Captives can help employers attract and retain staff in an increasingly competitive market for talent, according to a Maxis Global Benefits Network report.
Captives provide greater flexibility with the design of employee benefit (EB) programmes, an area where many multinational businesses are failing, said Maxis, a joint venture between Metlife and Axa that helps corporates manage the cost of their benefits.
The consequences of this shortcoming can be significant. “Multinational businesses that fail to offer more flexible EB packages will struggle to attract and retain staff in an increasingly competitive market for talent,” the report said.
“By using a captive to manage EB a multinational can have greater flexibility with their benefits programme design, providing more data to help them understand their spend, manage risk and ultimately to control cost,” it added.
By harnessing the increased availability of data provided by a captive, employers implementing EB programmes can better understand where their EB budgets are being spent, allowing them to identify where they can make reductions without jeopardising the value they offer their employees.
Employers have long sought to attract and retain staff by offering them competitive salaries and pension plans, along with insured benefits such as life, health and disability insurance. This has tended to be offered as part of a one-size-fits-all package, partly due to the complexity of running global EB programmes across multiple locations.
But this approach is starting to deliver diminishing returns, according to Maxis. “Over 70 percent of EB professionals said their current employee benefits programmes are based around a one-size-fits-all strategy, yet almost half stated that they are actually no longer appropriate for the changing needs of their staff,” it said.
Employees want benefits that better reflect their current life circumstances, rather than earning benefits that may only be valuable to them later in life, explained the report. This means, for example, that employees could mix and match the benefits they receive, or adjust their salary up or down by taking fewer or more benefits.
“Employers are acting to meet this need. Almost half of global EB professionals in our study said they are considering more flexible schemes that offer more choice to the employee,” it added.
Maxis GBN, Metlife, Axa, Global