Case study: Hitachi takes joined-up approach

"In an ideal world, we would love to be able to manage benefits centrally for all of the countries because you can get economies of scale if you've got more numbers," says EMEA total rewards senior director Carol Baylis.

It has recently appointed Aon Hewitt as a global benefit broker, with a view to looking to getting better deals on key benefits, drawing on both its global data and taking advantage of HDS's combined buying power.

"It's very early days but I can see that we'll be able to get better rates in other countries, and as a result of doing that we may be able to offer some additional benefits at no extra cost to the organisation," says Baylis.

The business recently moved to pool its risk benefits across all its subsidiaries in the UK, increasing the numbers covered from 450 lives to nearly 3,000, she adds.

She acknowledges, however, that local market requirements and legislation would make it very difficult to standardise what it offers employees in different regions.

"While we may all have life insurance, we have different levels of cover," she points out. "We're not going to be forced to have a standard benefit; it's just using the same insurer that will then give better rates because we've got more employees insured."

There are issues with this approach, admits Baylis, in particular restrictions placed on global insurers operating in some markets, as well as the limits of their geographic coverage or expertise. "In some countries, such as the United Arab Emirates, you have to work with local insurers or your global insurer needs to at least have a relationship with somebody local," she says.

She has also looked into the concept of multinational pooling - where different arrangements from individual countries are pooled to form larger pots, sometimes alongside other employers' - but found this was restricted by the use of different pools for different countries. "It's an ongoing puzzle," she admits. "I'm not sure there's a perfect answer."

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