Revising Your Benefits And Compensation Programs in View of COVID-19
Whether it’s healthcare, paid maternity/paternity leave, or simple workplace perks, every company has some type of compensation/benefits provided. This can get a bit more complicated for international companies, since standards of what workers are entitled to differ from country to country. Generally, businesses base their company benefits on local legislation, adding additional benefits on top to attract and retain top talent. However, with the COVID-19 pandemic, we are seeing attitudes shift across the board. Here’s what you need to know.
Starting Points on Benefits
Let’s start by comparing typical employee benefits in the U.S. vs. internationally. In the U.S., by law, all benefits schemes for full-time employees include:
- Health insurance
- Worker’s compensation
- Unemployment insurance
- Family and medical leave.
Note, that these do not apply to part-time workers or independent contractors. This is the approach favored over by many companies: build their workforce employing independent workers.
While international workers get most of the benefits provided by the law, they can also expect additional benefits like:
- Housing allowances
- Foreign service premiums
- Cost of living adjustments based on where you live
- Tax payment support
- Spousal employment support
- Traveling allowance (assuming they are working abroad).
It’s worth pointing out, benefits are not always necessary. For instance: health insurance in a country with universal healthcare. If a company is looking to employ globally distributed personnel, it’s important to keep workers’ expectations in mind. What will their benefits package look like based on their past work experience?
Generally, there are two main reasons why companies provide benefits:
- Complying with local labor legislation
- Trying to retain top global talent via compensation schemes.
These are crucial aspects for companies that are striving for global expansion and staff their international teams, serve clients overseas, provide tech support, or bring their sales to international markets. For the sales teams, there’s an added point that deserves mentioning here. As opposed to commission-based compensation, going with a proper employment benefits package means more security for the employee. It also provides less risk of losing the corporate client base for the company if the local agent ends up leaving. Providing benefits may mean a steeper upfront cost, but at the end of the day, it’s a win-win for both, employee and employer. You get employee loyalty, fewer compliance risks, and a better chance of retaining top talent.
Benefits In The Age of COVID-19
So, how does the COVID-19 pandemic impact healthcare benefits for global teams? Part of it depends on the industry. For example, medical companies have a growing need to hire doctors/scientists to meet major needs in certain countries. Pharmacological businesses are recruiting sales managers to present new lines of products.
This labor market shift requires a specific fix like Global PEO/EOR solution. It is now possible to stay compliant while urgently deploying people to meet pandemic-related demands and provide benefits, whether it’s a matter of law or is voluntary. This also allows you to handle international workforce onboarding and benefits provision all at once.
In quiet times, companies were able to prepare for international growth, but things turned a lot more urgent these days. The globally distributed teams are also facing challenges operating remotely, as the base country may be changing rules rapidly when it comes to employee payments and benefits. Acumen’s Express Global Employment solution helps you adjust to rapidly changing in-country regulations, with the various shifts of employee pay and benefits that emerge today.
For example, perks like the ability to use a workout program in the workplace or a travel package don’t really provide many benefits in the current climate. However, an expanded health insurance program may be more appealing, if not imperative.
How are some companies going about this? In the U.S., student loan debt is a major burden on the finances of young professionals. The government has recently issued additional perks for companies that offer support to their employees in debt payment. With this said, because the student loan crisis is a uniquely American phenomenon, this may not be a perk that matters much if you are recruiting mostly international talent.
Even companies that are suffering financially are trying to extend benefits to protect their teams. This can mean providing healthcare benefits for global teams that have been recently furloughed or providing larger final paychecks. Expect to see perks like performance pay or bonuses to be revised as time goes on.
Ultimately, while companies are trying to employ their own approaches to tackle this issue, the safest way to protect your interests, finances, and overseas employees is having a single partner with global expertise. When you’re looking for a company to provide your remote teams with the benefits and perks they need, at any time, Acumen International is the way you want to take.
As a registered legal employer for your international employees, our Global PEO company provides benefits to them in any of your target countries out of over 190 ones we cover. This leaves time for you as an original employer to handle all performance management issues, maintain substantive work relationships and make informed decisions on your current compensation and benefits programs and their revision.
Reach out to us today for more information.