November 29, 2022
With limited resources, employers may struggle with their global benefits efforts and priorities, whether they be governance, implementation, renewal management, strategic initiatives, data collection or analytics. As business operations expand and new challenges emerge for employers with global workforces, some HR/benefits leaders are thoughtfully partnering with a global broker to help manage what for many companies equates to over 100 unique benefit plans. Partnering with global brokers also offers employers further opportunities to drive strategic impacts and move the proverbial benefits needle.1 Regardless of the reasoning behind the decision, forming a solid business case for all relevant internal stakeholders is important. To do so, employers can think through these steps:
Step 1: Understand how business strategies and needs can be met by leveraging global partnerships
Review the company’s business and benefits strategies and identify how collaboration with a global broker can enhance those efforts. Employers that have not yet documented their global benefits philosophy and/or guidelines may want to consider first doing so. Providing potential partners with a clear strategy and guiding principles will assist in establishing proper expectations.
Recommendation: Factor in company structure and C-Suite priorities. For employers with a decentralized structure, it can be more challenging to build consensus for a global broker as it increases the number of stakeholders that need to be engaged. However, having a global broker can provide consistency across a decentralized structure. Yet lack of resources is often a company’s biggest barrier regardless of the company’s structure. If the company’s central philosophy has been made clear to the global broker, that person can better assist with resource limitations and is a key rationale in most business cases.3
Outline existing challenges and opportunity gaps. Employers can include any current issues and/or opportunities for improvement with regard to service quality and access, costs, administration, data, analytics and regulatory and internal governance compliance. Prioritize these challenges based on the company’s business objectives and/or benefits strategy (e.g., to develop global consistency) and identify how a broker could address those needs.4
Additionally, as a result of the pandemic, there has been an acceleration of many benefit trends, including well-being, DEI, mental health and digital benefits delivery. Local and global solutions vary significantly, as does the scope of initiatives organizations implement to address these topics. As C-Suite priorities and the employee value proposition continue to change, it is important to consider the evolving benefits landscape when selecting a global brokerage partner.
Questions to Ask When Considering a Global Broker Relationship
- Future goals: What does the 3-to-5-year strategy look like and how could leveraging a global broker or external vendor partner enhance this work?
- Internal resources: What are the internal resources and how could a broker assist with limitations and enhance existing resources?
- Data analytics: What data access needs and challenges exist? Does partnering with a global broker meet those needs?
- Benefit communications: What challenges exist with communicating benefits locally and globally? Can partnering with a global broker help address the challenges? Can a global broker provide a rewards platform to communicate Total Rewards to employees?
- Regional/local support: What do local and regional colleagues think about breaking ties with their long-standing broker? What will they gain and what will they lose?
- Quality assurance: Where are the current service gaps and/or quality concerns, and could they be improved with a change? Where is there already high service and quality, and would this be affected by the change?
- Cost considerations: Are there any anticipated savings? If so, what is the estimated potential savings target? Will there be increased cost in some cases (i.e., higher fee or commission from one broker than another, smaller headcount countries where fee structures may vary, benefits administration or other transition costs)?
- Governance considerations: Where are the current areas for optimization as it relates to governance processes? Could a global broker partnership enhance existing governance? Will there be any issues ensuring internal alignment? Will the partnership follow an existing internal governance structure? What communications will be needed to ensure governance compliance?
- Benefits financing arrangements: What financing mechanisms (e.g., self-insured, multinational pooling, global underwriting and captive) might the company implement or actively manage with a broker? What financing mechanisms make the most sense for the company’s size and structure?
- Internal expertise: Are the right internal resources in place to develop, implement and manage well-being, mental health and other employee-focused programs?
Step 2: Identify stakeholders and create a process to develop buy-in
Determine who the relevant stakeholders are and who will be involved in the benefits strategy and vendor selection process. Engaging a cross-functional group, which may include finance, risk, purchasing/procurement, HR, occupational health, IT and legal, is critical to drive today’s business strategy. Including local colleagues is especially important in helping to learn more about their perspective, resulting in the selection of the broker with the best fit for the organization’s needs. Hearing everyone’s perspective is not only important to reach the best decision but also for ensuring long-term sustainability. The internal stakeholder teams involved may look different depending on a company’s culture, structure and benefits strategy. Regardless, it is key for employers to identify which internal stakeholders they will need approval from in order to move forward.
Step 3: Outline the Return on Investment (ROI) in a comprehensive business case
Once all relevant stakeholders are identified, it will be vital to form and clearly articulate the business case to those parties. While motivations for utilizing broker partnerships can vary for each individual company, some of the top reasons include improved governance and oversight; enhancing employee well-being; benefits inventory, data analytics and cost controls; supplier consolidation synergies; and the ability to leverage for other global initiatives (e.g., global consistency strategy, implementation of minimum standards, global DEI initiatives).3,5
As companies weigh their options, there are various partnership approaches to consider: Partnership with a global broker for the company’s captive strategy, leveraging a multiple-broker arrangement or utilizing one global broker.
Captive: A solution that gives employers more control over cost and design. It is growing in popularity as employers strive for more global benefits consistency. It’s worth noting, the captive model changes the relationship between an employer and its broker.6-8
While initially a cost-savings mechanism, captives are seeing an increased focus on providing employers more control and enabling more consistency in benefits design (e.g., achieving minimum standards, across countries). Four main reasons employers state for implementing a captive are global consistency, DEI initiatives, governance and cost. With a captive, employers own the risks associated with costs, but also can benefit from cost savings that are not available with other financing mechanisms such as reduced brokerage and insurance fees.6-8
Multiple Broker: Some employers leverage a multiple-broker approach, as one global broker may not have the coverage strength needed in all markets where they are located. This multiple broker approach may result in the loss of some governance simplification and cost savings. Having a global coordinator for multiple brokers can make this more feasible to manage, as can having a global policy that outlines the roles and rules for the broker relationship. The global coordinator can function as a referee in providing direction to regional and local teams, and when necessary, enforce the global policy. Here are three examples of multiple broker approaches:
- Local brokers: Focuses on building tailored packages to meet local needs but creates challenges for governance and global consistency effort;
- Regional brokers: Allows for global consistency while partnering with a broker who understands regional nuances; and
- Two global brokers: Creates competition between the two brokers and allows local teams to use the broker who is stronger in their market while ensuring that the global consistency strategy works.4,5,9
While considerations may differ for each employer, the underlying components of the governance process remain consistent whether pursuing one global broker or a multiple global broker partnership arrangement. These key elements include the Request for Proposal (RFP), Scope of Work (SOW) and Relationship Management.
- 1 | Business Group on Health. Creating a Globally Consistent Benefits Strategy. February 22, 2022. https://www.businessgrouphealth.org/resources/creating-a-globally-consistent-benefits-strategy-intro. Accessed April 25, 2022.
- 2 | Quinn B, Mathieu B, Buckley A. Panel discussion: How can global financing solutions support the future of benefits? Utilizing financing solution for cost containment and DEI. Zurich Global Employee Benefits Solutions Conference. Jersey City, NJ. June 28-29, 2022.
- 3 | Business Group on Health. Global Benefits Governance Guide. April 21, 2022. https://www.businessgrouphealth.org/resources/global-benefits-governance-guide. Accessed June 1, 2022.
- 4 | Business Group on Health. Employer-Sharing Discussion: Global Benefits. May 13, 2022. https://www.businessgrouphealth.org/en/resources/key-insights-global-benefits-5422. Accessed May 19, 2022.
- 5 | Business Group on Health. Employer-Sharing Discussion: Global Benefits. July 19, 2022. https://www.businessgrouphealth.org/en/resources/key-insights-global-benefits-7622. Accessed August 2, 2022.
- 6 | Business Group on Health. Utilizing Financing Mechanisms to Implement a Global Consistency Strategy. February 22, 2022. https://www.businessgrouphealth.org/resources/utilizing-financing-mechanisms-to-implement-a-global-consistency-strategy. Accessed April 25, 2022.
- 7 | Business Group on Health. Employer-Sharing Discussion: Captives and Other Financing Mechanisms. September 29, 2022. https://www.businessgrouphealth.org/resources/key-insights-global-benefits-9622. Accessed October 1, 2022.
- 8 | Business Group on Health. Globally Connected: Focus on the Future Workforce. 2021 Global Summit Insights. Business Group on Health. November 5, 2021. https://www.businessgrouphealth.org/resources/2021-global-summit-key-insights. Accessed January 23, 2022.
- 9 | Business Group on Health. Breaking Down Borders. 2022 Global Summit Insights. Washington, DC. August 2, 2022. https://www.businessgrouphealth.org/resources/key-insights-2022-global-summit. Accessed November 3, 2022.
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