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Aon Hewitt And American Benefits Institute Survey Shows Multinational Companies Want Increased Control Of Global Benefits Programs

LINCOLNSHIRE, Ill., Oct. 10, 2012 /PRNewswire/ --  Aon Hewitt, the global human resources solutions business of Aon plc (NYSE: AON), today released the results of its 2012 Corporate Governance of Global Employee Benefits Study, conducted in partnership with the American Benefits Institute. The study finds that multinational companies are aiming to significantly increase the corporate control and oversight of their employee benefit programs worldwide with the intention of countering rising costs and financial risks.


However, the study, based on insights from global benefits directors at 140 of the largest multinational companies based in the U.S. and Europe, reveals most employers are still allowing flexibility for their local operations to make decisions—corporate policies tend to be more a guideline rather than a mandate for local operations. Fewer than one-in-five companies say they are confident that local practices are in line with corporate guidelines and fewer than 10 percent said they are confident that corporate controls are adequate to reduce financial and operating costs and risks. 

"More and more companies want to have a better line of sight and at least some control over the benefits decisions made by their local operations," said Amol Mhatre, global benefits strategy and solutions leader at Aon Hewitt. "While financial drivers play a big role, companies want to do this for a variety of other reasons, including managing reputational risks and resource constraints on the ground. Companies that want to design more sustainable benefits programs need to implement a more formalized governance structure to manage financial and operational costs and risks."

The study found that multinational companies currently face differing challenges in mature and emerging markets. While 83 percent of respondents reported that active cost management and sluggish growth are a major business issue affecting their company in mature markets, just 37 percent said this is the case for emerging markets. By contrast, 75 percent of organizations are investing for growth in emerging markets where they currently face talent shortages and salary inflation, and 64 percent said employees in emerging markets are increasingly demanding new and higher benefits.

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