Talent Strategies Shape Global Benefits Trends for Multinationals: Report

Aon reports that global benefits professionals navigate compliance, cost, and communication challenges while leveraging data and expanding offerings to attract top talent.

By: R&I Editorial Team | July 15, 2024

Expanding roles, rising benefits costs, and financing and communications challenges are a few of the challenges facing benefit professionals at multinational companies as they strive to attract and retain top talent, according to the Aon 2024 Global Benefits Trends Study.

The study, which surveyed 288 global benefit professionals, reveals that rising costs, shifting perceptions of employee mobility, pay transparency mandates, the role of technology in supporting company culture and employee engagement, and the evolving responsibilities of global benefits professionals are some of the forces shaping the landscape for multinational companies.

“Top performers and talented hires are the lifeblood of an organization, providing new skills, capabilities, perspectives, creativity and innovation. Companies that fail to consistently attract and retain these employees can struggle to maintain their overall business performance,” the report stated, citing Aon’s Global Risk Management Survey 2023/2024.

According to the benefits report, the top global priority for GB professionals across all industries and sizes of companies is ensuring compliance and competitiveness of benefits programs, with 89% saying this is a current priority. Compliance requires that multinationals meet all national and local regulatory benefits standards across a multitude of geographies.

After compliance, the next highest priorities for multinationals were: improving global performance (76%), mitigating increasing costs (75%), and improving communications and perception (73%), the survey found.

Areas to Watch

The report identified four areas that pose opportunities and challenges for GB professionals:

Benefit design: GBs professionals are looking to ensure that benefits programs align with corporate priorities and have a unique identity to help them connect to their employees. This has led some benefits professionals to review their benefits strategy more actively and frequently, they report noted. Globally, one in three multinationals are currently drafting and articulating their global benefits strategy and reviewing these annually.

However, strategies are not as holistic as they should be, given that 96% of companies are focusing on health and risk benefits, but fewer companies are placing emphasis on pension (74%) and leave (72%), Aon found.

Compliance: GB professionals acknowledge the importance of compliance, but only 35% list it as a key objective in their role. Slightly more than half of companies (53%) rely on local countries/offices to take the lead in enforcing it, the survey showed.

Governance: Companies are still struggling with benefits governance, according to the report. Governance seems to be in place; however, it is limited in remit and responsibility. The survey found that:

85% of companies say they have a central benefits management structure, though half of respondents claim that this structure is relatively immature.
Improving the management and governance of global employee benefits is the number-two priority for clients.
Only half of companies say they have formalized and documented their governance structure.

Change management: Companies often look to human resources department to implement transformational people strategies, including environmental, social and governance (ESG), diversity, equity, inclusion and belonging (DEIB), employee wellbeing and more. To do this, they sometimes rely on HR professionals to lead the change management initiatives necessary for them to gain traction, Aon reported.

HR professionals are taking a disciplined approach to change management fundamentals: coordinating frequency and consistency of messaging; ensuring buy-in across top executives; and building stakeholder engagement and excitement around benefits.

Leveraging Data, Analytics and Alternative Financing

In an era of continually rising costs — particularly as it relates to health care — Aon reported a pronounced movement toward cost containment and reallocation of benefits investments. To manage benefits spending in this environment, companies are using their benefit strategy to prioritize investment options, optimize governance structures and implement cost-effective strategies at the local level.

Nearly one in three companies are exploring new financing arrangements through the use of global underwriting, captives and multinational pooling. The primary motivation for considering these options is to generate financial savings, with 72% of companies citing this as the top reason. The ability to access better terms and conditions follows closely at 59%, the survey found.

Data is being widely used to identify cost drivers, understand employee needs, and drive preventative actions, according to Aon. For example, “59% of companies say they are capturing the employee voice to guide strategic priorities.”

While access to data remains a challenge in general, companies with global financing arrangements report having an easier time: Access to detailed claims data is higher for companies with captives (70%) and global underwriting/multinational pooling (60%, the report stated.

Despite the growing interest in alternative financing arrangements, many companies are still leaving financing decisions to local markets rather than taking a global approach. The study found that 67% of companies delegate these decisions to local offices, potentially missing out on the benefits of a more centralized strategy, Aon noted.

The Next Generation of Global Benefits

Companies are expanding global minimum benefits beyond traditional offerings to support wellbeing, DEIB and the future of work. Of the 43% of multinational companies currently offering or planning to offer global minimum benefits, nearly three out of four congregate around four main offerings: life insurance (73%), employee assistance programs (73%), maternity leave (70%), and paternity leave (69%).

The prevalence of global minimum standards is expected to double over the next one to two years, Aon reported. Beyond traditional benefits, companies are getting creative in the types of minimum benefits they are rolling out globally, such as mental health/wellbeing days, sabbaticals, and minimums on bereavement leave, as well as access to financial wellbeing and digital mental health services, the report stated.

Mature organizations and those with captives are leading the way in implementing global minimum benefit standards. Organizations with captives are more likely to have fully implemented their global minimum benefit standards, which is not surprising given that captives can support the implementation of these standards, Aon stated.

Benefits Communication: The Underdog

Benefits communication and increasing the perceived value of benefits is a top strategic priority for 73% of multinationals. However, current communication efforts are often underwhelming, uncoordinated, and ineffective, according to Aon.

Only 33% of companies include guidelines on communication in their global framework, and traditional media such as employee intranets, emails, benefit booklets, and paper communications still dominate. Fewer than one in five companies say that their employees understand their benefit programs, even in progressive industries and mature organizations.

Looking to the future, companies have ambitious plans to enhance benefits communication. They are investing in total rewards statements (58%), push messages to mobile phones (52%), personalized messages and videos (49%), and even gamification (46%) to engage employees more effectively.

Employees are likely to demand greater transparency in the future, and companies that can deliver effective, personalized communication will have a significant advantage in attracting and retaining top talent.

View the complete report on Aon’s website. &

The R&I Editorial Team can be reached at [email protected].

Sustainability in All Markets

David Guild, Head of Financial Lines, MSIG USA

When looking for a financial lines insurance partner, sustainability should be top of mind. Knowing that an insurer can provide solutions in a hard market alongside the soft will not only provide peace of mind but also help build resilience.

“Leaders should have the room to concentrate on their vision for the company and what it can achieve — not be burdened by potential risks that keep them awake at night. “Your insurance partners should be able to understand the trials and tribulations of running a business, to respect that there is no single right answer to most challenges, and be prepared to assist wherever, whenever issues may arise,” Guild said.

Sustainability is proven in an insurer’s ability to come through on the promises it makes. For example, MSIG USA’s approach has earned it an A+ rating, proof that its team can back the promises it makes and see them through to completion. “We are confident in our ability to serve your insurance needs, on a global scale,” Guild added.

“Everything we speak of revolves around the credibility of our platform, which is reflected in our A+ rating, a 350-year legacy within our family of companies, and our experienced team here in the U.S.”

An Emphasis on Company and Culture

Successful partnerships are built on a solid relationship between insurer and client.

At MSIG USA, “we aim to be a stable and sustainable presence for our clients,” Guild said. “The value of long-term relationships is at the core of what MSIG USA is all about. Our underwriters deeply appreciate the importance of these connections.

“We believe that building and maintaining strong, long-lasting relationships with our customers is essential to navigating the inevitable fluctuations of the insurance market. We are confident in our abilities, and in yours.” he added.

Company culture, as Guild mentioned, is more than an internal commitment; it’s something that can also drive business relationships.

For insurance partners, analyzing and aligning with their clients’ culture helps to solidify partnerships, as well as open the lines of communication and understanding.

“Variables will change, oftentimes rapidly. From our view, what matters is the culture of that company when responding to change. It’s about trusting their character rather than just the policies and procedures in place,” Guild said.

A Source of Truth and Clear Communication

Effective communication goes a long way in clearly understanding an insured’s business and future potential. This allows for sustainable partners to develop coverage that fits and to work closely with their Claims team to understand the partnership in context.

With the amount of data available today, and the number of ways information can quickly be disseminated through different medium, a good insurance partner knows that companies must be the single source of truth for their stakeholders.

“Quarterly and annual earnings calls provide a platform to discuss financial results and respond to investor questions. Investor presentations offer a more comprehensive overview of the company’s strategy, performance and outlook,” Guild explained.

We will look at what analysts and other third parties think about the information provided to try to glean what the investor base will think and how they will act. But ultimately, it is what the company says, and the way they say it, that we will assist in defending, if need be, and so we make sure to listen and learn from the company leadership.

Bringing These Qualities Under One Roof

Leaders want to know that, at the end of the day, their business is a priority for their partners.

Clear communication, a strong relationship and emphasis on sustainability are just the start. Their insurance partners should strive to understand their business, identify areas of concern and craft coverage customized to meet their needs.

With an impressive 350-year legacy, MSIG USA is doing just that for its clients, utilizing its global presence to further its clients’ goals.

“The key elements of our approach are an intellectual pursuit of information, a well-honed practice of underwriting that identifies material aspects for risk assessment, and clear communication of our insights to our clients: brokers and buyers alike. We aim to provide a transparent and informed perspective on the risks we underwrite,” Guild said.

“We bring sustainable, predictable insurance capital and what we believe is best in class service philosophy, honed by working with some of the most sophisticated brokers and buyers of insurance in the world.”

To learn more, visit: https://www.msigusa.com/financial-lines/.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with MSIG USA. The editorial staff of Risk & Insurance had no role in its preparation.

MSIG North America is a member of MS&AD Insurance Group Holdings, Inc. which is the 8th largest non-life insurance group in the world by revenue. Based in Tokyo, Japan, we operate in 48 countries/regions and generated $46B in 2021 with approximately 40,000 employees globally. MSIG North America is the marketing name used to refer to MSIG Holdings (U.S.A.), Inc. (“MSIGH”), and its subsidiary companies.