Top 3 reasons why multinational pooling can reduce HR stress
Typically the preserve of larger multinationals, the advantages of pooling can often be missed by international middle market (IMM) companies and small to medium sized enterprises (SMEs). The fact is the cost savings, recruitment and retention benefits associated with such arrangements can be enjoyed by all sized companies. Setting up such an arrangement isn’t half as complicated as some may think and could be well worth the effort.
Pooling is a worthwhile option where firms have insured premiums of as little as £17,500 a year, and presence in only two countries.
For many companies – large and small - global growth is essential in order to remain competitive. And whilst HR professionals will probably have a clear idea of what employee benefits make sense in their home country, it’s not easy to know what to offer employees abroad. This is where multinational pooling can prove invaluable.
Subscribing to a pooling arrangement gives a single point of access to a network of insurer partners around the world, the benefit of which is not only access to local products and services, but also up-to-date country and regulatory information.
They allow for competitive terms and conditions, pricing and flexibility, plus an annual overview of all the contracts in which the client company is present. And, what’s more, cashback.
According to Willis Towers Watson’s Multinational Pooling and Benefit Captives Research Report 2016/17, well-managed pools can achieve savings of 15% or more.
This is achieved via the full stop-loss system offered by pooling arrangements: in other words, any negative balance is absorbed by the insurer, while potential dividends will be paid to the client if the overall portfolio balance is positive.
Struggling to get to grips with employee benefits needs in the countries where you, as an employer, have presence? Here are 3 reasons why multinational pooling can help make your life easier:
1) Recruitment & retention
A competitive benefits package can go a long way towards helping attract and retain the right employees. And particularly where specific country practice and needs need to be understood, the peace of mind that comes from knowing that their health and wellbeing needs are catered for cannot be underestimated.
2) Cost management
Access to local insurers and local contracts can not only mean that employees receive more relevant and appropriate benefits, but also those benefits may also prove more cost effective. Added to that is the potential cashback where the experience of the pool is favourable and when it’s not, offsetting losses against future years’ margins or, in some case, absorption by the pool.
3) Business intelligence
In addition to providing HR with central oversight of all the benefits in the pool such arrangements can also be used to provide essential business intelligence, such as a picture of total compensation. Health and wellness data could also be captured in order to provide detailed medical reporting to companies, helping them to identify hot spots and allocate spend and resources accordingly.
Damian Ross, regional manager UK, Ireland & Nordics, Generali Employee Benefits Network.