Having a global workforce is the new normal for startups — but to grow, attract and retain those workers, you need to expand your employee benefits too. The benefits package is a key consideration for potential hires and should be taken seriously by founders looking to attract top talent.
A 2022 report featuring data from over 2,500 decision makers and employees in the US, the UK, eastern Europe, Brazil and India, found 60% of employees say they've chosen one job over another because it offered a better benefits package and 78% of company decision makers have seen greater company retention after adding or improving benefits packages.
“Some companies have a really strong culture around benefits and want their staff to be supported and well taken care of,” Ian Abbott, international director at independent brokers Engage Health Group, tells Sifted. “Other companies don't and only have benefits because they know potential recruits both want and expect them.”
When scaling a business internationally, a new set of challenges come into play when it comes to employee benefits. We asked the experts about how these can be overcome.
The challenge of international expansion
Joana Viana, senior expert on global benefits design and strategy at global payroll, tax, HR and compliance platform Remote, believes benefits are a crucial component of a company's overall offering to its employees — both as a recruitment tool and to increase employee satisfaction and motivation.
The report found international employees now expect benefits to be tailored to their specific needs, with 67% stating that they would expect benefits comparable to those of other professionals in their city or country.
There could be big cultural differences in terms of what the expectation may be, how you engage and how you communicate those sorts of benefits
“A comprehensive, well-designed and geographically aware benefits package can help create a positive and productive work environment and enhance the quality of life for your employees,” says Viana.
But, one of the reasons it's complicated to deploy benefits packages to employees spread around the world is because every country has different local customs and rules related to perks. What is a common benefit in the UK, for example, may not be common in Asia, Latin America or even other European countries.
“If you're talking about benefits, mental wellbeing and what's important to people, it can look very different when you're speaking to someone in the US compared to Saudi Arabia, for example,” says Abbott. “There could be big cultural differences in terms of what the expectation may be, how you engage and how you communicate those sorts of benefits.”
Abbott adds that one of the high-level challenges from an employer's perspective is language.
He notes how many companies transact internationally and if they've got a small team, they can often speak the language of the company. But if they've got a larger workforce, they won't necessarily have this skill because the business won’t have that multilingual requirement for every member of their staff.
This leaves three options.
“If you are a business and you want to employ people internationally, you have three core routes,” says Abbott. “You can open an office in that country and have employees with employment contracts; you can recruit (but not employ) remote contractors if you can't afford employment contracts overseas; or you can use an Employer of Record to help provide some recruiting framework for businesses.”
Market choice and insurance
A key consideration is the different offerings of international benefits versus domestic benefits.
In the UK, for example, there are BUPA and AXA, which are domestic solutions allowing people in the UK to access the UK health insurance market. But this is also true for most other countries around the world who have their own domestic insurers. This is where the international benefits market could prove simpler and more fruitful for founders.
Benefits can serve to protect the company as much as the employee in some ways, particularly when you look at things like health insurance
“The international employee benefits market sits as an umbrella right across the top of the overall benefits market,” says Abbott. “This marketplace allows you as a company to have one centralised contract and put in place benefits that cover all your staff globally.”
For example, Engage Health Group has created a global healthcare solution specifically for international tech companies and startups, which can cover employees in different parts of the world and offers extra features that typically aren’t included in domestic health insurance policies.
Many consider how such packages benefit employees, but they are significant for employers too. The different types of insurance — the four core options being health, life, income protection and disability, and critical illness — are some of the most expensive benefits from the company's perspective. But they provide the employer protection too and strong return on investment.
“Benefits can serve to protect the company as much as the employee in some ways, particularly when you look at things like health insurance — a benefit that helps take care of people and get them back to work quicker if they do fall ill,” says Abbott.
“Income protection products means if someone is off work sick for the long term, their salary is paid for them by the insurer. This allows the company to forgo that cost for a long period of time so they can afford to replace that person's role temporarily,” he adds.
How to decide on your benefits package
When planning what to include in your staff benefits package, it’s key to think about your own requirements in addition to benefits that are commonly popular amongst the wider workforce.
When creating the package, you should also look at market practices and how your competitors in the same geographic or business area are attracting talent
“Workplace benefits such as subsidised food or gym memberships can be an excellent way for businesses to add to their employees’ day-to-day lives,” Rosie Hyam, people partner at Just Eat for Business, tells Sifted.
“Understanding what people want out of their workplace experience is crucial to improving engagement and retaining top talent, and creating a space where workers feel appreciated, listened-to and supported,” she adds.
Viana agrees, emphasising the importance of taking your employees’ preferences and needs into consideration when designing a benefits package.
“When creating the package, you should also look at market practices and how your competitors in the same geographic or business area are attracting talent,” says Viana.
“Make note of how much budget, financial or legal and compliance constraints you may have overall in a specific market,” she continues. “If you are offering benefits in several countries, it is good practice to look at how the benefits packages compare against each other from an access to resources perspective, rather than a dollar value comparison.”
Creating a new or revised benefits strategy for an international team may seem overwhelming, but evaluating what your challenges are, what you like and dislike about your current structure, and what's important to you is a great place to start.
Engage Health Group is an award-winning employee benefits and healthcare broker with expertise covering the UK and international market. For more info, click here.