Author: Charlene Solomon

You know the seamy images, the squalidstereotypes. There’s nothing pretty about sweatshops in Latin America or childlabor in Africa. There’s nothing pleasing about downsizing American jobs andmoving them so work can be performed more cheaply elsewhere.

    Daily, we read aboutcompanies that are moving offshore to take advantage of cheaper labor in anynumber of industries: apparel, toys, electronics, small equipment. There’sevidence of it everywhere, and it’s clear that searching worldwide forpersonnel – as well as production capability – isn’t a new phenomenon. It’sjust occurring at a fast-forward pace in this increasingly borderlessmarketplace.

    But consider this:Those dramatic images are only part of an intricate puzzle of possibilities whenlabor moves from shore to shore in the global marketplace. When you think aboutmoving jobs overseas, the focus is often on those who are losing jobs in theUnited States and on the negative impact American businesses may have in othercountries. But, like puzzle pieces that form an integrated whole, it sometimestakes a little distance, some perspective, and a different outlook to view theentire picture and see the positives along with the negatives. Of course, thefollowing discussion assumes that the companies seeking labor abroad areresponsible and ethical in their treatment of both U.S. and foreign workers.

    Contrary to popularthought, moving labor offshore isn’t all bad. In fact, it’s often very goodfor business. As jobs move offshore from the United States, they not only allowU.S. manufacturers to procure cheaper labor abroad, but they also free up talentwithin the U.S. that can be reskilled and used elsewhere in this tight labormarket. Furthermore, it’s not only the U.S. that’s moving jobs. At the sametime we move jobs offshore, so do other countries whose businesses are lookingfor lower-priced workers. In many cases, some of them, such as Japanese andGerman automakers, move into the U.S.

    Indeed, today’srealities intertwine strategic business and financial goals with complicatedhuman resources issues. This requires looking at HR management from a macroperspective. HR may find itself responsible for such tasks as: reallocatingtalent to needed positions, integrating offshore employees in ways that makesense to the overall goals of the company, and creating training that will helpdisplaced American workers learn new skills while accomplishing business needs.

    “It’s a verycompetitive world now, and if you want to stay in business, you have to look atthe cost of doing business and the cost of labor from that perspective,” saysPatrick Morgan, global staffing manager for San Francisco-based Bechtel Corp.“In my mind, global sourcing of workers is the next level of outsourcing. Infact, you can see it as a competitive advantage.”

 

This isn’t new
   Jobs migrating in search of cheaperlabor has been happening for decades. The kinds of jobs that migrate used to bethe ones that were low-skilled and labor intensive, such as assembly of smallappliances, apparel and agriculture. However, with the dearth of available labortoday, some jobs that are being moved overseas are more highly skilled, such aspositions within the information technology sector.

“TheUnited States has been losing textile workers for the last five decades,” saysKen Goldstein, economist for The Conference Board, based in New York City.“[American business] started moving jobs out of textile mills in Massachusettsand into South Carolina in the 1930s when it became apparent that businessescould find workers who could do the jobs and also get them to work for lessmoney per hour. After that, jobs started migrating to other countries, as well.

    “What’s going on in the ’80s and’90s,” Goldstein continues, “is that companies can find people in Hondurasor Belize who can do the work for even less. It actually costs less to haveclothes sewn and stamped in Honduras and then shipped to the United States thanto have the work performed in South Carolina and shipped to a [domestic] outlet.It’s the same as it’s always been, but now it’s between at least two orthree international borders.”

    In fact, many jobs first migrated toMexico. But there was such demand for labor in textiles and agriculture that itdrove up the cost of Mexican wages, and the jobs moved to other countries.Similarly, in Europe, jobs usually go to East Germany, and when they get tooexpensive, they move to Bulgaria and the Ukraine. In Asia, when they leaveJapan, they go to Korea and to Indonesia or Malaysia. The migration is a globalphenomenon.

    The reason? In post-industrialsocieties, such as the U.S., Japan and Western Europe, it’s simply tooexpensive today to perform low-tech, labor-intensive work. The jobs then moveoffshore, and the ones that remain tend to have their wage rates driven down tothe going rates in the global marketplace.

 

Working with the puzzle pieces
   There’s a concept called creativedestruction, in which new situations are enabled because old conditions aredestroyed, which makes room for change. You can think of it like a good puzzle;the challenge is to continually move pieces around to make room for others,which will complete the design. In this business case, when one industry goesout of business in a particular country, the money and the workforce getrefocused elsewhere.

    Here’s the way it works. As early asthe late 1950s, the United States had roughly 20 million blue-collarmanufacturing workers in a workforce of about 60 million. Today, those 20million blue-collar manufacturing workers are in a workforce of about 130million. Essentially, for over a generation, the only workers who found jobs inthese blue-collar factories were the first sons who replaced their fathers. Thesecond and third sons, and all the daughters, went to work in other industries.Because of the change in needs, the workforce had its energy refocused frommanufacturing to service.

    At the same time, when you look at thejob creation rate in the United States in the last few years, you find thoserates are higher than the job creation rates in a lot of other countries.“You’ve had a much freer mobility of these jobs than you would’ve hadpreviously,” says David Lewin, Neil Jacoby Professor of Management, HumanResources and Organizational Behavior at the Anderson School of Business atUCLA. In other words, workers are more assured of jobs because more jobs arebeing created. “By the same token, the American workforce has benefited by themovement of jobs to the States by many other countries, especially Japan andGermany,” says Lewin. “There’s also been a great rate of job expansion inthe U.S. fueled by startups and the newer entrepreneurial ventures.”

    According to Lewin, the United Statesis adding approximately 3 million jobs a year, thus increasing total employmentby 3 million on a base of about 130 million. This is a 3 percent to 4 percentincrease a year, whereas European job creation rates are 0 percent or 1 percent.“You find a much more fluid labor market in the United States,” says Lewin.“A lot of companies – both domestic and international – are attracted byemployees who easily move from job to job because it means that if there’s adownturn in demand, or other changes occur where you’d want to reduce yourworkforce, you’re able to do that with few obstacles.” The stringent laborregulations in many other nations won’t allow employers to terminate employeeswithout severe consequences.

 

How do jobs move?
   For jobs to migrate, two interlockingparts of the puzzle have to be present. First, although these are low-tech,labor-intensive and relatively low-skilled jobs, there must be a sufficientlyskilled workforce to accomplish the work. Then this labor force must have wagelevels that are low. Interestingly, the lower-wage jobs are always the mostvulnerable to migrate. So the process is a continuous one.

    Two types of jobs are less susceptibleto migration. One kind requires a highly skilled workforce, such as high-tech orscientific endeavors. The other, less vulnerable jobs are sufficientlycustomized so that operations need to be near the place where the product orservice is actually going to be used.

    For example, in Birmingham, Alabama,where a lot of customized steel is manufactured, companies are less susceptibleto job loss even though long rolls of standard steel can be manufacturedanywhere and shipped to the U.S. This is because specialty steel is cut to thecustomer’s request and is difficult to move. It’s easier to keep the productnear the customers, and therefore, the jobs stay put.

    The automotive industry, for instance,provides an example of how labor and manufacturing are part of a complex web ofactivity. Instead of manufacturing being done exclusively offshore, someautomotive parts are manufactured in Detroit and Dearborn, Michigan, thenshipped to Mexico where processing and assembly occurs, then shipped back tohave other items completed and to be stamped, “Made in the USA.” This alsohappens in the electronics industry, and even in some kinds of agriculture(although most of these jobs remain completely outside the U.S.).

 

Issues for domestic and internationalHR
    “The point is we’ve freed up laborfrom some processes in this creative destruction process, and in turn, not justcreated new jobs, but new services that people hadn’t thought of before anddidn’t even know that they wanted,” says The Conference Board’s Goldstein.“It’s irreversible. It’s not going to go back to the way it was, and allwe can do is argue about whether we can or should speed it up or slow itdown.”

    It becomes HR’s responsibility tohelp all workers change – to adapt to the new global business environment and toreskill to be valuable in the organization.

    “A positive argument can be made thatwhen companies follow these macroeconomic trends and go offshore, they create ablessing in disguise. First, they release talented, able workers into this tightlabor market. Human resource staffs within organizations can make more efficientuse of their skills. Secondly, this allows U.S. workers in low-skilled jobs tobe allocated to other areas where there’s a higher demand,” says Diego J.Veitia, chairman and CEO of Winter Park Florida-based International AssetsHolding Corporation.

    The key, of course, is training thedomestic workforce. And HR must play a role that continually allows theworkforce to learn and build their talents for the changing global organization.Twenty years ago, there were draftsmen with pencil drawings. Unless they learnedhow to do the same function on the computer, they were no longer employed.

    Another critical issue is where and howto use talented people. Bechtel Corp. is one company that’s been dealing withsourcing labor in unique ways. The company forms teams for projects that finishquickly, and then the groups are demobilized when the undertaking isaccomplished. For example, they have copper and gold mines in Chile.Historically they’d do all the engineering, design and equipment purchase inthe U.S. and send construction people to work with employees in Chile to build aplant. These days, Bechtel does the conceptual engineering in the United States,and hires Chilean mechanical and electrical engineers to do all the detailengineering in Chile.

    There are advantages to this approach,beyond the lower-priced labor. “When you start with a clean sheet of paper,you can leapfrog technology and go to the state-of-the art instead of simplybuilding on what’s already in place,” says Morgan. “It’s gotten to thestage where some of the people doing the work are so experienced that we’rebringing them to San Francisco so they can help us move to the next stage. Infact, some of the local engineers often give you a better product because theyunderstand what’s going on locally.”

    However, communicating with your staffis crucial to a successful endeavor. You want to explain the reasons whyyou’re considering moving labor and emphasize that it doesn’t necessarilymean jobs will be lost in the United States (unless that’s the case). Explainthe strategic plans and the need for individuals to develop their skill sets.

    And remember that communication ismultidirectional. In other words, you need to listen to what’s coming backfrom employees. What are their concerns? What are their reactions? Have amechanism built in to address those worries, which usually focus on the fear oflosing their jobs. Listen. And respond.

    Certainly, with the complicated,intertwined succession of global mobility leading to dissolution and creation ofjobs, the role of HR is central. Having a more complete understanding of all thepuzzle pieces can help HR professionals position and communicate offshorestaffing as a positive rather than a negative solution. And that’s somethingthat ultimately moves the workforce and the organization closer to globalizationand the emerging world economy.

Workforce, July 1999, Vol.78, No. 7, pp. 50-55  SubscribeNow!

When your company explores the possibility ofmoving operations to another country, there are myriad issues to ponder. Hereare crucial elements to consider: 

• Tap into your network to draw on the expertise of other organizations about the legalities and challenges they’ve faced when they employed people outside the United States.

 

• Benchmark against experienced, competitive-practice companies to see if they’ve chosen to source labor overseas and what they have done to make it successful. See if you can find colleagues to speak with.

 

• Remember that wages aren’t the only issue. Be sure you have access to the kind of labor force that has the skills your company needs. You don’t want to be surprised that the skills you need aren’t available.

 

• Approach the experience with an attitude of caution. Adopt a “toe-in-the-water” perspective to become familiar with offshore markets. You might start with a joint venture or subcontractor to build your experience in the area.

 

• Hire qualified people from the time you begin staffing your operations.

 

• Consider moving only a part of your work overseas as you ease into the new location.

 

• Remember the basics – learn about compensation, culture, language, laws and tax regulations before you start operations in other countries.

Workforce,July 1999, Vol. 78, No. 7, p. 52  SubscribeNow!

 

Choose your survey.Select your research. No matter where you look, vast numbers of workerscurrently don’t have the skills for today’s jobs – and it’s only going toget worse.

   Moreover, employees today must have access to continual training of all typesjust to keep up. Sometimes it feels like a sporting event – trying to run up adownward escalator. If you don’t actively stride against the momentum ofskills deficiency, you lose ground. If your workers stand still, your firm willlose the competency race.

   “Continual learning” is no longer a buzzword – today it’s a businessrequirement of critical importance. According to a Workforce survey in May 1998,100 percent of the respondents said that workers will need more problem-solvingskills in the future; 95 percent said they expect the HR department to helpemployees develop these skills in conjunction with employees developing them ontheir own. A whopping 98 percent believe that employees will need moreinterpersonal communication skills than they currently have.

    Addto these figures the fact that huge numbers of entry-level workers are cominginto the workplace ill-equipped to handle everyday jobs, and it becomesglaringly apparent that learning and continual education must be a top priorityfor all organizations striving to achieve a competitive edge.

    Butdon’t think that HR has to go it alone. Today, employees and employers sharemutually in the benefits and expenditures associated with learning initiatives.Progressive, front-running companies view learning as a joint activity withequal commitment from both sides. For example, companies such as Johnson &Johnson, IBM and EDS create corporate cultures that support and enhancelearning. They take a strategic approach to continuous learning, and they deviseways to partner with employees in their learning endeavors.

   “As you look at today’s competitive environment, one of the critical needsis for the organization to continue to learn. First you have to constantly helpemployees build the skills they need to be proficient at their current job.Then, if you want to be an employer of choice, you have to create a workenvironment in which people can continue to grow,” says Michael Carey, vicepresident Organization Planning and Development at New Brunswick, NewJersey-based Johnson & Johnson.

   Indeed, HR pros are examining how to learn in entirely new ways. “Work ismoving faster and faster, and people can’t keep up,” says Nancy Forbes,market research manager at the Atlanta office for New York-based IBMCorporation. “But I think it’s a shared responsibility – it’s theindividual’s obligation to pursue and make the most of the continuous learningthat’s available, and managers have to support them with the tools and timeoff [for learning and training activities].”

 

Learning is part of the corporate culture
    For decades, technologygiant IBM has created a continuous learning culture. The company offers at least40 hours a year of training per employee (compared to an average number of fourdays of training, according to the 1997 ASTD Benchmarking Forum by the AmericanSociety for Training and Development).

    In today’s businessenvironment, where you must change and adapt so quickly, transformation has tobe the focus of learning. People can learn all of the skills they need in a newenvironment, but that learning could be wasted if they don’t see the value inskill development. They have to believe that learning is important and sharinginformation with colleagues is beneficial.

    Building a corporateenvironment in which people share information is essential. Like a relay event,it creates a chain of education between individual contributors, and enhanceseach individual’s contribution. “If you want to develop a culture thatsupports learning, you first start by rewarding and promoting team players whoare learning continually, and sharing their knowledge with each other,” saysJackie Fenn, vice president and research director of Advanced Technologies atBurlington, Massachusetts-based Gardner Group. “It’s important to show thatcontinuous learning and sharing learned experiences between contributors isobserved and rewarded by management.”

    When you create anenvironment that encourages continuous learning, where people recognize thelong-term benefits and want to participate in the experience, the specifictechniques used for education and training are secondary – it’s attitudethat’s important. That has to come from the top.

Companies take a strategic approach to learning
    If learning is part ofthe company’s mission, it must be integrated at a strategic level. IBMillustrates how to accomplish that. First, the company determines whatcompetencies are needed most in the marketplace. This multi-step processincludes researching the current market by working with salespeople, customerservice people and technicians, and talking with customers every day tounderstand their needs.

    Another important stepis to research future trends and identify short and long-term competencyrequirements. For example, IBM sees e-commerce (conducting transactions over theInternet) as becoming more critical in the daily lives of individuals.Therefore, the organization is taking steps to eliminate potential workforceperformance gaps in order to ensure employees have the skills they need toenhance that part of the business. They then determine what performance andskills the business needs to maximize opportunities in this growing area. 

    That process, in and ofitself, is a huge endeavor for HR, but well worth the investment of time andresources. When you conduct a gap analysis, you can then accurately determine astaffing and development plan to address deficient areas. However, putting theplan in action can be the biggest challenge. “In my experience, you can talkabout theories and you can write wonderful strategies, but the execution – theimplementation – is really the difficult part,” says Robert Weintraub, managerof Learning Strategy for IBM Global Services in Selmers, New York.

    Indeed, implementationis the major hurdle in this feat. HR managers at IBM now decide how to helpdevelop people – to give them the skills, tools and appropriate infrastructure -to maintain a competitive edge and differentiate IBM. Obviously, all of this iswithin the context of business demands. For instance, the company used toemphasize traditional training, but that can’t be the exclusive trainingapproach any longer.

    “We can’t afford totake people away from their jobs and they can’t afford to leave them,” saysWeintraub. “They have to be onsite with customers or in laboratories orwherever they may be assigned.” So although IBM still brings 10,000 to 15,000people to their learning campuses annually, they’ve also developed technologyto enable different ways to learn. Employees use interactive television andcomputer-based training. But, that’s still taking the person away from thejob, even if it is modularized and they can do it in sections. So the companyhas developed what they call Learning Space, where courses and professors exist,but the system is asynchronous. This means that the instructor sets up deadlinesand content, and students manage the scheduling based on personal convenience.

    Another initiative inits infancy at IBM is retraining its trainers to be learning facilitators.Educators in the classroom are put on project teams (sometimes on teams withcustomers) to help facilitate learning. These educators understand the learningrequirements, and determine how many formal sessions and other informal learningactivities are needed to support learning objectives. Mentors also work withindividuals face to face, over the phone and through technology in anapprentice-type situation.

 

Create ways topartner with employees to increase their competencies
    “We make afundamental assumption that improving our capacity to learn, grow and adapt willbring us competitive advantage in our marketplace,” says Betty Black, managerof the Account Leadership Program for Plano, Texas-based EDS. “Partnering withour employees will result in a satisfied customer and an increase in profits.Any given technology becomes obsolete very quickly, so really it’s ourcapacity to change and learn that is a competitive differentiation for us.”

    EDS enhances continuouslearning through a two-pronged approach, which begins with a partnership betweenthe company and its employees. Part of the approach relates to mindset orculture. How do you create a corporate culture that establishes continuouslearning as a core business value? One key element is senior leadershipcommitment. Another is building awareness through ongoing communication. “Thechairman of our company, Les Alberthal, said, ‘EDS is nothing more than whatits people do and say on any given day.’ So it’s important that our skillsare honed to meet our customers’ business needs,” reiterates Black.

    EDS began creating thiscontinual learning partnership when they implemented several transformationalprograms. These focused on mindset and organizational issues emanating fromPeter Senge’s The Fifth Discipline: The Art & Practice of the LearningOrganization (Doubleday/Currency, 1990). After that, the company began lookingat alternative ways to learn in addition to traditional lectures. Central tothis mindset was to understand different learning styles and to incorporatethose styles into the culture.

    “We’ve reallyemphasized the mutual responsibility between manager and employee,” saysJennifer Dominguez, director of Training and Education of EDS. Managers aretheir coach and guide, but the employee takes charge of the learning and thecareer development.

    While the organizationspends time and energy to create a mindset that values constant learning, EDSalso has standardized systems in place to make continuous learning a reality.One of the key tools is the Career Resource System, which has four components.

    First, employees areprovided with a job family matrix, which defines the skills needed for each typeof job, and skills required to progress to the next level. Theperformance-review tool is the second piece, and gives employees feedback frompeers, managers and teammates.

    The third piece is thecareer planner, which helps employees stay on track with their future goals andinterests. Lastly, employees can access an automated career library throughCD-ROM or the Internet.

    Johnson & Johnsonalso supports a strong learning partnership with employees. In addition to beingrecognized as a front-runner in terms of development, the New Brunswick, NewJersey-based company is also known to be quite generous in the way it approachespartnership. “We say J&J people have shared responsibility in theirdevelopment. The company will provide the environment, the tools and theresources, but employees have to show the energy, the interest and the drive togo forward,” says Carey.

    One unique approachJ&J uses to enhance learning resources is their involvement in asophisticated interactive Web site, called TalentAlliance. The Web site allows participants from many different companies toexamine long and short-term career planning, skill building and personaldevelopment. There’s also a section devoted to assessment where individualsmay choose to ask for feedback from colleagues and be reviewed by peers andsupervisors on a confidential basis.

    There are multipleadvantages to using this type of technology. The self-directed skill-competencysections allow individuals to benchmark against others who are inside andoutside their corporation. It’s also completely self-initiated and paced atthe individual’s speed. It encourages individuals to develop their skills andcontinuously learn. It spurs motivated workers to pursue a panoply ofeducational possibilities that will continue to make them employable in the longrun.

    “If you’re nothelping your people improve, they’re losing ground,” says Carey. And keepingpace in this breakneck gallop with constant change and learning is a tandem raceindeed.

Workforce,April 1999, Vol. 78, No. 4, pp. 66-68  SubscribeNow!

Staffing
Though the first instinct of multinational management is to replace expensive expatriates with local nationals or repatriate them entirely, HR must look at the overall strategic plan to see what’s really sensible. “You need to have a vision of opportunity and look through the crisis to find different ways to keep the business moving forward,” says Bill Hensel, a spokesperson for Atlanta-based Coca Cola Co. This is especially so in the current HR condition, in which one sector is troubled by one set of events and another is affected by different circumstances. Look at each location within the context of a general staffing plan, not simply responding to save money now.

For example, Coca Cola saw a staffing opportunity in one of its facilities in China when a bank closed, leaving a large staff of educated, out-of-work employees. Seizing this chance, Coca Cola hired the workers because finding good, trainable human capital is very difficult. The company saw it as a long-term staffing advantage to retain them in their cadre of talent.

Playing with various scenarios, short- and long-term, HR can help determine the key skills of particular jobs and which jobs are crucial to long-term health of the organization. Once determined, HR should determine if, and which, positions are expendable if the company needs to cut back on personnel.

Retention
When business slows and the air is charged with fear of cut-backs and downsizing, retention of valuable employees becomes even more critical. Not only is communication to the workforce essential, but it’s a time when valued programs and benefits to employees should be emphasized and highlighted. Retaining key people becomes pivotal in these volatile times where fears and a tight labor market co-exist.

While more and more organizations are realizing that retention is a strategic issue that is most effectively addressed as a corporate-wide initiative, it is especially important at the outset of an international assignment. Careful career development and planning, as well as the more typical rewards and incentives, can be powerful retention tools.

Compensation
Compensation for international assignees and local nationals is more complex than ever because the environment is more eruptive and changeable. Equity issues, legal factors and taxes are ever more complicated. Also different is the thought process that used to prevail in which an international assignment was tied to a financial incentive. Now, being globally mobile is more directly related to career direction, and expat compensation can be approached with that in mind.

A recent survey by New York City-based William M. Mercer Companies LLC reflects the Asian downturn in salary and wages. These changes reflect business slowing and the increasing unemployment in these areas. Again, compensation is a illustrative of the volatility of the region.

Corporate Culture
As guardians, caretakers and enhancers of the corporate culture, HR may want to consider this period as an opportunity to communicate corporate values as they relate to globalization efforts. It is also a good time to clearly communicate the organization’s situation and its response to this tumultuous situation. In fact, each company is affected so differently than others that it would be a good time to stop any misinterpretation from more general news sources.

Global Workforce, January 1999, Vol. 4, No. 1, p. 9.

The current economic outlook? Today, all significant international markets, with the exception of Europe, are slowing. Economic growth will remain soft and will significantly impact worldwide activity. In 1997, the world economy grew 4.2 percent. In 1998, it grew approximately 2 percent. The International Monetary Fund expects it to grow to 2.5 percent in 1999.

“Time has to pass,” says Mitchell Held, co-manager of U.S. Economic Research for New York City-based Salomon Smith Barney Holdings Inc. “We have to see some shutting of capacity worldwide. We have to see some reform in banking systems in Asia and some proper policy movements in Latin America.”

Asia
Analysts concur: Asian countries currently in recession will continue in this downturn well into 1999, but possibly at a lesser rate of decline. The countries that were hardest hit include Malaysia, Indonesia, the Philippines, Korea and Thailand. Asia Pacific will go from 6.6 percent growth to 1.6 percent growth. In fact, the “Asian Economic Survey” (a special report by Wall Street Journal Interactive) paints a dismal picture of continued contraction in the region for the next year. However, currencies appear to have stabilized, and China, Taiwan and India will have respectable growth rates.

According to Gerald D. Cohen, senior economist at New York City-based Merrill Lynch, the most significant Asian economy to the U.S.—Japan—will experience difficulties, albeit necessary ones that will differ from the rest of the region. “Hopefully [Japan’s] economy won’t shrink significantly more in 1999 [than in 1998]. But if the Japanese get their Reform Bill on line, that will actually lead to more job loss and more slowdown,” he says. “If they close banks, it will lead to bankruptcy in banks, and it will lead to bankruptcies in corporations as they write off bad loans. You will see a slow down before you see a pick up.”

The Asia situation will continue to bottom-out over the next few quarters, and then analysts predict a protracted bottom before it turns around. In the next couple of years, a lot of the problems (related to overbuilding and excess investment) will be addressed and growth will begin to pick up.

Europe
On January 4, 1999, the euro becomes a legitimate currency, trading in 11 countries (see “The Euro—It’s No Small Change,” on page 12). Including the United Kingdom, this region is regarded as the most stable economic unit with which the United States trades. Certainly the European Economic and Monetary Unit will present questions and challenges for Americans doing business in the region.

Russia remains a terrifying question mark. In the near-term future, Eastern Europe will have negative growth. Companies with dealings in the region will face similar problems to those in Asia—but on a smaller scale.

Latin America
Latin America is crucial to the United States because American businesses have significant exposure in the region. Brazil has initiated more than $10 billion in budget cuts and has interest rates at 30 percent (according to Business Week). If Brazil avoids devaluation, then expect it to face a mild recession with a decline in growth of 1 percent to 2 percent. The rest of Latin America will avoid a recession, but growth will be a slow 1 percent to 2 percent increase.

Currently, fundamentals in Mexico (because of economic reforms after the 1994 peso devaluation) and Argentina are healthy. However, if the Brazilian real cracks, there will be pressure placed on other Latin nations, particularly Argentina. In this case, analysts expect a significant recession in Brazil that may reach from Tierra del Fuego past the Rio Grande, and possibly into the United States. One interesting phenomenon to watch: the Mercosur—an economic alliance between Uruguay, Paraguay, Argentina and Brazil—may encourage greater cooperation and stability, especially between Brazil and Argentina.

North America
Be prepared for further profit squeezes. Held estimates that earnings for the Standard & Poors 500 will average zero in 1998, 1999 and 2000. This compares to 10 percent in 1996 and 1997, and with 20 percent in 1993, 1994 and 1995. Most analysts expect the economy to pick up strength by the end of 1999.

Global Workforce, January 1999, Vol. 4, No. 1, p. 8.

It was July 1997 when the first seismic shift occurred. At the epicenter Thailand devalued its currency, creating surface ruptures throughout the economies of Southeast Asia. The ground began to quake all around—Indonesia, Malaysia, Hong Kong. Next, teetering financial towers in Japan began to topple, generating a tsunami that would eventually drench the United States. Suddenly, Americans who didn’t know a rupiah from a rupee were awakening to international financial news as the lead story of the day.

Even before the dust cleared in August 1998, Russia responded to mounting pressures by defaulting on its debts, sending shock waves through global capital markets and fissures up Wall Street. More psychologically damaging than fiscally harmful to most U.S. industries, the event nonetheless terrified all who watched. What would happen next? How far would it spread?

As the Asian turmoil spread to Eastern Europe and ricocheted to Latin America, it was bound to jostle the United States as well. Reeling from multiple jolts, the U.S. stock market plummeted. And although it recovered, aftershocks of the crisis were apparent. At press time, corporate earnings are volatile, exports are down, job creation has slowed and organizations are searching for the best ways to respond. Moreover, the financial tremors have created a credit crunch in the United States, so companies are facing greater difficulty obtaining money to finance expansion and new purchases. Economists see this as the greatest threat. It might create a more widespread slowdown and eventual recession.

Every industry is affected differently. You have the task of assessing multiple scenarios and evaluating each one’s impact on your organization. You must create workforce strategies that are flexible enough to handle contingencies brewing in vastly different countries that will affect all aspects of the business: corporate culture, staffing, retention and compensation.

Trace the rumbles to the United States.
According to Merrill Lynch senior economist Gerald D. Cohen, U.S. job growth slowed from an average of 282,000 new jobs per month in 1997 to 218,000 in 1998. October 1998 had 116,000. “We expect the U.S. economy to slow to about 1.5 percent and the unemployment rate to rise to a little over 5 percent,” he says. “The unemployment rise will come from less hiring, not necessarily more firing.” Furthermore, as corporate earnings slow, companies are less apt to raise wages. (This depends on the industry because a labor shortage still exists in many fields.)

“When you look at what’s happening around the U.S. economy, you find very different responses from companies and even different responses from divisions within the same large company. It depends on what they do, where they sell and what they use in their production,” says Martin Regalia, chief economist for the U.S. Chamber of Commerce. “The impact is very… uneven.”

For example, when foreign currencies fall, U.S. goods become more expensive and consumers overseas purchase fewer of them. The manufacturing sector slows, producing shift cancellations, overtime reduction and actual job layoffs at some workplaces. With approximately 30 percent of U.S. manufacturing happening overseas, when Asian and Latin American purchasers don’t have money to buy U.S. goods, the effect is noticeable. Companies such as Goodyear Tire & Rubber Co., RJR (in Russia) and Royal Dutch Shell Oil announced falling demand. The Gillette Co. and Coca Cola Co. continued to gain market share, but because of currency weakness around the world, their actual dollar revenues have dropped over the short-term.

Likewise, many of the financial-services organizations with heavy investments in Asia and Russia experienced huge losses. However, U.S. domestic banks without overseas operations are strong. The same goes for companies that import raw materials from Southeast Asia to sell in the United States, Western Europe, Canada or Mexico—where there’s no recession. In fact, they’re actually prospering from the Asian downturn.

“The global economy cannot be viewed as monolithic,” says David de Wetter, a consultant with New York City-based Towers Perrin. Not only are industries and regions affected differently, but companies also approach their global investments from different perspectives. For example, some organizations view globalization as a way to implement cost-effective methods of producing goods and services. Others seize opportunities for long-term growth, recognizing the local market as a growing consumer base. Still, others see the need for geographic diversification. Each perspective dictates a different HR strategy.

Understand structural flexibility.
Just as new earthquake construction allows buildings to sway with the force so they don’t crumble, the global marketplace dictates the need for new flexible HR approaches. Knee-jerk reactions won’t work. You can’t simply respond by pulling expatriates home or firing local workers to cut down salary rolls. And what happens when the turnaround comes? Can you simply hunker down and wait for the whole thing to pass? Some companies are.

Others are seizing opportunities. Think what it would be like to create an organization with systems that respond to the uncertainty globalization brings—a structure that can shift from sales and marketing efforts to production when a region’s currency falls, avoiding some of the casualties of falling revenue. “The whole notion of structural flexibility is crucial,” says de Wetter.

Structural flexibility gives an organization the strength to absorb shocks and to ride out crises, while behaving in a nimble, responsive way to new possibilities. It requires a paradigm shift. For example, in many firms, it makes sense to change from a country-by-country management structure to a more integrated, product-focused or customer-focused organization. This eliminates duplication in management and administration, and it allows the company to respond with a big-picture perspective.

The Gillette Co., based in Boston, recognizes the need to transcend national borders. Gillette was hit by devaluing currencies, but its structural changes were already in development before the crisis. International since 1905, the company has been working to reorganize its global business into four entities. Originally arranged by country with separate units for all its product lines—Gillette razors and toiletries, Duracell batteries, Oral-B dental care, and Braun appliances—Gillette is consolidating the products into geographic regions, creating a single sales force for each market that will sell all the products in that region.

Gillette planned the reorganization as a step toward becoming truly global. Each geographic region will organize activities so it can be most responsive to local needs, says Michael C. Hawley, president and chief operating officer. For example, while the Asian markets suffered because revenues fell due to currency difficulties, the Russian market also faltered because the distributors couldn’t get the product to market. While these two problems differ considerably, an overall structure that eliminates redundant efforts when possible and consolidates its workforce can respond in a more sure-footed way to events like these.

Looking at Gillette as an example, you can begin to examine your own organization with an eye on flexibility, strength and responsiveness. Understanding your organization’s competitive issues as well as your industry and the regions in which it’s operating is the first giant step. “If you look at it from a globalization perspective, organizations that are structured on a global or product group basis have a better chance of reacting to a crisis,” says Tom Tilghman, senior consultant at Towers Perrin. “Instead of simply focusing on Asia, for example, you can consider [the situation] within the context of the world at large. Recognize that there are certain commonalities among markets that transcend geographic borders. When you do this, you can simply identify a problem in one area and find an opportunity in another.”

For example, one pharmaceutical company was producung and selling products in Mexico before the devaluation of the peso. When Mexico devalued its currency, the first thought was the division would be bankrupt. Because the managers viewed the situation from an opportunistic vantage point, however, they realized the cost of producing goods in Mexico would now be significantly lower. They turned their operations from producing and distributing strictly to the local economy into producing and distributing to the global economy. Rather than be decimated by the shifting activity underfoot, they were able to forge a success.

Similarly, some global companies are looking at opportunities everywhere—even in markets that have been stable and mature for some time. For example, one company had been doing business in Spain for a dozen years. To overcome some of the competitive challenges in other regions, they introduced new products and services in Spain and are now sending some of their people out of the troubled areas into España.

“As part of this new structural flexibility, organizations are trying to become more nimble and are looking to resource people and locate people wherever there is opportunity,” says de Wetter. Develop systems that enable you to examine the situation globally. Consider the skills you need in different regions. Evaluate where can you use cross-border teams, and think about whether technology can aid your structural flexibility.

Build a global corporate culture.
Corporate culture is the bedrock that absorbs some of the impact of quakes that may devastate neighboring structures. Companies that focus on long-term stability and growth are working to fortify global awareness in the organization’s culture.

Lisle, Illinois-based Molex, an electronic manufacturing company, is a good example. The company makes a hefty 10 percent after-tax profit. Located in the Americas (40 percent of its profit comes from this region), Japan, Korea, South Asia and Europe, the company is well situated to withstand economic shock waves. This year, the Americas and European regions did extremely well and the Asian countries had to struggle. In the recent past, Asia was responsible for a monumental portion of the income. What did the company do?

As part of its annual worldwide communications meeting for all employees, the chairman spoke with workers in Southeast Asia to celebrate the advantages of being global. He explained that even though their region was down, the company still made enough money to give salary increases, avoid layoffs and make improvements all over the world.

“We made the point that for many years, [Asia] contributed the lion’s share, and that now it’s Europe and America’s turn,” says Malou Roth, vice president of human resources training and development. “We refurbished the cafeteria in Malaysia and air conditioned the warehouses. We continued to expand and invest in factories and equipment in Asia for new products.”

These speeches delivered a double dose of global wisdom. They acknowledged previous efforts by employees in the region, tying their work to the overall success of the company. They also pointed out in concrete detail the tangible results of a company that’s globally diversified. These results were intentional.

“We really wanted people to understand that we are all connected. The idea that the French are making more money than they had expected directly helps you keep your job.”

The message was especially meaningful this year because the problems have been so terrible in the Asian region. Sometimes a country will have a bad year because a big customer moves, for example. But everyone knows that these current problems are widespread and major. “They all knew about it. They all read about it. They all were feeling it,” she says. “The fact that they were able to still feel that the company is growing as a result of profit made by other parts of Molex is an extremely powerful message.”

Like stocking canned goods for an unpredictable earthquake, organizations should make contingency plans for surviving and growing through a financial crisis such as the current one. Depending on the areas of the world in which your company does business, look at outcomes down the road and determine which scenarios yield the best results. Build a structure that can withstand future shocks without crumbling.

Global Workforce, January 1999, Vol. 4, No. 1, pp. 6-10.

We’re in a precarious environment here. Providing quality health care benefits while maintaining a rein on health care costs has proven to be as delicate as heart surgery. And it will take the unwavering patience and skill of a physician to provide good, affordable care in the altered setting of the coming decade.

Scalpel in hand, the managed care industry has cut costs with amazing dispatch, allowing employers to enjoy a flatline of expenditures for several years. Although the savings has sometimes slashed muscle as well as diseased tissue, for many benefits providers, it was like taking a deep breath after years of double-digit inflation in health care services. Indeed, there was only five percent average annual growth from 1993 to 1996.

But that era may be coming to an end.

The Health Care Financing Administration in the U.S. Department of Health and Human Services projects health care costs will double by the year 2007 — from $1 trillion in 1996 to $2.1 trillion.

“The managed care industry, in economic terms, really is at a crisis point,” says Tom Beauregard, principal at Hewitt Associates LLC, based in Lincolnshire, Illinois. “We are seeing a definite up-tick — as high as 10 percent depending on the delivery system — and there’s a lot of evidence that these increases will continue for the next several years. 1999 is a wake-up call for employers who are realizing that managed care strategies will require some refinement.”

As evidence, Hewitt points to the following changes in premium costs from 1997 to 1998: HMOs increased 1.8 percent, indemnity programs increased 9 percent, POSs increased 1.5 percent and PPOs increased 4.1 percent. Projections for 1999 (based on current negotiations): HMOs at more than 8 percent, indemnity programs at more than 10 percent, POSs at more than 8 percent and PPOs at more than 9 percent.

The 1997 annual progress report by New York City-based William M. Mercer, Inc. (entitled “Mercer/Foster Higgins National Survey of Employer-sponsored Health Plans”) suggests that most organizations are budgeting an average of 7 percent increase, and other studies put it even higher.

Managed care has backfired with high costs and poor quality.
There are several reasons for these increases. Currently, managed care represents about 85 percent of American employees who are covered by health benefits. Almost 50 percent are fully insured through an HMO or employee-insured arrangement. Most people agree that managed care revolutionized the health care delivery system in the United States, making it more efficient by slicing away duplication of services, erecting price ceilings and discouraging unnecessary procedures.

The dollar savings for Corporate America from this revolution finally have been achieved. While managed care reduced waste and duplication of services, its zealousness in cost-cutting has its own negative effects. In order to have a 50 percent market share, many HMOs practiced competitive measures to sign up employers and their employees. Consequently, many lost money in an effort to compete. Now, they must recover those losses, as well as anticipate higher medical costs in general.

Furthermore, there will be increases in costs for prescription drugs — rising as much as 10 percent each year. More patients are taking prescriptions as a way to cut hospital and doctor visits, and more, expensive new drugs are being introduced daily to aging boomers. Most patients in HMOs do not pay for drugs.

In addition, managed care will have to respond to more federal and state regulations as a direct result of media and consumer groups who have remained dogged in their pursuit of treatment quality and patient care.

Horror stories from patients and doctors regarding poor treatment and lack of access to treatment may be overemphasized by the media, but exist nonetheless, and consumers are adamant in their desire for greater quality and greater choice. As the Mercer study points out, the greatest growth over the past five years has been in PPO and POS plans, not HMOs, and the nature of these plans means they’re not as likely to strictly control costs.

“The shocker is that the last two or three years had very small increases. Everyone is concerned about what this is about,” says Blaine Bos, principal with William M. Mercer, Inc. “Is this a one-year phenomenon or are we now looking at another trend?”

And that’s what has people concerned. “We moved head-fast in terms of both our employees and our purchasing strategies toward managed care because we believed it was a long-term solution, and not a silver bullet. If it’s just another silver bullet, where do we find the next silver bullet? It wouldn’t be a good long-term strategy. Or do we need to be looking elsewhere for a long-term health care-management strategy?”

Treat concerns by questioning strategy and priorities.
The fear about health care cost inflation should compel us to examine our company’s health care strategy — to include cost, quality of care, access and customer service. HR is in a perfect position to look at this patient and do a thorough examination about the company’s health care management benefits. Employers are interested in providing an important benefit to employees on a tax-deductible basis when costs are manageable. HR can actually affect change.

Explains Bos: “Health plan providers are reactive to the purchasers’ demands. In other words, as purchasers rethink their strategies, health plans will react in order to survive, or they will cease to exist. Already, the effective plans are truly managing care.”

Thus, this crisis point may require intensive care from HR if quality and access — as well as cost — are important. Look at the available data. Employers are able to clearly differentiate between plans. Specifically, there’s clinical-quality data, administrative-effectiveness information, employee-satisfaction rankings. In addition to industry and government sources, Hewitt’s Health Value Initiative is a collection of very specific financial information from 300 employers.

With those basic sets of information, HR can step back and ask, how should we be contracting? What are our priorities? Is the company a low-margin business? If so, the focus may be trained on the financial element. If the company is attempting to retain employees in a high-turnover environment, other issues would be most important. Those are employers who might want to focus more on employee satisfaction than on financial efficiency.

“If you can come to a priority stage and derive how you want to be contracting to the managed-care plan, and make that link to your broader business strategy, then you can identify the plan that best feeds your organization’s needs,” says Beauregard. “The bottom line of the financial data on these plans is to give the employer a great way to differentiate. For a lot of employers, this is the first time they’re going through a specific priority process.”

This era of disequilibrium may prove to aid long-term health. As HR practitioners who have tremendous influence, if not complete control, over these decisions, the benefits and positive prognosis can be enormous. Managing costs has become a possibility over the past several years. Now, the challenge, doctor, is to manage these costs while maintaining care.

Workforce, Workforce, December 1998, Vol. 77, No. 12, pp.127-128.

Admit it. If you think about it, global teams are probably one of the toughest games around, with little chance to succeed. And if you’re really honest about it, you’d confess that it’s astounding when intercultural teams have any success at all. Luckily, they do. And the credit, in no small measure, goes to the managers — both HR and line — who realize what a complex task awaits the global team. They improve the odds by providing tools to help team members make their groups work.

Global teams come in various configurations. Generally, they fall into one of two categories: intercultural teams, in which people from different cultures meet face-to-face to work on a project, and virtual global teams, in which individuals remain in their separate locations around the world and conduct meetings via different forms of technology. Obviously, both kinds are fraught with enormous challenges.

Given the communications and cultural obstacles, what do companies gain from these units? Teams help global companies, preventing them from needing to reinvent the game with each new project. They enable organizations to realize 24-hour productivity via the latest in technology. They allow cross-pollenation between cultures as well as business units, adding depth of knowledge and experience to the endeavor.

But effective global teams are not simple to create or maintain. With myriad challenges — from time and space logistics, to cultural assumptions that no one articulates because each individual believes them to be so universal — teams must continually overcome considerable obstacles. While you may be eager to capitalize on the expertise of individuals from around the world, and even have the technology to do so, it’s important to remember that global teams must master the basics, understand the rules, learn to harness both cultural and functional group diversity and become adroit at communication and leadership.

Mastering the basics and understanding the rules.
“Everybody wants to know what’s happening at the edge and the next wave of things to come, but we still find people who don’t do the basics very well,” says Mary O’Hara-Devereaux, co-author with Robert Johansen of Global Work: Bridging Distance, Culture and Time (Jossey-Bass Inc., 1994). “People need some understanding of what a team is — the variations of the team’s work and the variety of cultures that are on it, ways to communicate effectively, and how to work with distributed leadership so that everyone on the team has leadership roles.”

Covering the basics means ensuring everyone associated with the venture appreciates the difficulties involved with participating in a global team. There should be solid business reasons for forming one. And it’s important that team members and associated managers understand the following considerations:

• The team champion should have the mandate to choose the people with the right skills for the job.
• The team should have measurable goals that participants have had the opportunity to discuss and agree with.
• Meetings must have clearly established objectives and predetermined agendas.
• Team members must make time to discuss the lines of communication. What methods will members use to communicate? Does everyone have equal access to the communication?
• Participants should recognize the role of language difficulties and manner of speaking in cross-border teams. For example, individuals from various English-speaking countries will speak in different dialects that may be troublesome for some members. Allow time for group members to acclimate to each other.
• Members must realize that people need to understand each other’s differences before they can effectively come together as a group. Teambuilding sessions and cross-cultural training can help with this.

Of course there’s a lot more to creating a team than a simple list of do’s and don’ts. Clear expectations, defined responsibilities and an appreciation of cultural differences are among the basics to be accomplished by each team at the outset. Every member must know and comprehend the business objectives, understand the timetables and agree to follow a set of team rules. These are basic elements to success, but they require time and careful consideration if the team is going to consent and abide by them.

Fairfax, Virginia-based Mobil Corp. knows this lesson first-hand. About 10 years ago, Mobil undertook a companywide study and determined that it had to change significantly if it was going to be able to remain a profitable oil company in a volatile marketplace. Its assessment initiated global teams. The company realized that these work groups maximize an individual’s knowledge by sharing it throughout the company with others via natural work teams, as well as transferring best practices within the company. In other words, the best practices from one group would be carried to another via team members.

With more than 43,000 employees — only 16,500 of whom are in the United States — and with operations in more than 140 countries, most natural work teams have representation from all over the world, such as the SpeedPass(TM) program initiated by Mobil in the United States.

Working with Texas Instruments, Mobil developed electronic transaction payment systems for service stations. These are like bank debit cards that are customer-activated at pay-at-the-pump terminals. Mobil first tested SpeedPass(TM) in the States with excellent results. The next step was to form a global team to lob that learning from one country to another.

“A project champion, who was the individual who had implemented SpeedPass(TM) in the U.S., was in charge of creating the team with others from the Fuels Advisory Council who nominated individuals to participate,” recalls Bill Cummings, who represented Japan on the team and is currently Mobil’s media relations advisor at the U.S. headquarters. Desiring cross-pollenation, Mobil charged the individual who had successfully implemented Speedpass(TM) in the U.S. with the project leadership. Not only did this individual choose the team representatives, but he communicated to them that their global expertise was critical to the success of the project. He encouraged them to express their different viewpoints.

For example, it was clear that it had taken 20 years for Americans to move from full-serve to mini-serve to self-serve to pay-at-the-pump. Countries like Japan were still accustomed to full-service. Other countries were at different points along the same journey. Only people who had first-hand knowledge of the cultures of countries such as Japan, Australia and Singapore could help take this U.S. best practice and transplant it successfully overseas.

“The concept of taking lessons learned and applying them across as many different countries, cultures and experiences as possible is a fundamental part of Mobil’s corporate culture,” says Cummings. “Clearly, individuals from the different regions would bring their cultural know-how and business perspectives to the team effort. It was their job to evaluate whether or not it was possible to transplant the lessons learned into other cultures.”

Harnessing group diversity.
Even though almost all of the dozen individuals in the group already had been on other global teams, they first gathered face-to-face in Los Angeles. Mobil generally has its team members huddle in one location at the launch of a new effort so they can begin to build relationships with each other and clearly understand the team’s business mission.

This initial meeting was also the occasion in which team members began to understand their roles, confirmed their commitments and decided the rules by which the team would operate. This particular team consisted of marketing and line managers, technology specialists, information technology experts and retail specialists. There were individuals from Texas Instruments present, as well, creating a global virtual team across two companies.

Mobil gave the team members ample time (five days) to get acquainted with the product so they could understand it thoroughly and begin to contribute their ideas for marketing it in their respective regions. This face-time together is when the team leader typically solidifies the group and guides it toward working jointly. Again, several points should be established clearly at this stage: specific team objectives, how to accomplish them, who is responsible for what and when, and general project timetables.

Cross-cultural training is a basic prerequisite for these meetings. Says O’Hara-Devereaux, “I think we haven’t done it very well, so we like to pretend that we are through with it now, and everybody did it.” She continues, “I do think, however, people have grown acclimated and accustomed to working with people who are different than they are. They go into teams expecting things to be a little bumpier. But they’ve done it enough times now that there is a whole set of new expectations and experience and awareness that people bring different elements to the team. They’re comfortable with the relationships that are formed.”

Communicating across the field.
Once the basics are addressed and cultural differences acknowledged, communication takes center field. But communication is achieved through experience, not necessarily through rigid training. “We saw that the workforce was becoming global, so we decided to teach people how to use technology and be sensitive in global teams,” says Santa Clara, California-based 3Com’s Debra Engel, currently executive advisor, and for the past 15 years senior vice president of corporate services. That personal experience accelerates the learning immensely. Says Engel, “It’s amazing how quickly it has switched from a world in which you so rarely had contact with others outside your own work to one where the customer base and marketplace segmentation is disappearing and groups need to communicate all the time.”

3Com distinguishes itself through its use of technology. The company, a networking giant, naturally attracts people who want to push the edge of technology as part of their work. Interestingly, though you might expect 3Com to use whiz-bang high-tech gymnastics in its teamwork, the organization has created a different mentality in the way people operate. With 5,000 employees in its offices in London, Dublin, Tel Aviv, San Diego and Boston, it pursues the ultimate in the virtual office. 3Com’s work with global teams concentrates on obtaining peak performance from solid use of the traditionals: voice, e-mail and teleconferencing.

In fact, phone conferencing handles a huge percentage of the real time interaction. If there is a need for visuals in teleconferences, the team members receive e-mailed documentation. They’ll look at the document on their individual computers while participating in the teleconference. This offers better resolution and clarity than video, and people also have the opportunity to make changes in the document right there on the screen.

Indeed, while the company is so technologically progressive that all 3Com employees have the ability to watch the chairman’s address via live video at their desks, it also knows how to use technology effectively, rather than randomly. It has actually moved away somewhat from videoconferencing. “It wasn’t as productive as telephones when you take into account the time to get to the video-conference facility,” says Engel. “We also found that some of the video is actually distracting — the delay and extraneous visual effects detracted from the information.”

3Com’s global team members (about 80 percent of whom are senior managers) have also become more experienced and efficient with teleconferencing. They have learned the behaviors that make teleconferencing more productive: speaking louder and more clearly, having extensions of the phone speakers, being adept at describing the materials they’re discussing, and making sure they ask for people’s opinions — whether they’re physically present or not.

“People get better and better at teleconferencing and they develop new habits,” says Engel. Even when a large percentage of the team is present at the meeting location and others are teleconferencing in, speakers will not project their visuals. Instead, they hand them out, making it easier for them to remember what to describe since some of their audience isn’t in the room. “If you’re projecting the visuals, you tend to take verbal shortcuts. But if you don’t have them projected, you describe them to the people in the room the same way as the people on the phone,” she explains.

Most team members simply call one of the conferencing systems and enter the meeting via a telephone from an office, home or a cellular phone anywhere in the world. These are not mere squawk-boxes that distort sound and cause callers to scream every time they can’t hear. Sophisticated teleconferencing technology allows several callers to join the conversation in a very natural way, and even listen to prior minutes of the meeting so they can hear what they’ve missed. 3Com uses a system called Meeting Place, with which the caller uses a series of codes. One code allows access to minutes of the meeting, and another allows immediate entry to the meeting.

Because people are distributed globally, one of the biggest challenges is the timing of the meetings. If you have people in the United States and Europe, you just choose an early morning Pacific time; if you have conferences that include Europe, the Americas and Asia, you should rotate the time so that the same group isn’t inconvenienced on every occasion.

Cultivating distributed leadership.
With the fundamentals considered, and communication tackled, the teams must next grapple with leadership issues. This is especially important because work in the late 1990s has become more fragmented. Global teams can be severely penalized if leadership isn’t adequate.

And it’s important that there isn’t just one leader. Instead, each team member should have a shared leadership role. One major barrier to global teams is that most people have multiple job responsibilities. Since they have several roles throughout the organization, it’s difficult for everyone to respond in a timely, effective manner. You can imagine this becomes exacerbated when one supervisor is in the States and another is the team leader 10,000 miles away. Individuals will frequently report that their managers require them to perform tasks that interfere with their global teamwork. “People have more roles than they used to,” says O’Hara-Devereaux. “Creating a sense of leadership for everyone so it’s their job to manage other competing demands is important. It needs to be pushed deeper down into the organization.”

Some people may be on four, five or six teams, so they must have a sense of ownership of the processes. This establishes not only division of leadership, but rotation of the overall leadership role, as well. Different people take responsibility for convening and running remote meetings, and measuring progress.

Consequently, global leadership training is another skill that must be developed. People should be selected for team participation with leadership in mind, and they must also be trained, supported and monitored.

In the beginning of the team building, however, there typically is a more traditional team leader who helps define the leadership role, as well as the goals and responsibilities for each person on the team. This individual must ensure everyone has explicit enough information so they can clearly visualize what they’ll be doing and where they’ll be going.

Finally, people need to provide solutions to the team. They can’t be shy about offering their ideas. In many business situations, groups come together to work out solutions from the bottom upward. But most global teams don’t have that luxury. Part of the leadership function is to be responsible for coming up with solutions that fit into the overall context of the team’s goals.

Challenged from all fronts, successful global teams need guidance to overcome the substantial barriers they encounter. When you think about the tasks your global teams must accomplish — and you consider the language obstacles, the cultural barriers, the business challenges — it becomes apparent that your role as global HR manager is equally complex. You can help your organization’s cross-border teams enormously by offering cultural preparation and training on successful teamwork, and by providing ongoing assistance with the maintenance of the team.

Global Workforce, November 1998, Vol. 3, No. 6, pp. 12-17.

How to help people get past a sexual harassment investigation.

1. Create a workplace in which everyone knows acceptable behavior.

2. Provide training and workshops where people can speak to each other about these issues, before problems occur.

3. Review your sexual harassment policy to be sure it’s clear. Does it spell out zero tolerance for retaliation? Does it clearly state what happens in the event of a false claim?

4. Plan a strategy for healing. Decide if you would allow both client and defendant to continue working or not during an investigation.

5. Consider offering both informal and formal avenues of complaint.

6. Write down procedures so they’re uniform, and be sure everyone knows where they can find them so they can read them.

7. Create a position of ombudsman.

8. Consider what “comforts” you might offer to harassees that would be helpful, and at the same time, show that the company is really concerned about them. This might be payment of legal fees or it might be generous counseling benefits.

9. Locate a good organization or individual who can mediate and communicate to both parties.

10. Offer workshops after an event occurs—for everyone remotely connected.

Workforce, October 1998, Vol. 77, No. 10, p. 54

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Don’t discount outsourcing as Vendor Management 101. The outsourcing industry in North America heftily rings up around $141 billion a year, according to the Economic Intelligence Unit in London. And HR activities comprise a big chunk of that outsourcing bill—as high as 12 percent of total outsourcing business in North America, according to a 1997 study by Murray Hill, New Jersey-based Dunn &Bradstreet Corp. and New York City-based The Outsourcing Institute.

Given the importance of such functions as the administration of 401(k)s and pension plans, benefits, relocation and expatriate management, the investment should be considered as a priority. With each transaction, the “cha-chings” of the cash register are recording far more than nickels and dimes.

Yet how many HR managers are mentored or trained to work with outside service providers? Far too few of them to make sense. How often have you wondered if you’re really maximizing the time, effort and expense that you and your organization devote to outside services? Learning these skills may be simple and straightforward, but it’s no small change.

Identify your needs.
“Using outside providers is a necessity in today’s environment, in which cost effectiveness and service quality is paramount,” says Lynn Tamburo, a global relocation and compensation consultant who was formerly at New York City-based JP Morgan, in charge of the organization’s entire expatriate program. “It requires you to look for centers of excellence in the services you need to provide. You have to decide what capabilities you have internally and which ones you’re going to obtain from the outside.”

If you’re going to look for an external source to obtain some of the abilities you need, it’s important that you identify upfront what your needs are, what your selection criteria is, and what you’re looking for in a service provider. And cost isn’t the most important consideration. In fact, when you think of the reasons that you’re outsourcing services to begin with, cost is only one consideration among many.

Take a step back and think about why you’re outsourcing the functions. Think about the strategy of your actions. Is it because the area is outside your core competency? Is it because you want to reduce the need for specific in-house expertise, either as a cost-savings measure or because you can’t locate the talent? Is it because you believe outside providers can offer better service, as well as save money?

Match your needs to provider capabilities.
Once you make a list of your needs, move on to the selection criteria—find what’s important to you. This is the time to benchmark against other comparable companies with similar situations. The most effective way to approach this is networking with colleagues. Talk with them about what types of services they receive, whom they receive them from, and what the advantages and disadvantages are.

Next, identify the potential providers and solicit proposals from them. This could be a formal process by which you solicit proposals from several providers and put them through an evaluation process, critiquing them against the information you gathered from your initial examination of your needs.

Surprising as it may seem, some managers feel pressured to accept the conditions of the providers, allowing the vendor’s capabilities to dictate. Your organization’s needs should be paramount in the discussion; foremost is how well the provider can satisfy your needs.

“Personally, I would weigh the objective criteria (cost, services provided or referrals) more heavily than the subjective. But by the same token, I would not ignore the subjective. You need to ensure there’s good chemistry between you and your outsource provider when making a decision,” says Tamburo.

In other words, think of this relationship as a partnership. Have face-to-face meetings with the potential partner to determine if your goals and ways of doing business are compatible.

Manage the relationship with open communication.
Once you’ve honed in on who you think is the best provider, you’ve interviewed for personal fit and negotiated the best deal, then write a service agreement. Specify service levels and costs. What do you expect? What are the timetables? Outline the methods you’ll use to measure effectiveness. Document all of this before you begin to work together.

To manage the relationship, think of it as an alliance that allows you to provide to your clients. It reflects on you, so your clients are the ones who should give you feedback about the service, not the provider. Do this formally or informally, by survey or ongoing discussions.

For example, let’s say you’re looking for feedback on a moving company. After the move takes place, you’re able to call or send a questionnaire to your client and ask for various feedback on aspects of the move. Or you might want to talk to everyone who used that service to get all the information at once. But, particularly with a new service provider, getting immediate and ongoing feedback is preferable. Recognize that it’s particularly noteworthy when feedback comes to you unsolicited—good or bad.

It’s also essential to frequently communicate with your provider. Talk about what it’s doing for you and how it’s doing it. The frequency obviously depends upon the service being provided; if it’s a tax provider, the service tends to be once a year, while in other cases, it’s ongoing.

Continue to be specific about your expectations in terms of what you need and when you need it. Reinforce those messages until your expectations are being met. Ask about other ways in which the provider may be of service to you. Be open and candid about your needs.

Maintain the relationship by evaluating it.
Finally, conduct periodic service-level reviews. Consider annual reviews, which could be based on your evaluation methods and the anecdotal feedback you’ve received. Discuss what’s working and not working, and if improvements are necessary. You’ll also want to conduct internal reviews to find out how your clients think the outsourcing is working.

Repeat the competitive bidding process every so often, on two- to five-year intervals, depending on your confidence with the service provider, the results of your external benchmarking, and how stable your needs are. During this time, benchmark against your colleagues, and always question if the situation continues to work for you.

Outsourcing is more prominent than it used to be, and it’s much more important because the sophistication of the HR capability has increased. In the past, HR facilitated administration as it related to people. Now, the function is more strategic, and needs outside support. HR managers are working with business managers to help fulfill their business goals. Working proactively to identify service needs and how to effectively manage providers is not only important financially, but it can also be critical to the ability to meet business goals.

Workforce, October 1998, Vol. 77, No. 10, pp. 130-132