In today’s talent management environment, the most successful employers are the ones who listen. In Willis Towers Watson’s 2017/2018 Global Benefits Attitudes Survey, we see that benefits are more important to employees than ever before. While retirement and medical benefits tend to top employees’ list of priorities, paid time off ranks relatively high around the world. Additionally, the topics of workforce flexibility and work-life balance continue to receive significant attention from employers who want to attract, retain and engage talent. More and more, top employers give prominence to employee success, satisfaction and security outside of the workplace, as well as within, as part of their employee value proposition, in effort to help them stand apart from competitors vying for the same talent pool. 

It’s no secret that in order to successfully attract and retain talent, employers must establish competitive and sustainable pay policies. But often, much attention goes towards determining “how much” and “who” without taking other facets of reward into consideration. In many markets around the world, getting pay right may also involve other aspects, such as “what” in terms of specific elements and sometimes even “when” they must be paid. Pay aspects such as these may be statutory obligations for employers, mandated by collective agreements or simply customary practice in specific markets. What’s more, local tax treatment may incentivize specific elements of pay but that’s helpful only if employers are aware of the programs and their benefits. For ‘new’ employers in a market, ignorance is not blissful. Rather, it’s often expensive, both in terms of controllable employment costs as well as employers’ long-term ability to retain staff.

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American companies expand overseas for a variety of reasons: proximity to new clients, possibilities to achieve new efficiencies, promises for better support for existing clients. The ultimate drivers are found in countless variables such as sector, business model and maturity, among others. But regardless of the initial reasons, sooner or later, the comparative cost of labor among countries will come up. While questions that usually arise seem simple on the surface, getting to the right answers requires digging into the details and scratching the surface. One particularly influential aspect can be statutory and mandatory costs that employers may be obliged to pay for social security and other employee benefit plans.

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