Seven out of 10 global or regional benefits managers at multinational companies have limited or no access to timely financial information related to current employee benefit spending, according to Towers Watson’s 2014 Current and Emerging Global Benefit Themes research.
“It is striking that global and regional benefits managers at many multinationals—which often spend hundreds of millions of dollars on employee benefits annually—do not have this vital piece of information,” says Mark O’Brien, a senior consultant at Towers Watson. “Nowhere else within their businesses would such a lack of management information or oversight be acceptable.
Notwithstanding, he predicts that more advanced multinationals will allocate the resources necessary to address this so they can use information on benefit spend to help identify risks and opportunities, make decisions and prioritize their activities to increase the return on investment from their benefits plans.
The research also shows that two-thirds of multinationals are at the early stages of developing their global benefits strategy and management approach. This means they are either just getting started or narrowly focusing on a single global benefits management area.
The Towers Watson research also confirms that multinational companies’ benefits and pension focuses are shifting. For example, multinationals are moving from a primary focus on DB pensions to a more balanced view across a broader range of benefits, in particular, DC plans and employee health.
According to the research, other focus areas are more enduring over time, such as the management of financial risk, benefit spend optimization and the effective handling of corporate transactions.
Overall, Towers Watson’s research highlights that there is always further opportunity for improvement, whether multinationals are just beginning to gather data or their global benefit management strategy has been evolving for many years. It suggests more mature organizations draw on their own—and other companies’—global benefit experience to adopt or adapt techniques, organizational structures and operating models that fit their unique circumstances.
The research shows that they customize what has worked and learn from other companies what hasn’t; for example, more advanced multinationals are more likely to have implemented a structured benchmarking approach than newer companies.
“From our experience, continuous review and refinement of the global benefit management organization and its processes, programs and strategies leads to better outcomes for both employees and their organizations,” explains O’Brien. “Multinationals that ask themselves the most challenging and strategic questions, and address them, are typically the companies that achieve the greatest value from their employee benefits programs and spending.”
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