As the global marketplace continues to become more competitive, employers are always looking for an edge to attract and retain top talent. Supplemental benefits are most often offered to employees to make a job offer more attractive. However, they are equally common for employees who work in countries with poor social systems. Regardless of the reason for providing supplemental benefits, there are four types that are most commonly given to employees.
1. Health Insurance
While almost all countries will provide basic and essential health services, regardless of nationality, this may not be enough to satisfy top talent. Supplemental health insurance is most common for employees who travel frequently and need an international health plan to cover them while abroad. In countries deemed expat hubs, such as Dubai, Kuwait, Qatar, Hong Kong, and Singapore, supplemental health insurance has become market standard, and in some cases, required by law. The expectation for supplemental health insurance is significantly lower in locations with highly developed social systems, like those in much of western Europe.
The cost to provide supplemental health insurance can vary greatly, from a couple hundred dollars per year up to $2,500 per month. Some of the factors that impact cost are:
- Who is covered?
- Adding dependents increase premiums. Additionally, women tend to affect premiums more dramatically than men due to maternity benefits
- What coverage is selected?
- Higher coverage limits leads to higher premiums. Additional services such as dental, vision, and evacuation have the same impact.
- What geographical area is covered?
- Adding the U.S. to the coverage area greatly increases premiums, whereas, regional plans tend to be much cheaper.
2. Travel Insurance
For companies who opt not to provide supplemental health insurance or a basic local or regional insurance plan, comprehensive travel insurance plans can be a cost-effective substitute. Travel insurance premiums are typically much lower than what you would see in a supplemental insurance plan, making it an ideal option for employees in countries with strong social systems that travel frequently. An added benefit is that travel insurance can be bought when needed, which saves you money while keeping your employee’s best interest in mind.
3. Life Insurance
A benefit commonly sought after by employees, particularly those with dependents, is life insurance. This is largely due to the fact that it is not as common within social systems. Premiums can vary drastically depending on the level of life insurance taken out. While many plans are equal to one or two times the employee’s salary, fixed amounts, such as $100,000 are possible as well. Other factors that impact premiums are the employee’s past health and if they smoke or not. Adding life insurance for a young and healthy candidate is a cheap way to enrich a job offer and secure their services.
4. Private Pension
A vital aspect of an employee’s career is their eventual retirement, and many employees view a private or supplemental pension as a great addition to the pension or retirement fund provided by their social system. This benefit is most commonly offered in Western Europe. Structures and legislative limitations restrict private pension options in certain countries, however, the United Kingdom has one of the more flexible systems. Employers are required to pay an amount equivalent to 1% of the employee’s salary into a workplace pension but have the option to raise this contribution to any desired amount. If the employee and employer agree, this extra amount can also be paid into a supplemental pension plan. A different case is France, where there are compulsory supplemental pensions if an employee is subject to old-age insurance. While legislation and structure differs country to country, a private or supplemental pension plan shows commitment to your employee’s future.
If you have questions about international supplemental benefits and how these should factor into your international expansion plan, our team of international experts can walk you through what should and should not be offered depending on your situation. Our primary goal is helping companies succeed when expanding overseas. Contact us today!