Multinational companies are looking to gain more control over employee benefits plans, mostly to counter rising costs and financial risks, but the majority has a ways to go before accomplishing that goal.

The Aon Hewitt study, the 2012 Corporate Governance of Global Employee Benefits Study, has found that fewer than one in five companies are confident that local practices are in line with corporate guidelines, and fewer than 10% said they are confident that corporate controls are adequate to reduce financial and operating costs and risks.

However, more than 90% of companies expect to have corporate benefits policies in place over the next three years, but less than 60% of organizations are certain that their local benefits plans will be aligned with corporate guidelines.

Currently, only about 40% of companies have formal structures in place. Of this group, an average of 65% said that protocols such as these are effective.

“More and more companies want to have a better line of sight and at least some control over the benefits decisions made by their local operations,” said Amol Mhatre, global benefits strategy and solutions leader with Aon Hewitt. “While financial drivers play a big role, companies want to do this for a variety of other reasons, including managing reputational risks and resource constraints on the ground. Companies that want to design more sustainable benefits programs need to implement a more formalized governance structure to manage financial and operational costs and risks.”

Multinational challenges
The study found that multinational companies currently face differing challenges in mature and emerging markets. While 83% reported that active cost management and sluggish growth are major business issues affecting their company in mature markets, just 37% said this is the case for emerging markets.

By contrast, 75% are investing for growth in emerging markets where they currently face talent shortages and salary inflation, and 64% said employees in emerging markets are increasingly demanding new and higher benefits.

Copyright © 2021 Transcontinental Media G.P. Originally published on

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