provide administration and technology. On one end, it means helping companies manage financial and nonfinancial risk by providing key expertise in such areas as compliance, plan design, benchmarking, actuarial needs, investments, and risk broking—areas where organizations may not have the in-house expertise to identify nor mitigate the risks involved with providing benefits to employees around the world.
On the other side of the equation, providers need to offer first-rate service delivery, from transactional self-service for employees and managers, to help lines, case management, even face-to-face support. All of it relies, of course, on the enabling technologies that provide a seamless and flexible experience for clients and their employees—ideally, promoting not only health and wellness but higher levels of engagement as well.
To enhance that experience, outsourcers must be able to administer the benefit offerings that are best customized to employee needs and wants. An example of this is the growth of flexible benefit offerings that are helping to fashion an attraction/retention edge for companies in more and more countries, especially across Asia Pacific, in locations such as China, India, Japan, Australia, and the Philippines.
As I’ve noted, the deliverables are many, but so are the rewards of a global benefits management strategy that begins with good governance. Thus, employers are counting on governance guidance to manage risk and avoid the downside. That includes mitigation of risks due to conflicts between global and local interests, the risk of loss due to inefficiencies, and the avoidance of fines and other penalties associated with regulatory compliance. Always, it comes down to helping clients avoid surprises.
When we help them manage these global risks successfully, avoiding that downside leads to capturing the real upside of global benefits management. These include not only cost savings and economies of scale, but also the ability to move quickly to respond to change and opportunity, as well as better allocation of global resources, better stakeholder management, and better performance by delegates and providers.
Thinking globally and acting prudently locally is probably the most challenging task for any growing organization. As outsourcers, we are in a unique position to help, but we must do nothing less than deliver the world.
Jeff Miller is president and group executive for Mercer’s outsourcing business.