Aging Workforce = Knowledge Risk

New York — Many U.S. organizations are failing to capture critical workforce knowledge and experience from older employees facing retirement, and few organizations are transferring that knowledge to newer employees, according to the results of a survey by Accenture (NYSE: ACN) (

The survey, part of an ICR/International Communications Research omnibus survey, entailed querying 504 full-time U.S. workers between the ages of 40 and 50 by telephone in March 2005.

The survey of more than 500 full-time U.S. workers between 40 and 50 years of age found that nearly half (45 percent) of respondents’ organizations do not have formal workforce planning processes and/or tools in place to capture their workplace knowledge.

Additionally, one-quarter (26 percent) of respondents said that their organizations will let them retire without any transfer of knowledge. Just 20 percent said they anticipate an intensive, months-long process of knowledge transfer prior to their leaving, 28 percent said they believe the knowledge-transfer process will last one or two weeks, and 16 percent think they will simply have an informal discussion with others in the organization prior to retirement.

“If they don’t act soon, organizations will face a major exodus of institutional knowledge, as their most experienced employees leave the workforce. With more than 25 percent of the current working U.S. population reaching retirement by 2010, companies must undertake workforce development and training initiatives to capture knowledge and minimize its loss. Additionally, they must support these initiatives with technology, which can help capture critical information and distribute it directly to employees’ desktops,” said Kathy Battistoni, a partner in Accenture’s Human Performance practice.

Despite the potential loss of workforce knowledge and experience, workers remain committed to their employers.

According to the survey results, more than two-thirds (70 percent) of respondents said they expect to retire from the organizations at which they’re currently employed, and half (49 percent) said they expect to remain in their current positions until that time. The vast majority (88 percent) said they are willing to acquire new skills, nearly half (46 percent) said they are willing to relocate for their employers, and more than one-third (39 percent) said they are willing to work longer hours. Yet four in 10 (41 percent) said their companies are doing only a fair or a poor job of providing the training they will need to meet the skills challenges they will face prior to retirement.

At the same time, few companies take advantage of the experience and expertise of their retired workforce. Just one-third (34 percent) of respondents reported that their companies hire retired employees as contractors so those former employees can transfer their knowledge and skills to their replacements.

“Companies should take three critical steps to meet the challenge of transferring knowledge from retiring employees,” said Battistoni. “First, they must understand the extent of the problem, including the skills at risk, and their organization’s ability to tackle it. Second, they must develop a strategy to capture and transfer core skills from retiring employees and to identify, attract and retain new workers with critical skills. Finally, they must manage and measure the progress of the entire effort. The bottom line is that leaders in this arena know that capturing critical workforce knowledge and skills can’t be left to chance.”

Among the survey’s other findings:

– Most employees’ plans for retirement have not changed over the last five years.

The majority (58 percent) of respondents reported that, over the past five years, they have not changed the age at which they plan to retire, versus 41 percent who said their plans have changed. More than half (53 percent) said they expect to retire before age 65, while 29 percent plan to do so between 65 and 69, and 17 percent expect to do so after 70.

– Finances determine retirement plans.

Three-quarters (74 percent) of respondents whose plans for retirement have changed said they plan to retire later than originally expected. For more than half of these respondents (55 percent), the chief reason for the change is that their financial situation is not as secure as they had hoped, while 20 percent of the respondents said they still enjoy working and therefore plan to delay their retirement. Just 21 percent said they plan to retire earlier than anticipated.

– Retirement security is uncertain.

More than two-thirds (68 percent) of respondents said they are somewhat or very concerned about the ability of their pensions and government-sponsored programs to provide comfortable support after retirement. Yet 58 percent said their employers do a good or excellent job of providing financial compensation and investment opportunities to ensure a more secure retirement.

Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With more than 110,000 people in 48 countries, the company generated net revenues of US$13.67 billion for the fiscal year ended Aug. 31, 2004.

10 Ways to Success …Contract Recruiting

by JUDITH L. ENNS, Ph.D., Managing Director

Through the management of many contract recruiting assignments and recruiters, I have learned that a number of factors contribute to positive recruiting results for companies employing contract recruiters, the absence of which almost certainly concludes in unsuccessful recruiting assignments.

Further-more, close collaboration between contract recruiters and their end-user hiring managers to custom/processes, even those which have been finely honed by the company’s employment group, is a requirement for successfully attracting and securing talented individuals in an opportunity-rich hiring environment.

The 10 critical success factors outlined here are the road map for effectively utilizing contract recruiters to do the job for which they are engaged. The company with the best people wins. Contract recruiters can help you win the talent war if they are managed well and if communication flows freely.

Factor #1: With the contractor write clear expectations and timelines.

Expectations about
(1) the number of jobs to be filled realistically,
(2) in what time frame,
(3) in what priority,
(4) following and reporting on what recruiting metrics,
(5) with what amount and medium of communication between recruiter, manager and human resources,
(6) the “go to” person for resources and problem solving,
(7) the number/location of job fairs, web sites to use, travel, expense reporting, and
(8) the handoff when the assignment is concluded – must be agreed upon and memorialized before work begins.

Clarification of these issues in writing becomes the scope of work agreement toward which contract recruiters can work, and is the document by which managers can assess their progress.

Factor #2: Provide current, useful position descriptions to contract recruiters.

Along with contract recruiters and hiring managers review all open position descriptions. Before recruiters review resumes or make screening calls, confirm that the descriptions are, in fact, the real and urgent positions to be filled. Recruiters need to work on real openings to satisfy moving target deadlines and product roll-out dates. If descriptions must be created, ask contract recruiters to assist with that project first. Contractors who source, recruit, screen and interview blind spend your time and money ineffectively.

Factor #3: Introduce your recruiting metrics to contractors, or if none exist, involve them in creating metrics.

Secure agreement from contractors on the specific measures, and the frequency, manner and format of report on recruiting activities. Contract recruiters should know what information is most important to you and to any other manager/stakeholder involved.

Some basic metrics are:
(1) number of ads web postings, association and other postings per position;
(2) number of resumes reviewed from each source;
(3) number of cold calls made per position;
(4) number of employee referrals per position;
(5) number of telephone screens per position;
(6) number of interviews scheduled;
(7) number of interviews conducted;
(8) number of offers;
(9) number of rejections;
(10) number of acceptances and starts;
(11) time from initiation of a position requisition to new hire start date.

The data can be captured and reported in simple spreadsheet format, at the very least.

Factor #4: Provide contract recruiters with the tools and resources they need.

Be sure a computer, email, a voice mailbox, web posting capabilities, approval to use websites, space to interview, telephone lists, an organization chart, recruiting marketing materials, a desk, are all available to recruiters so they hit the ground running.

Facilitate introductions to hiring managers, and suggest each manager spend enough time with a recruiter to enable him or her to fully understand how positions to be filled fit in the department or project group.

Factor #5: Schedule time to meet with recruiters face to face weekly, initially, then agree on frequency thereafter.

Contractors need to be on site meeting with hiring managers and the human resources contact as often as need be to close openings. Although many recruiters are fully functional and effective from their home offices, planned time on site with internal clients for updates, sourcing ideas and brainstorming is necessary to keep activities on track. Email, voice mail and fax work for information exchange, but priority setting, problem solving and course corrections must be done face to face. Since managers are extraordinarily busy, selling the need for these meetings to them is critical to recruiter success.

Factor #6: Provide feedback to contract recruiters and solicit their ideas.

Contract recruiters will typically solicit “how am I doing?” feedback and appreciate knowing what or what not to alter.

Tell them what they should continue doing and what to change. Ask the same of hiring managers and relate their feedback to contractors, too. Before going too far down the recruiting assignment road review measurement data so that you and recruiters can quantify both efforts and successes.

In addition, solicit recruiting, interviewing, selection and hiring ideas from them. Many recruiters have supported a wide range of organizations in size, type, complexity and hiring volume, so they do have valuable experiences in what works best to attract and hire top talent.

Factor #7: Ask recruiters where they may need help.

If you have asked a contractor to do an informal compensation survey, for example, and then discover that the contractor has never done market research before, provide help directly, or offer the assistance of other human resource professionals. A contractor can more than likely do the job, but may need some specific direction in an area not part of his or her skill set and experience.

Factor #8: Expect questions from contractors.

Contractors do not know all about your business so you should get good questions about positions to be filled, business units, company goals, culture, managerial style, etc. so that recruiters are fully armed to answer questions from candidates.

Factor #9: Be sure contract recruiters do the jobs for which they were hired.

You can expect contract recruiters to be the solution to your recruiting challenge. You may see other projects and needs for which they might be helpful, but they could be distracted from their central focus, which is to reduce the number of openings you have. Try to shield contractors from politics and intrigue, and watch to see that they avoid participating in corporate drama.

Factor #10: As far as is possible, sweep away hurdles, hassles and barriers to recruiting progress.

Any unusual, unexpected interruptions to recruiting, constraints to success, or limitations on progress, should be discussed swiftly with contract recruiters. They understand organizational change and abrupt turns in direction. As contractors they typically know how to flex and dodge. Communication among all invested parties with new plans of action will usually keep everyone on track.

Although no formal guarantee accompanies these 10 critical success factors, my experience over the years indicates these 10 elements, if implemented and managed, contribute powerfully to contract recruiter effectiveness.

Opening in a Foreign Country; be careful

For more info… •

The world is getting smaller. Not in a geographical sense, but in a business sense. With the advent of e-mail, video teleconferencing, the Internet and e-commerce, businesses are no longer restricted to operations in a sole location. Improved trade, favorable tax rates, labor and centers of excellence have almost made it a necessity to have offices or strategic alliances in more than one country.
But how does one jump into the marketplace? The purpose of this article is to provide a framework of topics that is essential in doing business on the global level.

There is no replacement for having proper professional assistance in developing your global presence. This assistance will take the form of attorneys, accountants, consultants, etc. However, by doing the initial work themselves, businesses will be educated to the realities of the project, as well as reduce the number of billable hours to consultants and outside sources.

In making the final decision to expand globally, it is always a good rule of thumb to follow the old journalism axiom of the “5 W’s and H”: Who, What, Where, When, Why and, then finally, How? A more appropriate planning order and the questions associated with them might be:

Why are we undertaking this operation?
What are we going to do in this country?
Where will it be located?
Who needs to be involved in the planning and execution of this operation?
When do we want this to be in place?
How do we proceed to meet our objectives?
Once the questions have been answered, you have the infrastructure of your roadmap.
Early Planning
Prior to working through the issues of opening a business, there are three issues that need to be addressed as you prepare to go forward. First, what is the language spoken in the targeted country? Do they speak your language or will you need an interpreter? Requiring an interpreter will add expense to the transaction. Additionally, there is the matter of whether the interpreter understands what it is you are trying to get across in negotiations. There may be subtle nuances to language, or some things simply may not translate smoothly. So language, or choosing your translator, needs to be a topic of some concern.

The second issue is culture. Many a deal is blown due to one party not understanding the local cultures and ways of doing business. It may stem from something as simple as a handshake, to where business is transacted. Sending a female to conduct negotiations may doom a contract from its initial discussion. Not bringing a gift or bringing the wrong gift can be nearly as disastrous. Prior to going to the country, it is advisable to receive some instruction on cultural awareness to avoid most social faux pas.

The last issue, religion, may also be a part of the first two. Religion may play a part in when and where the discussions are held.

A brief lesson in local customs and practices is well worth the money to place negotiations on the right track from the onset.

Once you have your basic fundamentals in place, it is time to address the more pragmatic issues involved with developing a foreign entity.

Country Considerations
When selecting a country in which to do business, there are many considerations for the foreign investor. Has your country established diplomatic relations with the country?

The presence of diplomatic relations will generally be an indication that there are treaties in place for doing business. These treaties will have an effect on taxation, trade limitations, etc. It will also provide a local consulate or contact for the home country that can be used for making introductions, assisting in arranging meetings with certain government officials, and lend clout in the case of legal issues.

It is important to know whether there are any environmental regulations that will affect the way you do business. If you are opening a manufacturing facility, what are the restrictions on the disposal of solid and other wastes, air quality, etc.? Complying with local regulations may add more to the cost than you had planned. It may also require liability insurance for the company, and you as an individual for any violations.

Does the country offer any incentives to you for doing business? Many times a country will offer a company tax incentives, reductions in fees for building permits, licensing, etc.

Is there a limitation on imports or exports? Depending on the site chosen and the relationship to your home country, the limitation on what you can and cannot export or import may have an adverse impact on your overall business plan.

If you are going to build a new facility, there are a number of concerns prior to breaking ground. The environmental issues mentioned above may play a part in the certificate process. Additionally, what permits and inspections are required?

A final note about preliminary research will include the requirements for product registration. Is the country in which you are about to begin doing business a party to any treaties that acknowledge intellectual property, trademarks and copyrights?

Once you have your initial results from above, you are ready to begin the preliminary steps to open your business.

Company Structure
Working with a local law firm will be an essential step in registering your business. You will have to decide how to structure the company. Will it be a wholly owned subsidiary, will it be a division, or will it be a public or closed corporation? The structuring will have repercussions downstream, as it will affect how you structure your accounting, intra-company pricing, etc.

The structure of the entity may be driven by its overall purpose. For example, if you are opening a company in the UK, and you need to obtain what is known as a “List X” rating for defense work, the company will need to be a registered company in the UK.

Additionally, are there any restrictions to the makeup of the officers and senior staff? In certain countries, you are required to have a local citizen as the Managing Director or as a member of the Board.

Financial Systems
Generally, there is an order to the flow of opening a facility. Many of the required procedures will follow a certain order that proceed like dominoes. For example, you need a company registration number to obtain a tax number. You need both the registration number and the tax ID to open a bank account. Finally, to set up your payroll and pension schemes, you need all three prior steps.

You will also need to determine the pricing strategy for inter-company transfers of products and services. While most countries allow a discount for the exchange of goods and services, the tax and treaty structures may limit you to discounts similar to those you would provide to a valued customer.

It is always better to be referred into a financial institution. Talk to your local bank and see whom they would recommend in the country of choice. If there is already a working relationship between the banks, there may be a better fee structure for transfers, loans, lines of credit, etc.

If you are trying to set up any sort of special procedures, or lines of credit, it will sometimes be worth your while to go to the bank’s main headquarters prior to visiting the local branch. Many times, if you are deviating from normal procedures, it has to be approved at the main office. The headquarters may not be in the same city where you are establishing your operation, but you will save time in the long run by gaining approval on your account structure, then having the headquarters refer you to the local offices. By going directly to the source of approval, you have eliminated one step.

Many companies try to save costs by doing their international payroll in house. Unless your payroll department is conversant with the required Social Insurance contributions, pensions, taxes and other requirements of a foreign country, you are asking for trouble. Additionally, most U.S. payroll and HRIS systems cannot handle foreign data (addresses, currency differences, Social Insurance numbers, etc.).

Depending on the size of your operation, you may want to review the services of a payroll service or contact a local accounting firm that offers payroll as a part of its services. A service will contract to run the payroll, make the tax payments, bonus payouts, pension, and insurance withholding and contributions. They can also provide all year-end forms required for individuals to file their own taxes.

A review of the country’s requirements for insurance is very important to the overall cost of opening and operating an office. First of all, is the company required to carry insurance? Next, what types of insurance and risk must be covered?

Before contracting with new carriers, you need to review the international umbrellas your home country’s insurance coverage provides. In some cases, you will be required to write the insurance in the new country. However, the more you can write under your current policies, the more cost effective it will be.

The same applies for your Director and Officer, Errors and Omissions, and Employment Practice Liability polices.

Taxation is a key-planning component when planning the overseas operation. The company will need to be aware of how taxes are calculated, if there are federal and local taxes, and what the filing and payment requirements are. Is the tax year in the foreign country different from the tax year in the home country? Does the country require an audited statement at regular intervals from the company?

If your company’s fiscal year is different from the date of incorporation in the foreign country, may you change the accounting year to match yours to maximize accounting practices, standardize reporting, and require one audit instead of several?

From the operating standpoint, what allowances are there for depreciation and deductible items?

Is the country a party to any tax treaties that will guide your accounting and reporting structure? For example, where may business losses be deducted, in the home country or in the foreign country?

Human Resource Issues
The human resource function is one often overlooked until late in the process, yet it is one of the areas fraught with pitfalls for the unwary company. The issues of labor, employment, terminations, unions, benefits, social insurance, pension and compensation are heavily regulated. One of the best bits of advice to follow is to “stop thinking like a (fill in your country here).” A simple example of this is the offer letter. In the United States, most offer letters are one to two pages in length. They lay out the salient points of the offer, remind you that it is employment at will, and then close.

However, in many other countries, employment at will is not a reality, and there are statutory guidelines as to what has to be in the offer. There may be a requirement to provide each employee with a terms and conditions (T and C) letter that covers the entire employment relationship in some detail. The T and C’s may run as few as three to four pages for rank and file employees, to more than 20 pages for senior management.

I am reminded of the manager from the United States who was interviewing a candidate for a position in their German subsidiary. The manager extolled the virtues of the company’s benefits plan, the generous matching to the 401(k) retirement plan, the “generous” holiday plan, etc. At the end of the day, the individual was given the standard offer letter for managers in the company. He followed up with the Human Resources Department, asking what his benefits were, would he be paid monthly, from where would he be paid, did they know that German Statutory leave was greater than what they offered and, finally, where was his “real” offer letter.

After the question about the availability of labor has been reviewed, the next step is to recruit them. Recruiting methods will differ by country. Some areas of the globe do not have as ready access to the Internet as others.

When advertising in a foreign country, there are several considerations: the best day of the week to advertise, in what format should it be, and does it have to be in the local language.

In the U.S., the best day to advertise is Sunday. However, in different countries, there may be a different day for specific disciplines. For example, ads for computer professionals might run on Thursday, healthcare on Tuesday, and administrative professionals on Saturday. Working with your advertising agency should provide the best days for advertising.

The next issue is in what language the ad should run. If you are trying to hire for local sites, it should run in the local language. When having ads translated, you need to ensure that the message printed is the message you want, as some things do not translate well.

How and where will the responses be sent? Will you have a local repository or will they be sent to your home country? Remember, the resumes may arrive in the local language.

When and where will the interviews be held? Language may be an issue once again. Additionally, be aware of what questions you may and may not ask in that country. In the U.S., we are governed by strict guidelines as to the questions that may be asked. In various foreign countries, photos may be taken and any question is fair game, job related or not.

Notice periods also vary by country. In the U.S., we are accustomed to having our new hire begin employment within three to four weeks. Other countries have very stringent requirements as to the amount of notice required prior to leave taking. The notice period may be as little as 4 weeks, or as much as a year or more depending on statute and employment contract. In statutory cases, the employee may face civil fines for not providing the correct notice period. The waiting time for your new employee may have a direct impact on your new operation commencing operation.

Benefits cover a wide scope of areas: time off, maternity leave, health and life insurance, and pensions. As illustrated in the example above, what appears to be a good plan for one country may not apply at all, or be well below the statutory minimum requirements in another country.

While a country may have a socialized medical system, many progressive companies are offering additional coverage to attract and retain employees. This practice used to be limited to management employees and above. However, in the increasingly tight market for technical talent, companies are offering extended benefits to the general employee population.

Health benefits will vary from country to country. A buy-up program allows an employee to be placed in a semi-private or private room over a ward. It may also offer the employee the choice of a treating physician, rather than who is on-call that particular day. In addition, in some places, they will receive preferential treatment, as the provider knows they will receive payment faster from a private insurer rather than the public plan.

Prior to making a foray into a new country, it is strongly advised that employers review the statutory benefits plans to assure the company will be in compliance with any contributions they are to make. It will also allow you to accrue the necessary expenses to cover various leaves of absence, illness and disability.

If the company is operating in more than one country, then global pooling might be attractive. Simply put, pooling allows a pooling of lives in more than one country to an aggregate number to receive a better pricing arrangement while providing the individual coverage required in each country.

Executives may also have an increased benefit package. Their fringes may include club memberships, drivers, cars, phones, computers, and topped up life, health, and pension contributions that are more tax advantageous than other forms of remuneration.

One of the biggest mistakes a company can make is converting its local wages into the currency of the foreign location. Generally, it will translate very high or very low for the local market. Calculating salaries in a foreign country needs to be done in the same manner as at home: rank the job and analyze it in the local market based on requirements, education and years of experience.

Another pitfall is the number of months paid to an individual in a foreign country. Depending on the country, employees may receive between 13-17 months salary for 12 months work. The differences may be adjustments, bonuses, or just tradition. Many American human resources professionals have been caught short in salary negotiations because they did not realize until too late the number of months salary that was being negotiated.

Local surveys may be purchased from Human Resources organizations or international consulting groups.

In addition to base compensation, there may be other sums of money, or in kind options, that are more tax advantageous for the company to offer. For example, meal allowances, company cars, clothing allowances, or mobile phones might be included in the salary package. When you negotiate the base compensation, it is critical to know the full extent of the package.

One final note for multi-national companies is the location of payment. It has been a practice of some companies to spread the allocation of salaries for certain levels of management over a number of locations. For example, the executive is paid in U.S. dollars, French francs and Japanese yen. However, an initial review of the person may only reveal the pay in one of the countries. During salary negotiations with the new company, only the one country is discussed, the employee laments over how low paid he or she is, and the new company increases the pay commensurate with local ranges, while the employee still draws salary from the other sites. The moral of the story is to review all levels and locations of pay.

Stock plans, as part of compensation, will also vary from country to country. In some countries, the grant of options or stock may be taxable at grant, at exercise, at sale, or as a combination of all three.

When developing a global stock plan, the decision needs to be made as to which operating unit the stock will be granted. For example, the company is headquartered in the U.S. and opens a subsidiary in the UK – will the employees of the UK entity receive U.S. stock or will the UK entity issue its own stock?

Foreign stock may be granted in other countries; however, there may be issues with vesting (some countries do not allow for timed vesting). In a case where vesting in options is immediate, the U.S.- based company may want to modify the agreement to issue only the amount of options that would vest annually until the original grant number is reached.

Taxation may also be an issue to the issuing body. Prior to developing an entirely new plan, a full review of the parent plan should be done. In many cases, there is a provision to issue stock options to a foreign location. In such a case, all that is required is a modification of the parent plan exercising the clause to issue foreign stock.

The plan enrollment and grant documents will then need to be modified to include local rules and notifications. Local counsel should review the plan to ensure the proper format is followed and the tax implications are the most favorable for all parties.

Immigration is an issue from many standpoints. It can delay the transfer of an individual by weeks or months, depending on the country and visa required. Immigration can also be an issue when moving a family where the spouse works. In some countries, a spouse may not work while accompanying the employee you have hired. The inability to work, in some cases, will lead to discontent and boredom at home, as well as financial hardships due to the reduction in a dual earning status.

The immigration timeline should be a major consideration in the overall business planning timeline.

Another consideration of immigration relates to third country nationals. You hire a national from Country A to work in Country B. However, part of the job duties requires entering Country C. Country C and Country B have treaties that allow free transit between borders, but Country A and Country C do not. Therefore, your employee may either not be able to enter Country C, or may have to apply for a visa, delaying the project.

Unions and Works Councils
The term Union has a very different connotation in the U.S. as compared to other countries. In most European countries, the employer will be working with either Works Councils or Trade Unions. The Unions, unlike in the U.S., are mandated by statute in most cases and play a major role in work determination, training, wage rates and redundancies.

I cannot emphasize enough the importance of working with the local Unions or Councils when opening an office. Failure to do so can result in fines, a lack of cooperation, and potential costly time delays until you begin to work through the proper channels.

Companies tend to underestimate the power of the Councils. A good example is in the case of data transfer of employee information. In Germany, even if the employee has signed a release to transfer the information, the local Works Council may override it and block the transfer of the data.

Data Privacy
Data privacy really came to the fore with the Directive 95/46/EC of the European Parliament and of the Council on the protection of individuals with regard to the processing of personal data, and on the free movement of such data.

The Directive applies to the processing of personal data wholly or partly by automatic means, and to the processing other than by automatic means of personal data that form part of a filing system or are intended to form part of a filing system.

The Directive has been ratified in local forms for most of the member states. For example, the UK enacted the Data Protection Act 1998 that required full compliance by October 23, 2001.

There are a number of safe harbor practices that will allow the transfer of data between the EU and other countries.

This rule, in particular, affects U.S.-based companies where the human resources department normally may keep copies of the international files, salary data, and other personal information for benefits purposes. Transfer of the data without the correct allowances and safe harbor conditions are a violation of law.

In some countries, the data a U.S. company may seek (dependents, etc.) may not even be kept on file by the company. For example, in Sweden, with its socialized approach to pay, benefits, pension, etc., the data normally collected in the U.S. is not kept on file and the requestor from the U.S. may get a terse response from the Swedish location on why such information is being requested. As mentioned above, a bit of cultural training can go a long way to establish positive relationships with the foreign office.

Proper planning, training and the right team will make the acquisition, merging, or opening of a foreign site much smoother. If the proper amount of time is placed into planning, research and execution, the number of unforeseen and unexpected issues will be minimal. They will still occur, but many will be non-issues, leaving time and the ability to deal with actual larger issues as they occur.

Mr. Darryl Weiss has been a frequent presenter to human resource organizations globally and has published on matters related to international human resources.

Compensation survey: Where you live matters

A management challenge for employers

New York –
Where you live continues to be a key determinant of how much you are paid, a new study shows.

A job that demands an average salary of $30,000 nationally can pay as little as $26,820 in Little Rock, Ark., or as much as $36,870 in San Francisco, according to the 2003 Geographic Salary Differentials Survey from Mercer Human Resource Consulting. This represents a pay variation of more than 33 percentage points — from 10.6% below the national average to 22.9% above.

Each year, Mercer’s survey compares local pay rates for more than 175 cities to national medians at different pay levels. The 2003 findings suggest that geographic pay variations are less pronounced, but still evident, at higher pay levels. For a job with an average salary of $60,000 nationally, pay varies from a low of $54,780 (–8.7%) in Asheville, N.C., to a high of $70,980 (+18.3%) in San Francisco, for a variation of 27 percentage points.

Even at $90,000, there are still pay variations by geography. Cities like Omaha, Neb., Knoxville, Tenn., and Buffalo, N.Y., represent the lower end of the pay range at $85,500, $85,590, and $85,680, respectively. Meanwhile, cities like San Francisco, San Jose, and New York hold the top spots at $104,400, $103,590, and $103,410, respectively. Among the cities in Mercer’s survey, the pay variance at this salary level is about 21 percentage points.

“What’s noteworthy is that pay variations exist at the higher salary levels and to this extent,” says Darrell Cira, a senior compensation consultant in Mercer’s Philadelphia office. “It was once believed that geographic pay differences disappeared at salary levels of $80,000 to $90,000, where the market for talent tends to be national rather than regional or local. Clearly, that’s not the case any more.”

“Today, you need to take geographic location into account even for salaries of $100,000 and higher, especially in cities like New York and San Francisco,” he notes.

Mercer’s geographic analysis highlights the challenges faced by large employers with employees in multiple locations throughout the US. Sensitive compensation issues can arise when an employee moves from a relatively high-salary area to a relatively low-salary area, or vice versa, Mr. Cira says. Having good information on salary variances helps employers handle these situations in a fair and consistent manner.

However, he notes, it is important to apply geographic salary differentials correctly.

“Differentials are helpful for adjusting pay structures and for broadly understanding differences in pay to help formulate pay policy,” Mr. Cira explains. “However, employers also need to be aware of the micro-markets within their geographies. While salaries for all jobs may average 5% more than the national average in a given location, individual jobs may be at the national average or 10% above the national average. These micro-markets are often the source of employee complaints that they are not paid competitively.”

The 2003 Geographic Salary Differentials Survey can be purchased by contacting Mercer at or 800 333 3070. The cost is $495 for a web-based version of the survey.

Mercer Human Resource Consulting, one of the world’s leading consulting organizations, helps organizations create measurable business results through their people. With more than 13,000 employees serving clients from 142 cities in 40 countries worldwide, the company is part of Mercer Inc., a wholly owned subsidiary of Marsh & McLennan Companies, Inc., which lists its stock (ticker symbol: MMC) on the New York, Chicago, Pacific, and London stock exchanges.

Currency Market Flux Impacts Int’l Assignees

As we all know, there are many important areas to be considered in the process of relocating employees. From the physical removal of household goods, to settling children into new schools, there seem to be an endless number of items to check off on a relocation ‘to-do’ list. Yet as a currency specialist we continually find that the all important purchase of the employees local currency is often overlooked.

Whether transferring a lump sum to purchase an over seas property, or simply forwarding a US Dollar salary abroad every month, we have experienced that general corporate practice is to stay somewhat removed from this aspect of an international assignment or permanent move. Simply allowing employees to blindly use their banks to make their own decision on how they are going to move their Dollars abroad, however, can be a costly mistake!

Volatility in the currency markets is an undeniable and unavoidable daily occurrence. With a daily turnover in excess of $1.5 billion and an uncountable number of factors playing into which way the market will move, it is impossible to forecast currencies with 100% accuracy. While large corporations employ market professionals to manage billions of dollars worth of currency risk, private individuals are often left at the whim of this massive market feeling uneducated and at risk.

So why should this be a concern for HR professionals? Because you want to be sure your employees are looked after properly and feel comfortable with the currency aspect of their international move. Let’s look at this in a realistic and specific light; you are the employee that is on an international assignment.

If you put yourself in the shoes of an international employee, it is quite simple to see how the currency market and exchange rates directly affect your life: While your employer is a US-based company you will more than likely receive your salary in US Dollars (USD). This income may be deposited into your US account every month or possibly into an international account that has been set up in your new country. Either way, you will usually need to exchange your USD income into the local currency in order to buy groceries, pay bills and maintain a standard of living.

The process of using your bank can be frustrating and may also be expensive.

Think of it this way; every month you will need to contact your bank in order to initiate the exchange from your USD account into your local account. You will more than likely speak with a different person every time you call and you will most definitely receive a different exchange rate every month.

On top of all that your bank will charge you a wire transfer fee ranging from $15-$30 per transaction. While the cost of wiring these funds on a regular basis will certainly add up over time, the inherent risk you face not knowing what rate you will receive in the future is MUCH more concerning.

Imagine being on an assignment in Canada during 2005. Looking at the accompanying chart which illustrates US Dollars (USD) vs. Canadian Dollars (CAD), you can see the rates move against you by nearly 11.5% over the course of the year. (See chart below.)

To illustrate let us assume that you were transferring USD$5,000 in wages to Canada on a monthly basis. In May of 2005, your USD$5,000 would have converted into roughly CAD$6,350 at a rate of 1.27. By February of 2006, that same USD$5,000 would have purchased you just CAD$5,700, a difference of CAD$650 every month. Assuming that you were using your bank, you would have also been receiving a wire transfer fee for each transaction totaling somewhere around $300-$400 in bank charges alone.

The solution is simple; if you want to protect against currency risk, receive better rates of exchange and avoid needless fees, don’t use your bank! Most private individuals in this situation do not realize there is alternative to their bank, but using a currency specialist like HIFX can in fact remove the stress and hassle of these such requirements all together. HIFX’s Private Client Services include the securing exchange rates for up to 24 months, the setting up of direct debits which will avoid all transfer and bank receipt charges, and a simple, friendly service that is designed to put clients at ease.

Whether your employees need to make regular transfers abroad or are moving larger sums of money for their international purchases, it is worth knowing that you can point them in the direction of a world renowned currency specialist which completely understands the relocation process.

The details expressed in this transmission and accompanying documents are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. HIFX, Inc. accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information.

Currency Exchange and Today’s International Compensation

Volatile USD causing rethink

Jason C. Kovac, Certified Compensation Professional (CCP) and Certified Benefits Professional (CBP)
WorldatWork •

As the global economy struggles through a recession, employers need to look closely at how they pay for talent. Critical elements of rewards – external and internal pay equity, merit pay as well as job design – determine how well an organization motivates its workforce, especially the key talent pool.

Challenges in Attraction, Retention and Motivation
For the rest of 2008, it appears that the tide of compensation and benefits rewards is not flowing in favor of workers. With salary budgets hitting historic lows and remaining there for the near future, and health care costs continuing to rise, employees could start to feel a hit.

Organizations need to conduct a thorough skills analysis otherwise they may begin to see key talent (defined as any individual contributor who plays a key role in the organization) move to positions with other organizations for more pay. Merit budgets hover around 3.5 percent and organizations struggle for the best ways to differentiate pay based on performance, so employees could realistically see an increase of 10 to 15 percent by accepting another job.

Employers are trying to enhance the employee value proposition by distinguishing rewards based on performance. In other words, with the little monies organizations have, the high performers are receiving a bigger piece. However, organizations will soon need to determine if they are willing to “break the bank” to keep this talent.

During economic downturns, employees are pulled by differing motivational pressures. This is where a holistic total rewards approach could play a larger part in the employee’s decision to stay or go.

The Importance of Job Design
It is important to determine how much a job is worth and how much the individual talent within that job is worth. Job design should be considered the cornerstone of any compensation program. If a role is determined to be key within an organization, it is important to ensure the talent within that role satisfies the requirements of the position and the organization is paying well for that talent. Organizations will need to review budgets and determine if additional training will increase employee skills, or if it would be more cost-effective to hire from the outside.

External and Internal Equity
Once job design is factored in, it is important that organizations determine the monetary value of the job. In times of recession, external equity of key positions becomes a focal point. External equity—more frequently called market pricing—is a tool that can be used to survey what the market is paying for a specific position to ensure your organization is paying competitively. If employees perceive that the company down the street pays more than yours does, this will create a major impact on retention as well as attracting a large talent pool. In a down economy, it is vital to keep a pulse on what the market is paying and beware that your organization is not losing its key talent because of stagnant pay.

Most organizations strive to find a balance between internal equity and external competitiveness. Internal equity is another way to assess pay when comparing the salary and value of not only key employees, but also of critical skills or unique positions that are essential to the success of an organization. This could be a buyer for a retail establishment or a programmer with knowledge of a specific program for a software company. Organizations usually command a pay premium over external market rates for these positions or skills. In an economic downturn, organizations need to know which positions are critical and ensure they keep a pulse on market data as well as apply an appropriate premium to retain this group of employees.

Merit and Incentive Pay Matters
Merit pay is often a good alternative to salary increases when the economy is unstable. These programs, where payment is contingent on performance, would only be offered if the employee performs to expectations or above. In order for a merit pay system to work effectively, managers need to be able to differentiate performance and the organization needs to be able to pay for those differences.

Managers often find it difficult to rate a low performer as low—knowing that they will not receive an increase this year. What typically happens is that most employees receive the base increase, with little or no differentiation between high and low performers. This can be a demotivator for high performers and a disincentive for low performers (because there is no real upside potential for high performance).

Even though merit increases have been relatively flat for the past several years, differentiation is attainable. Organizations need to be cognizant of who their high performers are and train managers to differentiate performance—this will lead to a system that will enable true merit pay.

Another tool that organizations will use during a recession is variable pay, or incentive pay, as both a supplement and in lieu of base pay increases. These monies minimize organizational expenses year over year, and still reward employees based on performance.

Outlook for Compensation
As budgets become tighter, more organizations are going to rely on performance differentiation and merit pay to attract, retain and motivate key and critical talent. As profits and revenues shrink, it will be interesting to see what trends emerge in employee compensation. Though trends for the past few years show that employees have a certain level of security at their current jobs and hesitate to leave for another opportunity, it is unlikely that an organization will keep all its employees. When the economy does turn around and profits return to business, look out for any feelings from employees that the organization “owes” them.

About the Author
Jason C. Kovac, Certified Compensation Professional (CCP) and Certified Benefits Professional (CBP), is a practice leader for WorldatWork. As such, he develops instructional course content in the disciplines of compensation regulations, job analysis/documentation/evaluation, base pay management, market pricing, statistical applications, and mergers and acquisitions. Kovac has authored three books:FLSA Compliance: An Overview for the HR Professional ; Job Evaluation: Methods to the Process ; and Elements of Base Pay Administration. He is in the process of writing a fourth book on career development. In addition to writing a monthly column called “Back to Basics” in Workspan magazine, Kovac has been quoted in Dow Jones, CNN Money, East Valley Tribune, Compensation and Benefits, Denver Post, Business and Compensation Solutions ,, and many others. Kovac can be reached at .

Sudden Loss of Leadership: 2/3 Companies Not Prepared

Lack of succession planning is more acute in small- to medium-sized organizations

The benefits of an effective succession plan are seemingly plain to see, but most companies are apparently wearing blinders, according to a recent study by the Institute for Corporate Productivity (i4cp…

The study showed that more than two-thirds of polled organizations are not immediately prepared to fill a suddenly vacated leadership position, and just a third have identified an internal interim successor should their CEO suddenly depart.

Of all respondents, less than half (45%) reported they have a formal succession plan in place, and only 46% conduct regular talent reviews to gauge the readiness of employees who may be counted on to fill leadership roles in short order.

“It’s somewhat surprising to me that more attention isn’t being paid to succession planning issues,” says i4cp executive-in-residence Jim Thomas. “Having the right people prepared to fill key positions is an essential business strategy in this time of fierce competition for talent. The defining moments in a company’s ability to stay competitive may rest in the focus it places on filling key positions with assimilated and capable replacements.”

Large companies, however, are paying closer attention to succession planning issues. When broken down by company size, 66% of organizations with more than 10,000 employees said they are prepared or very prepared to immediately fill a leadership role, while 75% have identified an interim CEO successor. Also, among companies with more than 10,000 workers, 86% reported having a succession plan in place and 69% conduct regular talent reviews.

“I have held executive-level HR positions with several large companies, and the importance placed on succession planning was extremely high,” Thomas says. “It just makes sense. The future successful management of the company depends on the strategic initiative it places on having an integrated succession plan – specifically one that is consistently reviewed and used to fill key positions within the company.”

Of the organizations that have succession plans, 45% have a specific group (HR or other department) overseeing the plan (that number jumps to 74% in companies with more than 10,000 employees), while 39% include the plan in their career planning process. More than 38% review and/or refresh their plans a minimum of every two years, and 38% discuss strategic issues. Asked to describe their planning programs, 27% have an entry-level management trainee program (43% for companies with more than 10,000 workers), 26% have a formal plan for future hiring needs (50% in companies of more than 10,000), and 24% formally measure trainee job performance (41% in companies with upwards of 10,000 employees).

Almost a third of companies that have succession planning programs have had them in place for two or more years, while 23% have a system integrated with other business processes and 20% have a stand-alone succession planning program. For companies with more than 10,000 employees, 55% have programs that have been in place more than two years.

The organizational levels most likely to be addressed in companies of all sizes are at the executive and director levels – both at 45% – followed by CEO and vice president levels at 40%. In large companies, 81% of respondents address the executive level, while 76% include the vice president level and 71% address the director level.

The Taking the Pulse: Succession Planning Survey was conducted by i4cp, in conjunction with, in July 2008. There were a total of 275 respondents. The full results of the survey are available exclusively for all i4cp corporate members.

About i4cp, inc.

i4cp is the world’s largest private network of corporations focused on improving workforce productivity. Our vendor-free community facilitates innovation by giving our members – among the largest and most respected organizations in the world – access to:

1. Peers to spark new ideas and prevent “reinventing the wheel,”

2. Research to enable members to understand current practices and next practices,

3. Tools to put ideas and research into action,

4. Technology to enable members to easily access tailored information and execute workforce strategies.

With more than 40 years of experience and the industry’s largest team of human capital analysts, i4cp is the definitive destination for organizations seeking innovative ways to improve workforce productivity.

# # #

UN to US Grads: Become

Have a readiness to change countries more often than jobs

New York —
United Nations Deputy Secretary-General Mark Malloch Brown called on New York University (NYU) graduates to fully engage with the world as true “global citizens” and live up to the words of former United States President Franklin D. Roosevelt by casting aside isolationism.

Speaking at the commencement of the University’s School of Continuing and Professional Education, which included the first batch of graduates from the Program of Global Affairs, Mr. Malloch Brown praised the students for their “determination and initiative” to pursue further studies and a career at the same time, and recalled his own experiences relating to continuing education.

“As a former chief of the UN Development Programme, I have a particular perspective on continuing education: that of the countries of Southern Africa as they emerged from long and vicious civil wars. In places like Mozambique and Namibia, many of today’s leaders spent their traditional university years in the bush as freedom fighters. Yet when justice and democracy were established, many of the rebels went back to school,” he said.

“Mozambique became, almost literally, a country governed by continuing education. The determination to learn reflected a determination to rebuild. To put the war years behind them and to regain lost ground, Mozambicans decided that it was never too late to learn, to go to school, to set a new course for themselves.”

Recalling these examples, Mr. Malloch Brown told the students that their studies in NYU’s classrooms “should be the beginning, not the end, of a lifetime of learning,” adding that his own continuing education has been based on a sense of “global citizenship – a readiness to change countries more often than jobs.”

He also outlined the breadth of the UN’s work, from promoting democracy and literacy, encouraging investment and trade, to ensuring decent education, checking nuclear proliferation and combating bird flu, highlighting that whatever the students’ fields of study, the world body’s work “concerns all of you.”

“More than half a century ago a great New Yorker, President Franklin D. Roosevelt, made a passionate plea for America’s global engagement. ‘We have learned that we cannot live alone, at peace; that our own well-being is dependent on the well-being of other nations, far away,’ he declared. ‘We have learned that we must live as men, and not as ostriches, nor as dogs in the manger. We have learned to be citizens of the world, members of the human community.’ ”

The Deputy Secretary-General voiced hope that the graduates would “continue to represent not just the ideals of this University and the vibrancy of this city, but also the exhortation of President Roosevelt,” adding “that, ultimately, is the charge of global citizenship.”

euro Workplace Options

LONDON — Accor Services ( and Workplace Options announce that Employee Advisory Resource (EAR), ( one of the UK’s leading providers of Employee Assistance Programmes (EAP) and Work-Life services, will join forces with Workplace Options (WPO), the largest provider of Work-Life employee benefits in the United States and a current partner of Accor Services.

This strategic partnership will allow EAR’s growing portfolio of global clients to quickly and effectively extend coverage of their employee benefits outside the UK. It will allow WPO’s EAP clients to expand their work-life services internationally and will provide them with access to an extensive network of behavioral health providers throughout Europe. These combined forces will now be able to share ideas and investments, in order to bring innovative new products to the two most dynamic marketplaces for work-life and employee support services.

The partnership reinforces Accor Services’ global EAP/Work-Life strategy, which seeks to leverage shared quality/service standards and technology platforms with a strong local presence. Accor Services currently has EAP/Work-Life subsidiaries in the UK, the US, Australia and France. In addition, its rapidly expanding international network of affiliate partners enables Accor Services to provide EAP coverage in more than 35 countries and to reaffirm its leadership in the global HR benefit market.

Laurent Delmas, Managing Director of Accor Services UK, said: “Our portfolio of international Blue Chip clients is increasingly telling us they need innovative products and services of the highest quality which are consistent across the geographies in which they operate. This is exactly what this partnership will deliver to our clients and their employees.”

Workplace Options’ Chief Executive Officer Dean Debnam said: “This is an exciting development for both existing and prospective clients of Employee Advisory Resource and Workplace Options. Through this innovative partnership, leading global businesses will get the benefits of one contract to cover their employees in more than 35 countries.”

“We are delighted to offer a truly international work-life service to our clients in the U.S.,” said Alan King, president of WPO. “This also allows us to expand our emindhealth network to include mental health professionals in 12 European countries.” For further information please contact: Sandy Egan, Director of Service Promotion at (919)834-6506 x2161

Accor Services designs, develops and manages innovative solutions which combine personal aspirations of employee with employer’s productivity objectives. Over 340,000 organizations and 21 million employees in 35 countries use our services. Accor Services belongs to the Accor Group, a public company with more than £5 billion revenues worldwide.

Employee Advisory Resource (EAR) is the pioneer of EAP in Europe, established in 1981. EAR’s integrated approach to EAP includes a wide portfolio of services, including counseling, information services, management consulting, training and coaching. EAR has a track record of service innovation, including ManagerAssist™ and EAPDirect™, the UK’s leading Internet based EAP and Work-Life service. Over 300 organisations across Europe take advantage of EAR’s services.

Workplace Options (WPO) is America’s largest provider of Work-Life services and software that help EAPs and other third parties run their business more profitably and efficiently. Founded in 1982 and servicing nearly 15 million employees and their families, WPO is recognized for its innovative web delivery capabilities, flexibility and affordable pricing models.

Behavior Interviews in an Intercultural Context

Maureen Rabotin, CEO and founder
Effective Global Leadership •

The behavioral interview technique — one used by employers to evaluate a candidate’s past experiences and behaviors in order to determine their future potential for success — is once again on the rise in companies across the U.S. According to Career Services at SUNY Brockport, currently 30 percent of all organizations are using behavioral interviewing techniques in some manner.

Why is this technique so popular? Because, presumably, it works. U.S-based surveys like that done by Quintessential Careers mentioned in the article titled Behavioral Interviewing Strategies for Job-Seekers by Katharine Hansen have shown that behavior interviewing is 55 percent predictive of future on-the-job behavior, while traditional interviewing is only 10 percent predictive.

Another factor contributing to the growing use of behavior interviewing, according to a December 2007 survey conducted by the Novations Group, is the broad demographic shift underway in the workplace. According to Tim Vigue, Novations executive consultant, “An increasingly diverse talent pool demands that organizations hire the best from the broadest possible pool. To do so employers have to use objective methods that won’t screen out qualified candidates due to bias.”

Implied then is the fact that behavior interviews are fair and take into account the diversity of applicants. But, do behavior interviews take into account the diversity of the job for which the candidate is interviewing? Does the popular technique consider the intercultural contexts of the job? Can behavioral interview questions accurately assess whether a candidate’s past experiences will predict success or failure in an intercultural, international assignment?

Bob’s Behavior and What It Tells Us About Our Own

Meet Bob. Bob graduated at the top of his class at one of the most prestigious universities in Texas and then went on to finish his MBA while maintaining a rigorous and demanding position at a top corporation in the food industry. Bob’s greatest asset was his charismatic approach; he was a real down-to-earth, people person — and the company had taken notice. Bob was up for an international assignment and passed the interview (which included both conventional and behavior-based questions) with flying colors.

Here is an example of how Bob thought he had nailed the interview. When he was asked by the interviewer, “What do you do when working on a tight schedule with several priorities? Give an example of how you handle this,” he responded like a S.T.A.R. Bob’s answer started with the perfect Situation, moved into dealing with a specific Task, and went on to explain his Action orientation on prioritizing projects to meet deadlines and the successful Result of surpassing expectations. In fact, his response went something like this: “Due to extenuating circumstances, our team project was moving forward on a very tight schedule. The project was nearing deadline. Two of the team members had sales forecasts to finish up for a meeting the following Monday. With my urging, the team agreed to stay late, work through dinner and meet late Sunday to wrap up both our sales forecasts and tie up some loose ends on a procurement proposal that needed to be revised. By gearing up the team’s motivation through commitment and accountability, we were able to easily finish everything with time to spare. By Monday morning, everyone was satisfied with the results. Of course, this is not my preferred way of time management, but when everyone on the team is motivated, you can move mountains.”

Bob seemed to have the perfect U.S. corporate culture, “can-do” attitude. That, however, turned out to be the problem.

Bob got the job and was hired to run the newly acquired Spanish office in Madrid. After several “discussions” with his superiors, Bob was brought back to reassume his position in the U.S.

Why did he fail at his international assignment?

According to the HR director at the Madrid office, “We hire people who resemble us.” In the Madrid office, a sure hire’s response would be more in tune with family values (paternalistic), personal honor and dignity. In Spain, human relations count far more than logic or efficiency. Spaniards influence colleagues with personal appeal — not rules, regulations or deadlines. They do not like being rushed and no one is ever too busy when asked to lend an ear. Thus, in Spain, when a candidate is asked, “What do you do when working on a tight schedule with several priorities? Give an example of how you handle this,” a S.T.A.R. might give the following answer: “When our project team was working on a tight schedule, we knew that the deadlines were out of reach. Knowing that the extenuating circumstances were beyond our control, there was little we could do to meet the deadlines imposed by headquarters. To ease everybody’s sense of urgency and stress, I made sure that the team members were following the instructions I had clearly defined for them at the outset of the project. Plus, they knew they could count on me to take the responsibility for any delays. We worked late into the night preparing some presentations to explain where the project was expected to be delayed, and of course, we finished our sales forecasts for the upcoming year.”

See the marked difference in the responses? Bob’s efficiency was totally out of synch with the relationship-building, hierarchal and paternalistic structure of the newly acquired Spanish company — a company that needed a culturally sensitive, effective manager (especially during the integration phase), not an achievement and profitability-focused number cruncher.

The reason that the company could not determine if Bob’s style and approach would integrate well with the Spanish division is because the right questions weren’t evaluated in the right contexts. The behavioral interview questions were evaluated ethnocentrically, giving great credit to answers that could only be predictive of success or failure in U.S-based positions. So, is behavior interviewing effective when screening for international positions? The answer is yes, but with modifications.

A Different Paradigm Calls for Different Questions, Different Evaluation Contexts

The behavior interview is based on the theory that past behavior is often a good indicator of future behavior. By framing questions on knowledge, skills and abilities that are the basis of the competencies needed for the required position, the results should show how well a candidate may or may not succeed in the position. But, how do we interpret answers that indicate success in international positions when the questions are written and asked within a U.S. paradigm? How do we assess the “right” answer if the evaluation is not culturally adapted for the position? We educate the interviewer, ask different questions and listen for different answers.

First, educate the interviewer about this paradigm shift. This involves:

• A comprehensive understanding of the position’s location and culture

• An understanding of the behavioral skill sets required to succeed in a position located in a country with a completely different cultural context

• Homework — proper probing of the candidate’s previous expatriate or international assignments

• An understanding and awareness of one’s own cultural biases, pre-conceived judgments, values and assumptions

• A consideration of the cultural frameworks and job “fit” of the candidate’s national culture compared to that of the destination country

• An appreciation of the adaptability and flexibility particular to a candidate with previous expatriate experience

• Insight into what makes a person successful in international assignments, especially those who have been on the global nomad track, sacrificing family and home security for challenges and the need to add value to the global organization ( i.e., how do characteristics like independence and self-reliance work with a group-oriented, family-style culture?)

• Familiarity — interviewers of applicants for international positions should have had an expatriate or international experience of their own in order to better frame their questions

• Language proficiency — interviewers who speak more than one language are preferred so there is a sensibility with respect to vocabulary, articulation and word choice

Secondly, think through how to elicit the responses you need to make a determination. For example, if you know that to succeed in this position, a candidate must be a team player, discover unique ways to phrase questions that will prompt the candidate to speak about collaborative experiences. As you brainstorm questions, choose situations and words that work within an international context. If this process causes you anxiety, enlist the help of a cross cultural training consultant who is familiar with the cultural contexts of myriad international locations.

As an example, Bob’s interviewer should have know that to succeed in business in Madrid, an understanding of the following were required: a hierarchical system; family-first culture; flexible attitudes with respect to time and physical closeness; national and personal pride; and care and concern for others. Thus, examples of the questions he/she could have asked to determine if Bob had these understandings include:

• Tell me about a time when you felt pressured for time and a colleague needed to discuss an issue with you. How did you react? What options did you consider? (Answers would speak to time management in a polychronic culture.) :

• Give me an example when you felt frustrated over an ethical decision by your superior or departmental manager. What actions did you take to resolve your inner conflict? (Answers would speak to hierarchy issues in a protocol-oriented culture.) :

• Give me an example when family matters prevented you from giving your utmost at work. How did you handle that? How would you handle that situation if it involved an employee? (Answers would speak to time in relation to a family-oriented, work-to-live culture.) :

Next, draft the questions and have an HR counterpart at the international destination review them for cultural context and sensitivity.

Finally, analyze the candidate’s answers with the destination HR counterpart and with a wide lens. Based on the candidate’s answers, evaluate:

• How will this candidate’s behaviors be perceived by colleagues and superiors within this context? :

• How well do the candidate’s characteristics translate across cultural and linguistic boundaries? :

• How well will this candidate fit into the new organizational culture? :

• How capable will this candidate be in influencing local team players? In developing senior, local and regional-based employees? :

• How will this candidate recognize the motivational drivers of the employees in the new contexts? :

• What level of observation skills does this candidate have? How comfortable is he/she with listening more than talking, observing more than participating? :

• What will need to be taken into consideration if this candidate is accepted for this international assignment? Is there a dual career issue? An aging parent concern? Childcare and educational issues to take into account? :

• In general, what are the risks, what is the potential for success? What is the cost of early repatriation to the company? • :

Although our Western-style need to standardize, structure and measure performance will resist change, we need to remind ourselves that in an increasingly flattened world, change is necessary. In today’s global marketplace, we must take into consideration the context within which we measure success. This means rethinking the behavioral interview process when it comes to interviewing candidates for international assignments and taking a long, hard look at the ethnocentrism that has pervaded the hiring process for far too long. The result will be better hires and a faster integration of corporate and functional cultures in a boundary-less world.

Maureen Rabotin, CEO and founder of Effective Global Leadership, is a Global Executive Coach and Cross Cultural Training Consultant. She has coached and trained more than 450 global leaders representing 125 Fortune 500 companies. For more information, please visit