A recent study by Towergate Health & Protection reveals that 83 percent of employers with overseas staff opt to provide a cash lump sum for employees to choose their own benefits, a practice that the firm warns is rarely the best option.

Sarah Dennis, Head of International at Towergate Health & Protection, states: “Providing a cash lump sum to overseas staff, rather than offering specific benefits, leaves both the employer and the employee open to potentially unforeseen risks.”

The research highlights multiple issues associated with this approach to managing overseas staff affecting both employers and employees.

Employer Impact:

  1. Economies of Scale: Purchasing healthcare individually is often more expensive than through a group scheme. Hence, lump sum distributions can lead to higher costs for employers.
  2. Duty of Care: Employers have a duty of care to all employees, particularly those abroad. Providing a lump sum instead of specific benefits makes it difficult to ensure appropriate coverage and support from expert sources.
  3. Talent Gap: Health and wellbeing benefits are crucial for attracting and retaining talent, especially for international positions. Simply offering a cash lump sum can negatively impact recruitment and employee loyalty.

Employee Impact:

  1. Non-Compliance: In some countries, specific benefits are mandatory for work visa eligibility, such as private medical insurance (PMI) in Dubai. Employees choosing their own benefits risk non-compliance, potentially affecting their visa status.
  2. Poor Choices: The overseas staff may lack the knowledge to spend the lump sum wisely, possibly neglecting essential coverage like dental insurance, leading to high medical costs abroad.
  3. Lack of Expertise: Selecting appropriate benefits requires a high level of expertise, especially for international coverage. This task can be burdensome for employees, detracting from their primary job responsibilities.
  4. Lack of Communication: Employees who purchase their own benefits miss out on vital employer communications about health and wellbeing support, leading to lower utilisation of available resources.

Sarah Dennis concludes: “International employee benefits is a specialist area, and it is best to seek expert advice to ensure both the employer and the employee are adequately supported.”





Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.