Global minimum benefits standards are on the rise. Here’s what that looks like

Not all policies surrounding benefits such as vacation and healthcare are created equal.

While an employer would be required to grant full-time workers based in Germany 20 days of vacation, for example, the same wouldn’t be true for employees in the US, where there’s no federal statute requiring paid vacation. Similar country-level disparities exist for parental leave and other benefits.

Inequities in benefits packages can create tension among global workforces. Spend management company Emburse started requiring all of its employees to take at least two weeks of paid time-off (PTO) in 2022, in part to encourage US employees to catch up to their European colleagues, HR Brew reported last year.

Recent data suggests more employers are now looking to standardize their benefits packages across countries.

What does a global minimum standard look like? Some 70% of employers surveyed by consulting firm WTW in October reported having a “global minimum standard in place for employee benefits,” nearly double the share who reported doing so in 2019.

Companies can go about setting a global minimum standard in a few ways, said Rick Sherwood, WTW’s North American leader of integrated and global solutions. Historically, HR has looked at what benefits are prevalent in markets across the world, and sought to establish a minimum standard so employees have access to certain perks even if they’re not “market prevalent” in the country where they’re based, he said. Multinational employers’ parental leave policies provide one example of this approach, as “global companies are going well beyond what is standard in the US to better match what’s elsewhere in the world.”

Increasingly, employers are also considering their mission and core values when setting a global minimum benefits standard. If they’re a company that believes in “equity and equality,” for example, Sherwood said, they may want to set a standard for LGBTQ+ benefits like gender-affirming care, even in countries where such services aren’t typically covered.

“You’re setting this minimum standard, either based on what the company believes in, or what’s market prevalent, and [you’re] bringing everyone else in the world towards that standard,” he explained.

Sherwood said he believes the precipitous uptick in employers developing global minimum standards can be attributed to a sharper focus on equity, as well as higher employee expectations. The heightened interest in “global consistency” may also have been driven by the Covid-19 pandemic, said Jim Winkler, chief strategy officer for Business Group on Health, an advocate for large employers in healthcare policy.

The pandemic, Winkler said, “cast a bright light” on access to testing and vaccines in different countries. “All of a sudden, employers quickly realized, holy cow, that’s totally taken care of in one country and completely not at all in another,” he said. “And I don’t feel good about that as my employee value proposition.”

In recent years, some employers have taken a more holistic approach to health and well-being and thought about how to respond to a higher level of global mobility on their teams, Winkler said. “You have to figure out how to have benefit programs that actually work for all those people under all those circumstances,” he said.

How are employers doing this? Implementing a global minimum standard for benefits typically takes several years, and it doesn’t happen all at once, Sherwood said. He recommended employers first assess how employees value their benefits through surveys or focus groups, for example. Understanding employees’ preferences can be “a really helpful data point in deciding what the minimum standard is,” as well as “understanding the prioritization of the rollout,” said Sherwood. If employees in a certain country are saying that parental leave is very important to them, then HR might want to focus on bringing those workers up to a minimum standard first.

Several employers, including Thomson Reuters and the London Stock Exchange Group, have recently rolled out global parental leave policies. Nokia and Sanofi have also set goals for globally consistent benefits. In 2022, Nokia introduced global minimum standards for both parental leave and life insurance, part of a multi-year plan to become a “purpose-driven company,” and create an environment where “people not only work, but thrive.” Sanofi published four “global and well-being principles” in June 2023, including “market competitiveness,” “inclusion and flexibility,” “innovation and digital experience,” and “employee listening.”

There’s no doubt that standardizing global benefits can represent a significant investment for companies, Sherwood and Winkler said. But there are potential payoffs as well, including improved attraction and retention, better productivity, and a more engaged and healthy workforce, as well as the ability for employers to demonstrate how they live by their values.