Authors: Ben Cumming Mark Dowdell Hannah Johnstone
Global mobility and a work-from-anywhere culture open the door to creative solutions for financial wellbeing, starting with retirement benefits. Helping employees navigate day-to-day financial stressors and build savings over the long term enables them to better meet their retirement goals.
The last few years have underscored the risks of financial fragility and the importance of having finances in order. Globally, 44% of people feel anxious about their financial situation. Fears about the ability to retire contribute to that anxiety, with 3 in 4 feeling unprepared.1
These common concerns raise the demand for financial wellbeing resources that appeal to a global and mobile workforce. As a result, more employers recognize that doing their best to meet employee expectations for multinational benefits can improve talent attraction and retention. A defined global retirement strategy, which includes monitoring and acting on the expected adequacy of retirement savings, helps employers meet those expectations and support employee wellbeing.
This global strategy should recognize that not all countries are alike, and one size does not fit all. In the US, for example, offerings now emphasize access to financial coaches or advisors (58%), tuition reimbursement (50%) and emergency savings programs (18%).2 However, the regions where businesses operate may complicate their ability to provide access. When operations are in multiple countries, there may be a need to align financial benefits with the recommendations of multiple governments.
Offering retirement benefits that adhere to both organizational philosophy and country regulations is often challenging. There can be numerous internal and external intricacies to sort out. For example, a multinational may discover that one region is implementing policies without corporate approval. Or a business could operate in a country where structured retirement plans don't exist, so a company-wide matching contribution wouldn't make sense for a global workforce. Tax considerations, gross pay impacts and retirement plan eligibility vary by domain, but newer practices and techniques are helping to overcome these obstacles to equitability.
Embracing personalization
Personalization is a key characteristic and guiding principle of effective retirement benefits for a mobile workforce, as well as other aspects of financial wellbeing. In practice, it means offering different types of plans and resources that follow local compliance and plan governance legislation while still meeting different employee needs.
This core value applies to organizations of all sizes that want to balance employee needs across different generations, income and education levels, and belief systems. Employers will also want to consider both geographical location and the location permanency of employees when choosing multinational benefits.
Offering additional voluntary options on top of government-mandated retirement programs is one approach to embracing personalization. As an alternative, employers could provide international plans that give highly mobile employees a path to retirement savings — independent of their work location.
Belief-based investment options are catching on, providing access to savings plans that align with personal ethics. Making investment options like these available also allows for increased personalization. A recent study showed that sustainable investing is popular with adults in eight countries, especially younger generations.3
Evaluating employee needs
Financial literacy rates can be a significant global challenge. Relatively high awareness of available knowledge resources contrasts with relatively low use among employees.4 Relevant financial education should be prioritized regardless of location to help ensure employees maximize available plans. Understanding how workforce characteristics encourage or hinder interest in existing retirement benefits informs better investments.
Looking for reputable advisors and product suppliers
Corporate staff overseeing benefits for a global workforce is usually too busy to be specialists in the retirement policies of every country, and so are their counterparts in a single country. A reputable global advisor can provide guidance on structuring benefits, help organizations achieve financial efficiency and assist in evaluating vendor quality and integrity. These measures not only reduce the administrative burden, but they also help to protect employers that operate in countries without strong anti-corruption policies.
Offering customized coaching from local providers
Retirement-related benefits for a mobile workforce should include coaching and financial planning services whenever and wherever possible. Whether a retirement solution is universally available to employees of a country or independently offered by an organization, employees greatly benefit from one-to-one support around daily financial management and life events. Most employees have a strong interest in employer-provided financial education when it's tailored to their needs. Financial guidance from a coach or planner, whether in-person or virtual, can engage them more actively in other helpful resources that support wellbeing.
Monitoring national legislation topics
Changes to national laws sometimes reflect the popularity of tactics organizations are considering to improve their competitive standing. Monitoring proposed legislation is gaining momentum as a way to identify retirement and financial benefit trends. An example is caregiving assistance for dependents of any age. Though countries vary in perspective when it comes to things like paternity leave, childcare funding or long-term care options, the desire for employees to be able to finance care while remaining financially stable and save for retirement is universal.
Asking independent advisors and retirement plan providers to monitor and recommend financially based national programs for a global workforce, as they become available, is key. The goal is to establish a program that meets country compliance standards, targets adequate retirement outcomes and includes relatable financial guidance.
Investing in communication
Multinational employers may feel overwhelmed by their responsibilities in managing retirement benefits, and for good reason. The scope of oversight is often quite broad. However, strategically designed and delivered employee communication can be a very effective outlet for getting important messages across and helping employees understand the value of the benefits being provided. A perpetual challenge of financial wellbeing, and retirement benefits in particular, is that many people put off thinking about their financial needs. Well-crafted and well-timed communications give them a nudge.
When selecting multinational benefits for financial wellbeing, gathering insight on employees' respective financial goals and progress is a good place to start. For example, those who aren't aware of their readiness to retire may not be on the lookout for support — and even if they are, employers may not have the key information that's needed to guide them. Once again, communications provide a solution. A multichannel strategy based on workforce data that runs throughout the year can create targeted and personalized messages.
Keeping a grounded perspective
Implementing meaningful retirement benefits and a comprehensive financial wellbeing approach is a long-term strategy. When putting time and effort into this aim, it's important to remember that calculating return on investment is an imprecise science. No single department or vendor has access to all the data, and collaboration may be required among key stakeholders, including banks, retirement providers and employees spread across several countries.
Determining success factors upfront will increase clarity and efficiency, and contribute to better results. Employee engagement survey feedback can be another source of insights. However, the true benchmark of a successful multinational benefits program is an invested organization that prioritizes employee financial wellbeing.
The fact is, financial stress affects workforce engagement, performance and wellbeing outside of the financial realm. Emotional, physical and career wellbeing may also be at risk, creating high stakes for employees and employers alike. Specifically, low investments in employee financial health are associated with escalating benefit costs.
