How coronavirus accelerated the shift to centralisation

The Covid-19 pandemic has been held up as a seminal moment for the future of work – with unprecedented disruption triggering a wholesale shift in the way we do our jobs. But, while this catalyst is indisputable, we should acknowledge that change was already afoot.

The Covid-19 pandemic has been held up as a seminal moment for the future of work – with unprecedented disruption triggering a wholesale shift in the way we do our jobs. But, while this catalyst is indisputable, we should acknowledge that change was already afoot.

Even before Covid, employees’ priorities were changing. For example, the growing focus on achieving a work-life balance has been clear for some years now. And there’s also increased expectation that employers will support their people in achieving not just professional objectives, but personal goals too.

In response to this, organisations have been taking a long, hard look at the employee experience they provide, assessing whether it is fit for purpose and consistent across markets.

For many, it’s at the international, cross-market level where issues emerge. And that’s often down to striking a fine balance with their benefits offering – making sure it’s relevant at a local level while providing a globally-consistent experience to all their employees.

The role of benefits in shaping the employee experience
It’s understood that benefits are a great way for employers to demonstrate not only that they care about their employees as individuals, but that they want to provide them with a great experience. We hear this first-hand from employees, with 56% agreeing that the benefits their employer provides make them feel valued.

So it’s no surprise that significant funds are channelled into benefits above and beyond the standard provision, with an emphasis on supporting employees’ mental, physical, financial and social wellbeing. In fact, when looked at as a percentage of basic salary, almost three quarters of employers spend over 16% of their wage bill on employee benefits each year.

What’s more, spending in this area has increased considerably since 2019, with the percentage of employers spending 25% of their overall wage bill on benefits doubling.

Local nuances prove a barrier to consistency
However, the complex nature of the global benefits landscape means that, historically, it’s been very difficult to deliver a consistent benefits experience across markets – or to fully understand ROI from spend across the workforce. To get benefits right in any given country, teams have to understand local nuances, local legislation and maintain competitive vendor relationships – amongst a raft of other, complex issues.

This can be hugely challenging for HR departments as the landscape becomes a barrier to delivering a consistent employee experience.

The shift towards centralised systems
These challenges are driving a shift towards centralisation, with 44% of multinationals planning to fully centralise HR ops within the next 12 months. This empowers organisations to quickly and securely share, access and analyse employee data across countries, giving them a more accurate overview of their entire global offering. This means employers can use the same metrics across locations, identify and share best practice, and update their strategy in response to how well each country or region is performing.

For example, employers might see that absenteeism due to poor mental health is an issue in the US. Equipped with this insight, they can review the benefits they provide in this area and make adjustments as needed.

Covid-19: catalysing change
Even before the Covid-19 pandemic, 81% of multinational employers stated that achieving a globally consistent employee experience was their top priority for 2020. The pandemic has proven the value and importance of making this shift tenfold.

Now more than ever, it’s paramount that employers balance keeping a handle on costs, while ensuring all employees feel a sense of connection and support, which will fundamentally keep them happy and engaged during these most difficult of times.

Chris Bruce, Managing Director & Co-founder – Darwin

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