Organizations need their employee benefits to work harder if they are to attract and retain the talent they need to grow and to build a healthy, resilient workforce. Yet, at the same time, employers are facing external headwinds that are increasingly placing pressure on benefits.
Economic volatility and rapid advances in technology are raising employees' concerns about their financial and job security, and in turn, affect their mental and physical health. In 2024, just over a third of employees globally reported suffering from anxiety or depression (Global Benefits Attitudes Survey, WTW 2024). Aging populations, worsening lifestyle behaviors and pressures on public healthcare systems are putting increasing demands on employer health benefits. The cost of private medical care is rising rapidly: between 2022 and 2025, costs are expected to rise globally by over a third (35%), accounting for general inflation, this represents an increase of over 22% in real terms (Global Medical Trends, WTW 2025).
Against this backdrop, the emphasis workers place on benefits in their decision to join and stay with employers has risen significantly since 2017 (Figure 1)
| 2017 | 2024 | |
|---|---|---|
| Asia Pacific | 40% | 65% |
| Europe, the Middle East and Africa (EMEA) | 28% | 42% |
| Latin America | 44% | 58% |
| North America | 35% | 51% |
Source: Global Benefits Attitudes Survey, WTW 2024 and 2017
From our survey of Global Priorities for Employee Benefits: HQ Perspective, we can see multinational employers are responding to these shifts and view benefits as more than a competitively neutral element of their workforce strategy. Increasingly, they view benefits as tools to improve employees' physical, mental and financial health. And they want employee benefits to represent what the organization stands for (Figure 2).
Source: Global Priorities for Employee Benefits: HQ Perspective, WTW 2024
Good intentions aside, how do companies make this happen?
Companies that use their benefits to signal what they stand for tend to be more employee centric. They report greater focus, when compared to their peers, on: benefits choice and flexibility, wellbeing, employee engagement and decision support. Corporate headquarters (HQs) tend to be more involved in directing local decisions around benefits design and delivery and are more likely to manage their vendors and technology centrally.
This means that, if multinational companies want their benefits to have a greater impact, central teams need to be more involved from both strategic and execution perspectives. Our most recent survey of Global Priorities for Employee Benefits: HQ perspective provides more guidance on how leading employers are driving their benefits strategy. To receive a personalized benchmark summary to examine these trends in more detail and to better understand how your organization's situation compares please complete the form on the right (or below on a mobile device).
Managing benefits costs continues to be the top priority for headquarters of multinational employers, with four in five reporting benefits financing as a top or high priority.
But how are companies looking to maximize the value from their benefits spend? There are three pillars to financing strategies:
Three in four HQs of multinational companies are focused directly on cost management strategies (plan designed changes to reduce their costs). Around two in three are looking to manage vendors more effectively (67%) and leverage global scale to reduce financing costs (62%). Nearly half (44%) are considering adopting risk transfer strategies (for example, by shifting costs/risks further to employees or to third parties) to better manage benefit risks.
Looking beyond direct cost management, companies are focused on wider strategies to prevent costs from arising, with seven in 10 targeting improved employee wellbeing (70%), and nearly six in 10 using data to better understand cost/risk drivers (58%).
Delivering value for money to both employers and employees isn't just about costs; it's also about focusing spend in the areas that matter most to employees. Nearly half of employers (49%) are prioritizing understanding employees' preferences and just over four in 10 (41%) are looking to enhance benefits choice and flexibility – allowing employees to select the benefits that matter most to them.
Companies plan to elevate their benefits, but how are they looking to do this while also managing their costs? A core aspect of providing benefits that deliver better value for money is to be more employee centric – delivering benefits that better map to employee needs, that support workers at key points in time and that provide a more engaging benefits experience.
Most multinationals are focused on promoting their benefits programs and raising awareness (79%) and improving employees' engagement with their benefits (65%). Aligning benefits with companies' broader diversity, equity and inclusion (DEI) and environmental, social and governance (ESG) policies is also a key priority for a majority (52%).
To be truly employee centric requires a deep understanding of employees wants, needs and perspectives. Yet, enhancing employee listening (surveys and focus groups) to better understand the employee voice is only a priority for just under half of employers (49%). While this is a large number, it is significantly below the number of companies who are aiming for their benefits to signal their companies purpose, tackle employee wellbeing or meet attraction and retention goals. It's unclear how companies can achieve their objectives and be 'employee-centric', without better understanding employee sentiment.
Companies that are leading the way on transforming their benefits have headquarters that intervene more proactively to shape benefit practices across the company's global footprint and provide greater support to local operations to deliver on global strategy.
HQs of leading companies tend to be more involved in directing local decisions around benefits design and delivery and are more likely to manage their vendors and technology centrally. A key aspect of how multinationals are affecting change in their operations is via global minimum standards (minimum requirements for each local territory to adhere to). These allow HQs to direct policy (minimum levels of provision) in benefits that are critical to the benefits strategy, while leaving implementation in most cases to the local teams to reflect local practices. Currently around seven in 10 multinational companies are using minimum standards and this is expected to grow to over nine in 10 in the future.
We also see leading multinationals being more likely to share experiences, for example, how to deploy technology to enhance the benefits experience. Or to provide guidance, e.g., via centers of expertise.
Multitudes of countries, benefit programs and solutions create complexity for multinationals to navigate. Benefits are typically managed locally, which leads to many vendors to manage. Leading employers are looking to consolidate vendors, programs and solutions. They are also seeking to deploy cross-border and multi-local approaches to leverage their scale and simplify vendor management (Figure 3).
In particular, multinational companies are looking to expand global and cross-country approaches that enhance the employee experience, operational excellence, compliance, information management, vendor management and robust governance (global benefits philosophy and guidelines).
Source: Global Priorities for Employee Benefits: HQ Perspective, WTW 2024
Increasingly, employers are looking to use employee benefits to represent what the organization stands for and as a differentiator in the marketplace for talent. Organizations who fail to keep pace risk losing talent to their competitors. However, changing the way benefits have historically been done is challenging and most employers don't have the resources they need to make the shift. If employers don't have a clearly defined strategy, it's all too easy to spend time on things that aren't mission critical. They can get distracted by the introduction of new benefits and, in the process, underestimate the importance of traditional core benefits.
How can employers address these challenges? We work with many leading companies to solve these problems and provide insight, tools and experience to multinational HR teams. We can help to build a global benefits strategy which resonates with everyone. We're at the forefront of developing cross-border approaches (including defined contribution pensions provision and employee benefit captives), so we can help you with how best to deploy these and other tools and techniques.
In this article we've highlighted some key trends in multinational organizations' strategy for benefits. If you have a global or regional role in a multinational organization and would like a personalized benchmark summary to examine these trends in more detail and better understand how your organization's situation compares please complete the form above on the right (or below on a mobile device).
