Employee benefits for the multinational SME

For SME businesses, the decision to expand internationally is a big one.

For increasing numbers of small to mid-size organisations, their business growth and future aspirations are tied up in their ability to service an international market and clients outside of the UK.

A recent survey[1] revealed that nearly 60% of SMEs are currently considering establishing their businesses overseas as a way to drive growth.

Technology and the digital transformation of services and solutions is playing a key role in enabling SMEs to compete with their larger rivals on a global playing field.

Expanding into international markets presents new opportunities and potential new revenue streams; it can protect against larger competitors; offer an increased pool of talent to recruit from; and can help to diversify business risk.

But it’s a big step and one that requires a number of important decisions to be made. For many SMEs, one of the biggest considerations is finding and employing the right people to set up and manage your business internationally. How can you find the right talent in the first place? And then, retain them and keep them motivated?

This is where the right multinational benefits strategy is key.

What is the best approach to take?

International assignments: send existing employees overseas

You might decide that you want to send existing members of your team overseas as they have the knowledge and experience of your business. In which case, you’ll need to consider setting up suitable expatriate benefits, in particular healthcare arrangements, for those taking up overseas assignments.

You’ll need to consider the healthcare needs of the employee and their family alongside any legislative requirements and the healthcare systems in place within that specific country. So for example, employees relocating to Dubai are obliged to have some form of private healthcare cover in place.

The average cost of an assignment can be significant and failure can be costly.  We recommend that employers sending employees on international assignments consider the following:

• Pre-assignment screening
• Cultural training
• Employee Assistance Programmes
• International Private Medical Insurance
• Virtual GP services

Speak to a member of our dedicated International team who can talk you through your options and help find the right solutions.

Employ local talent

Alternatively, you might choose to recruit local talent. Some SMEs prefer this route as local employees will usually speak the language, understand the customs and behaviours of the market and bring a sense of cultural awareness that an expat may not have. This can provide businesses with useful market insights and a competitive advantage.

When it comes to providing employee benefits, there are three approaches that you can consider:

1. Treat every country the same

This approach supports a growing multinational business and brand, cross-border employee movement and ensures a similar Employee Value Proposition is in place. However, it can be very expensive, and benefits may not be deemed appropriate or necessary in certain countries.

2. Be competitive, locally

By adopting this approach, benefits are designed locally to match ‘market expectations’ in local countries. This is advantageous in that benefits match local market needs and it’s often cost effective. However designing locally, means taking a country by country approach so inevitably staff will be treated differently and therefore this option may lack consistency.

3. Local approach with minimum benefits

You could choose to take a local approach but with a minimum level of benefits offered to all staff. This means your benefits are designed to match local needs, market expectation and legislation but a minimum standard is applied (so for example, you may choose to provide all employees with four times life cover). This is the most expensive option of all three. Despite having minimum benefits, staff will be treated differently across each international office.

Whichever approach you choose, there are numerous factors to consider in successfully implementing your international employee benefits strategy, including:

• Complying with local laws and regulatory requirements
• Managing tax considerations
• Supporting employees’ differing wellbeing needs, regardless of where they work
• Understanding local minimum standards (for example, paid leave requirements)
• Recognising cultural differences & embracing diversity