A majority of UK-based companies with international staff are failing to track what they spend on employee benefits abroad, raising concerns about oversight, value for money and adequate support for overseas workers.
New research by British firm Towergate Employee Benefits reveals that 70% of employers with overseas employees do not know their total spend on benefits. The poll, conducted by research agency Opinium in January, surveyed 500 UK HR decision-makers and uncovered a widespread lack of visibility when managing benefits for foreign-based staff.
“Whilst it can be difficult to keep up to date with benefits spend when it is on a global basis, 70% represents a huge number of employers who do not have a full handle on their benefits spend, and an awful lot more employees who may be missing out, or even being over-compensated,” said Sarah Dennis, head of international at Towergate Employee Benefits.
Risky Gaps in Provision
Experts say the lack of understanding around international benefits is worrying, especially given the legal and wellbeing obligations employers face when posting staff abroad. Without knowing what is being spent, employers cannot be confident they are meeting either compliance requirements or employee needs.
Health and wellbeing policies, in particular, often need to be placed with a regulated provider in the host country. In regions without robust state-funded support, the onus is on employers to arrange everything from routine care to emergency repatriation. This means total benefits costs can vary significantly depending on local laws, coverage options and provider contracts.
“It can be difficult to keep track of employee benefits spend when a company has employees in different countries around the world,” Dennis said. “There will be the different locations to factor, and different arrangements in each of these varying countries.”
She added the firms “Companies “may use local benefits providers in some locations and global benefits providers in others. If a company has expanded quickly, it can prove hard to keep on top of things, but it’s vital that they do”.
Where Growth Meets Complexity
Managing benefits becomes even more complicated in high-growth regions such as South America, Africa and Southeast Asia, where business expansion is often rapid but regulation is complex. While these regions may offer cost advantages in labour, the compliance landscape around employment benefits is rarely simple.
Sector growth also plays a role. Industries such as IT, technology, manufacturing, financial services and pharmaceuticals are experiencing increasing global footprints. An organisation may begin with a single overseas hire and quickly find itself supporting dozens of workers, each with varying healthcare, insurance and wellbeing needs.
Starting off without a clear benefits structure – or without understanding the cost implications – risks both employee dissatisfaction and unnecessary financial exposure, say observers.
Rising Costs, Unchecked Budgets
Health and wellbeing costs abroad have surged in step with the global rise in living costs and the increased expense of doing business internationally. Without detailed records of what is currently being spent, many employers find themselves unable to forecast or negotiate effectively.
The research points to a growing need for specialist support. For companies expanding internationally, building the right health and wellbeing infrastructure from the start – and understanding the associated costs – is crucial. This not only ensures compliance and protects employee welfare, but also allows for accurate budgeting and procurement.
“It is clear that employers need help in taking control of their benefits’ spend on overseas employees. Expert guidance will help them to ensure they have the right support in place for employees and that they are getting good value for money,” said Dennis.
With overseas expansion becoming a strategic priority for many UK firms, observers suggest that failing to grasp the full picture of international benefits spend may become a barrier to sustainable growth.