HR / mobility service delivery model and shared services October 5th 2012
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1 HR / mobility service delivery model and shared services October 5th 2012 Prepared for the RES FORUM, Hamburg
2 Content 1 Trends 2 Process interaction with other key HR areas 3 Need for process standardization 4 Focus on HR Core Competencies 5 Process Manage International Assignments 6 Sample Process Description 2
3 Trends in mobility service delivery model and shared services (1/2) More and more companies are currently reviewing their international assignment framework and essential elements of their policy for International Mobility As a result, the redesigned International Mobility strategy and process will be globally implemented in line with availability of data in a Global Data Base Tendency towards retaining centralized management of the overall International Mobility program through a Center of Expertise organization, including strategic direction, policy interpretation & development and overall process Trend towards the transition from the (partially) de-central International Mobility organization and vendor management to a Shared Service Center organization which will mainly handle all contract and salary related issues 3
4 Trends in mobility service delivery model and shared services (2/2) Management of certain International Mobility activities are outsourced to an external service provider, e.g. home country departure services, vendor management, destination services / settling-in / home finding etc. Purpose: this selective outsourcing contributes to the achievement of HR goals by ensuring high and globally consistent service levels as well as by improving the cost base due to experienced supplier management 4
5 Management of International Assignments: Process interaction with other key HR areas (example) Manage Onboarding Manage Promotion Manage Part Time and Sabbatical Manage ML Recruiting Manage Grading Request Manage Compensation Packages Manage International Assignment Manage Termination Manage Disciplinary Measures 5
6 Need for process standardization Various policy redesign projects identify a need for process standardization and a clear allocation of roles and responsibilities in order to make the process run more smoothly One of the key changes affect frequently the administration of expatriates salaries The target is that a closer link of the assignee s effective salary in the host country to the salary development in his home country to which he/she normally returns after his/her assignment is achieved. Consequently, local structures in the host country do not have the same strong impact as before The salary calculation and its development are more transparent and traceable for all parties involved 6
7 Focus on HR Core Competencies by Outsourcing On-Site Activities (1/3) The concentration of HR administration in regional HR Shared Service: a decision to outsource certain activities that have been accomplished to date by HR staff in individual single countries Outsourcing these activities will assure a smooth transition from a (partially) de-central International Mobility organization and vendor management to the Shared Service Center (SSC) organization Without outsourcing, the SSC would have to develop the expertise for these activities from scratch. Further advantages: more accurate cost projections, a more efficient selection and management of relocation providers Access to ready-to-use IT systems and up-to-date data bases of the selected agencies enable a more economic handling of the administrative tasks, e.g. the management of vendor invoice and expense reimbursement 7
8 Focus on HR Core Competencies by Outsourcing On-Site Activities (2/3) Turning the so far fixed costs into variable ones, companies aim at greater flexibility to respond to business needs. Trend towards outsourcing following activities to outside service providers: Home goods transfer / shipment and storage management Language and intercultural training Home country departure services Visa, immigration, work permit Destination services / settling-in / home finding Vendor management Tax compliance services 8
9 Focus on HR Core Competencies by Outsourcing On-Site Activities (3/3) Outsourcing these activities ensures consistent global service delivery standards at agreed and improved service levels The management of the International Mobility program typically will remain with the company through its Center of Expertise organization, including strategic direction, policy interpretation & development and overall process All compensation related services will be retained (e.g. compensation package calculation, pay delivery, benefits, assignment letters and contracts, etc.) and provided by the HR Shared Service Center organization, with the majority of resources bundled in the HR SSC and satellites in the other regions 9
10 Process Manage International Assignments Process definition The purpose of the process Manage International Assignment is to manage the assignment of employees to a foreign country. It includes the assessment, initiation, implementation as well as the possible end of an international assignment. This process gives a holistic view on roles, activities and procedures to be managed in order to ensure a successful assignment and to be compliant with all statutory aspects of the host county (e.g. work permit). Another important aspect covered in this process is the administration and monitoring of the international assignment from the Assessment of an IA request through the end. There is a particular focus on the annual salary review with home and local HR and the calculation of the bonus payments. Process scope 1.1 Assess IA Request 1.2 Initiation of Assignment 1.3 Implement Assignment 1.4 End of Assignment 2.1 Annual Salary Review 2.2 Annual IA Bonus Calculation 10
11 Process Parameters Process inputs IA requests can be initiated by: Transfer of know-how and culture Set-up of a subsidiary in another country Personnel development Concrete projects Information about planned assignment and candidate Process outputs Potential assignee identified and informed about assignment Assignment package defined and approved by [Head of Group HR] Work and residence permit confirmed Implementation of payroll in host country finalized Compliance with agreed terms ensured Next steps at the end of assignment (e.g. repatriation, localisation, new assignment) analysed and initiated Annual salary reviewed and bonus calculated Key changes Updated detailed description of a global international assignment process Seamless support through the HRMS for managers and employees Clear allocation of roles and responsibilities IA Process is clearly aligned to other accompanying processes (Grading, Manage Compensation Packages) HR SSC supports and keeps track of the end to end process 11
12 Potential Process Improvements (1/2) 1.1 Assess IA Request Availability of global process Systematic assessment of the IA request and potential candidate Clear allocation of roles and activities for all parties involved (BU Head, EC Members, TMR, Head of Group HR, Employee) 1.2 Initiation of Assignment Availability of global process Clarification of the sequence of process steps with a particular focus on Grading and Term Sheet Definition of the cooperation / interplay between local HR and CoE One global end to end Process Manager 1.3 Implement Assignment Availability of global process Ensures tax and legal compliance Details the split in responsibilities for local HR and HRMS Facilities a seamless payroll implementation process on day 1 of the assignment 1.4 End of Assignment All different facets of the end of an siggment are covered: Extension Repatriation Localization New assignment Clear allocation of roles and responsibilities for reintegration and localization 12
13 Potential Process Improvements (2/2) 2.1 Administer/Monitor Assignment Annual Salary Review Availability of global process One process owner (HRMS) orchestrates the annual process for CoE and local HR Avoidance of process step reiteration 2.2 Administer/Monitor Assignment Annual IA Bonus Calculation Availability of global process Synchronization of activities for Local HR and HRMS Pre-Check with RCC C&B and local HR with regard eligibility Regarding bonus calculation HRMS to check with local HR pension fund contribution or other home country equivalents 13
14 Main Activities Employee Decides if he/she would like to consider an international assignment Sends completed personal data form to HRMS Decides on offered assignment package Sends signed Term Sheet to HRMS Review of offered bonus calculation HRMS Informs responsible EC member and Head of Group HR about IA request and potential candidate Assesses IA request (requests and reviews initiation details) Prepares and coordinates grading request Requests and finalizes assignment package, coordinates salary review and calculates bonus payment Initiates assignment (requests confirmation of work/residence permit and start date) Coordinates with local HR Prepares payroll implementation instructions and LoA Checks 1 st payslip Administers/monitors assignment processes Initiates end of assignment process (initiates extension if possible) MGR Sends IA request to HRMS Informs, discuss and coordinates with candidate Reviews assignment package and salary review proposal Discusses compensation package with assignee Checks if alternatives for assignment are available and reasonable Center of Expertise Assesses and approves IA request Provides forms to be completed Coordinates with local HR Prepares and provides salary proposal to HRMS Calculates bonus payments Local HR Provides relevant home/host assignment data to HRMS Completes and forwards assignment package to HRMS Confirms approved work/residence permit and start date Coordinates and implements salary review with HRMS Creates, provides bonus letter and implements bonus payment Starts localization of repatriation 14
15 Roles & Responsibilities (1/2) Process scope Manage International Assignment 1.1 Assess IA Request 1.2 Initiation of Assignment 1.3 Implement Assignment 1.4 End of Assignment MGR Center of Expertise HRMS Local HR 3rd party) Involvement High Medium Low Accountability Lead Support 15
16 Roles & Responsibilities (2/2) Process scope Administer/Monitor Assignment 2.1 Annual Salary Review 2.2 Annual IA Bonus Calculation MGR Center of Expertise HRMS Local HR 3rd party) Involvement High Medium Low Accountability Lead Support 16
17 Sample Process Description 17
18 Sample Process Description 18
19 Thank you PricewaterhouseCoopers Aktiengesellschaft Wirtschaftspruefungsgesellschaft. All rights reserved. In this document, refers to PricewaterhouseCoopers Aktiengesellschaft Wirtschaftspruefungsgesellschaft which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.
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