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C o m m entar y
How to craft benefits packages for
globe-trotting employees
Increasingly, corporate man- oriented features are in place in often even if the host country is better.
agement structures and areas of addition to catering to medical This can be a challenge for the employer
accountability no longer follow facility visits. who, looking to minimize costs, may want
the strict political boundaries Despite the differences in to use the local government plan in coun-
that define countries. taxation and diminishing cost tries where services are deemed ade-
As organizational lines blur, of living between countries, quate or superior to the home location.
so do the lines that define how government-provided benefits Make sure that the plan meets the ex-
employee populations are man- and company-provided sup- pectations of the employee and their fam-
aged. Mobile employees can plements are different when ily, and that the insurance provider ad-
By paul pittman
land anywhere in the world in special to the
compared country by country. ministers the plan to your exact
the pursuit of new deposits or northern miner There are different ways to specifications.
joint ventures, and employment provide employee benefits for Be wary of international providers
arrangements need to be flexible so that mobile employees, and the approach that that cannot refer you to other clients in
national boundaries do not create barri- meets the needs of your international your base location. This usually means
ers to the speedy and seamless transfer team will be determined by your talent- that they think they can follow a cookie-
of scarce skills between countries. management strategy, cultural values cutter approach in a new location,
Unfortunately, domestic benefit laws and the intended jurisdictions. which often leads to unforeseen conse-
and practices have not followed the ad- If you are sending employees to loca- quences with taxation, claims adminis-
vances in organization structures and tions where you do not have a local tration and banking.
continue to be country specific, creating business or employees with local-ben- In our experience, no two companies
challenges for mobile employees. efit arrangements, the simplest option want their benefit plans to work in the
As a further complication, the supply is to buy coverage through an interna- same way — but all insurers want their
of employees willing to relocate interna- tional plan for short-term benefits and administrative processes to be as stan-
tionally is diminishing as baby boomers retain the employee in home-country dard as possible. This is where the most
leave the workplace. The younger cohort plans for long-term coverage. Home due diligence should be spent, and an
replacing them are less enthusiastic country plans will generally be inade- expert’s opinion sought.
about working abroad. Many have trav- quate in the foreign location for medi- Ensure that there is a seamless process
elled widely as part of their education, cal and dental claims incurred in the for submitting and administering claims
and unlike their parents, they are likely host country. (to the two systems if that is what you
to leave far less to trust when it comes to Further, in the serious event of disable- select), that there are no unforeseen
details about their employment contract ment or death, most employees (and/or banking charges and that an efficient
and benefits arrangements. their families) will return to their home protocol is in place for dealing with set-
Mining companies already have to country. Having the appropriate plan offs and medical evacuations. Most in-
work hard to attract scarce skills. When providing these coverages avoids home surers, even the largest and most inter-
these are required for international as- and host tax and banking challenges. national, will promise a lot and fall short
signments, miners will also need to en- Medical coverage is the most impor- when it comes to tailoring plans to their
sure that robust benefit and safety net tant, most frequently used and often most clients’ needs.
arrangements are in place, that plans are challenging plan to replicate. Most inex- In recent years, more lifestyle features
globally competitive (as opposed to na- perienced expatriates will want a plan have appeared in international medical
tionally or regionally) and that lifestyle- that replicates their home country plan, plans that you will need to consider in
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Table 1: Basic principles to consider regarding benefits for internationally mobile employees.
Short term benefits Long term benefits
Talent management Special
(e.g. medical, (e.g. life, pension,
considerations considerations
dental, STD) LTD)
Employee will travel to the Consider frequent
Remain in home Remain in home
new work location for short traveler plan (travel &
country plan country plan
periods up to 3 months accomodation)
Employee likely to fulfill An international plan for
Enroll in host country Remain in home
assignment and return short term benefits would
plan country plan
home work equally well
Consider integration with
Enroll in international local medical plans if
Employee likely to go on plan distinct from home Enroll in international acceptable and home
further assignments in or local plan. Enroll in plan distinct from home country for family
several countries emergency medical and or local plan members located in a
political evacuation plan different country to the
work site
determining whether to include: medical and whether contributions result in an may be taxable. Using an insurer to cover
tourism, i.e., undergoing elective treat- accrued benefit is critical. risks in a country where the insurer is
ment in a third country, which can reduce Other benefits commonly provided not licensed to operate may also render
wait times for treatment and/or recovery; by government agencies (or legally medical, life and disability benefits fully
help lines with medical advice in the first mandated by governments) — includ- taxable.
language of the employee; an employee ing workers’ compensation, unemploy- Yours may be a junior mining com-
assistance plan designed for the interna- ment and maternity — will also work pany with no expatriate employees, and
tional family; non-traditional medical differently, and their impact in provid- it would be easy to assume that these
benefits, such as massage and naturopa- ing important security will need to be concerns do not apply. But if you have
thy; and legal and financial services for explored. a project abroad and people are travel-
employees in their new jurisdiction.
As the supply of employees willing The younger cohort replacing baby boomers are
to relocate diminishes and employers
work harder to persuade their best less enthusiastic about working abroad.
people to relocate, these features will
help you stand out and differentiate If you have benefit plans operating in ling from their work location to the site,
your employment brand. the host country and you intend to enroll increased medical, disability and other
It will also be important to understand transferring employees, ensure that risks exist that you need to mitigate.
how the host country’s social security prior service with the company can be Many new sites are in remote and
system works and the relationship be- recognized to meet any waiting or vest- often politically unstable locations, so
tween contributions and benefits in both ing periods, and that pre-existing condi- additional risks such as medical and po-
the home and host locations. Many tion limitations can be waived upon an litical evacuation, kidnap and ransom
countries have bilateral agreements that internal transfer. also need to be considered. Also make
facilitate integration between the coun- Income tax impact should also be ex- sure that the evacuation policy doesn’t
try’s plans. We have touched on medi- amined. Most savings or pension plans require a runway at the site (unless you
cal-plan integration but this could also that have a tax advantage in one country already have a jet aircraft-enabled one).
affect pension accrual, depending on will not have the same advantage in an- And don’t forget your directors. If they
whether the employee plans to return other country. Employee contributions have meetings at site or visit interna-
home for retirement or retire elsewhere. may not be deductible, and employer tional shareholders, they should also be
Understanding how reciprocity works contributions and investment returns included under these provisions.
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As the need for globally mobile em- much remains to be done to integrate HR positions with Alcan, RJR
ployees increases and candidates di- employee benefit arrangements. Nabisco/Japan Tobacco, Laidlaw
minish, employers will need to provide — Paul Pittman is the senior partner and Massey-Ferguson, and was the
the right benefit plans to attract, mobi- and founder of The Human Well Canadian HR practice leader for Ar-
lize and reward the talent needed to (www.thehumanwell.com), a col- thur Andersen. He has lived in the
grow their business. laborative HR consulting practice U.K., Canada and Switzerland, and
While strides have been made in free located in Oakville, Ont., with clients managed pension, benefit and com-
trade and capital flow across borders, globally. He previously held ­ xecutive
e pensation plans globally.
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