Author: Charlene Solomon

To the outside observer, even to friends and acquaintances, Carol Leigh looked fine. But she remembers the day problems began: It was during a small luncheon with six other expat wives. As they sat around the table introducing themselves, every woman gave her name, then her husband’s title, then the name of his company. Nothing else.

Help spouses find meaning in their lives, too.
Carol Leigh isn’t unique. Her tale is repeated in various guises by expatriate spouses around the world. She may be a stock broker who’s unable to trade on a foreign exchange, an architect who can’t work because local customs prohibit women from doing so, or a secretary unable to obtain a work permit. And increasingly, she is a he, a male accompanying partner following his expat wife.

No matter what the reason-or the gender-after the scramble to help their families settle-in settles down, spouses confront an emptiness based on their own lack of routine, lack of network and lack of job. They must create a new life, often with a frequently absent partner and regularly without the prospect of employment for themselves. They face isolation, a loss of identity and diminished self-esteem. This isn’t only because they’ve relinquished their career (or at least paid employment), but also because they encounter stress every day in the new environment-stress that makes them question if they can do anything competently anymore.

The dilemma of expatriate spouses, particularly dual-career spouses, is a growing and difficult one for HR managers. It not only rears its head during the selection of candidates (when many turn down assignments because of the spouse’s career), but it also affects the success of the assignment and the ability for spouses and families to successfully repatriate. Consequently, if global managers want to help the Carol Leighs (and the assignments their husbands are on), they’re going to have to design practices to help spouses find meaningful ways to spend their time during international assignments. In some cases, this may mean helping the spouse find employment or navigating through a maze of foreign immigration technicalities; in other cases it means helping him or her contact organizations to find out about volunteer work and educational opportunities; in still others it means simply connecting the spouse with a worthwhile network of peers. No easy task with one-size-fits-all solutions. Nevertheless, global HR managers must face this problem, head-on, and attempt to tackle some of these myriad issues with innovative approaches.

“We began to realize that the entire effectiveness of the assignment could be compromised by ignoring the spouse,” says Steve Ford, manager of corporate relocations for Hewlett-Packard Co. based in Palo Alto, California. “Lots of things have changed in recent years,” he says, “but one of the most significant is the growing percentage of working spouses and a realization that sending a family on a foreign service assignment isn’t that simple. The assignment could be unsuccessful because of issues related to greater stress or unhappiness with the spouse (or other family members). And, from the company’s point of view, a foreign service assignment is very expensive.”

Indeed, statistics support Ford’s claim that the number of dual-career couples is growing. The Bureau of Labor Statistics points out that in 1995, more than 65% of all married couples with children were dual-earner families (up 9% in 10 years). Women comprise 46% of the U.S. labor force. Furthermore, simply talk to global HR managers, and they’ll tell you the spouse’s career is becoming more and more an impediment to overseas relocations. In fact, this is the biggest factor when employees refuse to accept an international assignment. They decline because they can’t afford to lose the income or they worry it may derail the spouse’s career entirely if he or she is out of the workforce for a few years. It’s becoming such an important issue that some organizations are beginning to consider redefining the length of assignments so they’re much shorter (and thus, less disruptive to a spouse’s career), and some are willing to consider international commuter marriages as alternatives. And these issues will become ever-more complex as greater numbers of men are the accompanying partner.

Already, we see this domestically. The Employee Relocation Council stated that in 1992 women constituted up to 15% of corporate moves (an increase from 5% in 1980). The Wall Street Journal estimates approximately 25% of accompanying partners will be males by the year 2000.

Here are some of the obstacles accompanying partners of either gender say they encounter in their quest to find meaningful work, whether that be paid or unpaid:

• Immigration regulations that bar foreigners from working
• Language
• Lack of transferable skills to meaningful available work
• Scarcity of volunteer opportunities
• Cultural barriers that don’t allow women to perform certain jobs-paid or voluntary
• Lack of knowledge about educational opportunities.

As daunting as the challenge may seem, companies and their global HR managers know it’s critical to tackle these issues, and some are making inroads. Companies such as Hewlett-Packard Co. (HP), Shell International B.V., Medtronic Inc. and Monsanto Co. take a two-pronged approach: First, they help the spouse overcome cultural and emotional hurdles as well as the loneliness of a new location by offering cross-cultural counseling and connecting them with a network of spouses in the host community; and secondly, they offer a variety of options to begin to address the dual-career dilemma.

These services don’t have to cost a lot of money. “At the outset, what’s most important is a commitment from the company that it’s willing to provide some support and acknowledgment that expatriate spouses are an important issue,” says Eleanor Haller-Jorden, managing director of Zurich, Switzerland-based Paradigm Group and an authority and frequent lecturer on this topic. An expatriate herself, Haller-Jorden says companies can provide a variety of simple services that address the problem directly. For example, they can consolidate data, creating a clearinghouse of information and resources; they can set up a conference room and phone line for spouses or a small room to serve as a resource library with materials on the local community; they can create a directory of expatriates (especially those who would be willing to speak with newly arrived expatriates). For firms that feel they can get more involved, they can create a job hotline in which project-based jobs are available or they can create a consortium of companies and pool resources in a specific location or within an industry and create a job bank. Moreover, they can always help with acquiring work permits and offering career counseling. Finally, she says, companies could take stock of what they’re currently offering and get feedback from expatriates-what’s useful and what’s not.

Indeed, that’s precisely where Shell International, based both in London and The Hague, began its initiative to support spouses. With more than 5,500 expatriates, Shell possibly has the most expatriates of any company in the world. In 1993, the giant oil and petroleum multinational conducted a survey to discover the details of its expatriate community. The company discovered one of the greatest impediments to employees’ mobility was their partners’ reluctance to move. It also discovered that spouses felt they weren’t being utilized enough and their expertise wasn’t valued.

Quickly, the company moved into action. Once the main operating companies supported the findings and conclusions, it appointed a Spouse Employment consultant who advises spouses and partners on a broad range of employment issues (either directly or by referral to external agencies). For example, a partner may come to Shell’s consultant, Kathleen van der Wilk-Carlton, because he or she has only a vague idea of what’s available in a destination country, or the person may have a very defined career path in mind and speak with her about ways to promote that career. Van der Wilk-Carlton first conducts a thorough assessment that will ultimately lead to career planning. Then she helps to either locate employment, aid in work permit acquisition or-when paid employment is impossible-find appropriate educational and volunteer activities that interest the person and help him or her keep on track. This can be very difficult because many expatriates in Shell go from one international location to another, and thus one area may be conducive to paid employment whereas the next destination may have only a few opportunities.

Apart from the area of employment, Shell also recognized the strong desire on the part of expatriate spouses to have greater recognition and contribution to the company. As a result, it created a network of briefing centers for expatriation around the world. It’s for the entire expatriate family and it’s run by spouses and becoming a spouse information center. The model is in The Hague Center in The Netherlands, which has a paid staff of expatriate spouses as well as volunteers. Each center serves a different community, and thus offers somewhat different activities, but each is generated by the interest of spouses.

Keep support consistent with company culture and values.
Hewlett-Packard’s Ford concurs with Shell’s approach of promoting independence. “My belief is that HP people like to take ownership for their own lives and their own careers. What they want is to have us provide an environment in which they can do that. We try to make people as self-reliant as possible and to allow them to channel their energies in some productive way by giving them ideas and giving them access to counseling, education or whatever,” he says. HP prepares for this predeparture through counseling sessions that explore a variety of opportunities for the spouse.

HP’s awareness of the dual-career problem, however, doesn’t mean the company will do just anything to solve the problem. Solutions must be consistent with its fundamental principles about foreign assignments and its corporate culture. In keeping with that idea, the company doesn’t approve of commuter marriages. “HP has a very strong philosophy about keeping the family together so we actively discourage commuter relationships in [our] international policies,” says Tee Hitchcock, international relocation specialist. “In fact, it could be the basis for nonselection of a candidate,” she says.

The firm also won’t try to replicate the spouse’s income. “It’s not under consideration,” she says. But, she continues, “We understand that asking a family to relocate these days [involves] talking about two-career families, so we try to create policies that reflect that concern.” The following are HP’s policies that affect dual-career spouses:

• One-day session of spouse-specific training that’s either career-related or interest-related (it could be academic or it could be a hobby). Usually the counselor researches beforehand what’s available in the host country and also gives contact names.
• Financial assistance for the spouse by which HP shares the cost of all types of educational activities up to $2,000 annually (this can include host-location career-counseling).
• Assistance with resume preparation and payment for visas when work is a possibility in the destination country.
• Three days of cross-cultural counseling and orientation for the whole family that’s designed to cover local customs (business and social; history) as well as ways to become more quickly accustomed to the local environment.
• Language training.
• If the spouse is an HP employee, there’s often a leave of absence with a guarantee of work upon return.

Obviously, the policies HP developed and implemented demonstrate the value the company places on spouses, whether they’re leaving a paid career or not.

HR can channel spouse contributions toward volunteer work.
Tamara Homburg is a spouse who took the international relocation as an opportunity to create something exceptional. On assignment with her husband for St. Louis-based Monsanto Co., Homburg was always optimistic and enthusiastic about the international opportunity. The chance to move to Brussels, Belgium with Monsanto came when Homburg, a practicing lawyer, was pregnant with her and her husband’s second child and she was eager to take a break in her career. During the first year in Brussels, she taught business law classes. Nevertheless, Homburg (who had been on assignment once before) felt antsy to do more involved and challenging work.

Luck intervened. When Marena Rahusen, the HR manager in Brussels who’s responsible for expatriate policies, initiated the idea of a Spousal Sponsor Network and asked for assistance, Homburg’s hand shot up as the volunteer to lead the effort. At first, it began as a regular gathering for coffee and sharing of relocation horror stories-things such as learning to use gasoline station pumps, marketing in less than three hours, and other relatively minor situations you laugh at afterward that are “… huge events in… your life that can move very competent people to tears… ” These were the basis for lively, continuing discussions.

Soon after, the group decided to formalize the network as a way to be sure newcomers could learn from their experiences. Monsanto provides a place to meet, facilities for group gatherings, postage and copying services. Well-known for its responsive international relocation policies, the company not only attempts to sustain the spouse, but actually recognizes his or her contribution to the company. “We value spouses. In fact, we let them know it’s not just employees’ knowledge we value, it’s theirs as well,” says Carol Jones, global development director for Monsanto. As an example of this belief, Rahusen helped the group begin and maintained a sense of sponsorship and offered resources. But the company wants spouses to assume ownership of the organization. It also pushes for the group to be autonomous to assure it avoids the possibility of spouses being involved in company politics.

Today, the Spousal Sponsor Network has created a databank of families who have lived in Brussels at least a year. These people (both expatriate and local families) must meet specific criteria similar to the core competencies the company identifies for successful, adaptive expats. Before new expats come on the network’s house-hunting trip, they receive a package from the Brussels office with a letter from the network describing the program and asking if they’d like to participate.

The family provides a profile (who the kids are, whether they’ve had previous global assignments, what their interests are) and then they’re matched with one of the sponsor families. During the family’s house-hunting trip, the sponsor makes contact and invites the newcomers over to their home for dinner during the weekend to become acquainted.

The sponsors actually undergo a competency development workshop so they’re able to be helpful to the newcomers, understand the stress they’re undergoing, and respect confidentiality. Sponsors are proactive. After an initial needs assessment, sponsors are encouraged to keep in touch with the people and make certain they’re doing well. “The whole purpose of the sponsor program was to get people integrated as quickly as possible so they had a network or support group to go to,” says Homburg.

Provide financial support and creative employment assistance.
Monsanto utilizes financial resources to help spouses identify their transferable skills and assists them with finding opportunities in the host country. The company has a clear dual-career policy with three tiers. One is for predeparture: a one-time dislocation payment that’s 33% of the last six months of gross taxable earned income. Another tier applies during the assignment: a payment of up to $5,000 of pre-approved expenses for higher education that’s career-related (job search assistance, immigration help, travel to the country-of-origin for professional meetings, payment for professional certification fees and professional magazine subscriptions). The third tier is for repatriation: a $1,000 allowance for re-entry job-search assistance, resume preparation, interviewing techniques and skills analysis. These policies apply to people who work full time or part time. They can be self-employed or employed by a company.

Another company that offers financial assistance is Minneapolis-based Medtronic Inc., makers of heart pacemakers and other cardiac-related devices. The firm generates 44% of its revenue from overseas.

Possibly the most innovative way the company recognizes the needs of all the family members of its 25- to 30-member expat group is its Flexible Reimbursement Account. It’s a matching account in which the family can spend up to $6,000 per year on personal development and the company will reimburse 50% of that. The policy statement offers examples: Dual-career spouses can use the money for travel expenses to conferences outside the foreign location or for other educational expenses. It also can use the money for any other expense that will make the relocation easier on any family members, such as additional telephone calls home or flying grandparents to see the expatriates. The intent? The company recognizes expatriates have needs in addition to what they would have if they were in the United States. But, clearly, as beneficiaries of money, expats share the expense.

In addition to financial support, Medtronic helps dual-career families by networking with the spouse’s company and trying to arrange innovative opportunities. In the past, the company has worked with the spouse’s employer to find a position in the same country, to alter the timing of the expat’s assignment-speed it up or slow it down-if the spouse’s career was positively affected, and to help with work-related legalities such as acquiring visas and paying union dues. Furthermore, Medtronic has attempted to find ways to help the spouse maintain a long-distance relationship with the employer, such as a long-distance telecommuting relationship.

The following key policy features are ways in which Medtronic tries to impact the spouse’s experience:

• Flexible Reimbursement Account
• Predeparture cultural orientation for expatriate, spouse and children, if appropriate
• Automobile (including special lease rates if a second car is desired for the spouse)
• Language training prior to and during the assignment
• Outsourced settling-in services to assist expats in finding their way to the bank, the grocery store and other activities of day-to-day life
• On-the-ground, in-country follow-ups by a third-party to be sure the expatriate family is doing well.

The company also has defined ways to improve personnel responsiveness. It comprehensively assesses cultural adaptability for the entire family before the assignment to identify any red flags. It establishes closer ties with expatriates throughout the duration of the assignment by talking with them at specific intervals. At the same time, the company creates a network of global managers at other companies to determine what is state-of-the-art assistance. It also continuously measures the effectiveness of current services. For example, it asks families how useful settling-in services, cultural counseling and predeparture training are to them, and what may be missing.

Monsanto, HP and Shell show that although the dual-career dilemma may be a difficult one, it’s not impossible to solve. They’re trying to support spouses in so many ways: Helping them identify transferable skills that will assist their adaptation in the destination; encouraging career development discussions before relocation; telling them about volunteer and educational opportunities that will further their careers; counseling them about such possibilities as taking a leave-of-absence and returning to the job for specified periods of time during the assignment; providing long-term career counseling and development support; providing names of local spouse centers and counseling facilities; and even exploring collaborations with other global firms for job possibilities.

To be sure, it’s not simple. Indeed, it may be one of the most thorny aspects of expatriation. But the needs of the accompanying spouse must be adequately addressed or there may be no assignment at all.

It’s no small potatoes. McDonald’s International, that is. Cooking up its first international revenues in 1967 with restaurants in Canada and Puerto Rico, McDonald’s now serves up a fast-food extravaganza ranging from soup to nuts (or nuggets, in this case) in 18,380 restaurants in 91 countries. Total revenue for 1995 was more than $10 billion, and total sales outside the United States contributed 54% to the firm’s consolidated operating income for the year.

This is an organization that knows how to grow globally. Each day, more than 33 million people around the world are gobbling down McNuggets and Big Macs faster than you can say: “two all-beef patties special sauce lettuce cheese pickles onions on a sesame seed bun.” And they’re served by more than one million employees, with estimates that the number will double by the year 2000.

It’s a company that reveres flexibility and sensitivity to local cultural mores. You may think that translates into flavoring the burgers a little differently from country to country, but the company’s global astuteness is much more far-reaching and profound. For a business, in the minds of Americans, that’s synonymous with all-beef hamburgers, McDonald’s will open its first restaurant in India this year without any beef products at all. Vegiburgers, or burgers made with mutton or lamb, may take their place. And, as an organization that holds distinction for actively promoting diversity in the United States, it has a restaurant in Saudi Arabia with two dining rooms—one for men, the other for women and children. These are lessons in profitable cultural sensitivity.

This cultural sensitivity spills over to the company’s HR practices. “One of our guiding principles is that our restaurants should always be a reflection of the communities they serve—not only the individuals we employ and the culture and ethnicity of those communities, but also the employment practices,” says Rita Johnson, staff director in international human resources with responsibility for Central Europe.

That means not stuffing the American way down their throats, but rather taking the company’s best practices from around the world and working with local staff to blend those into local practices. McDonald’s then comes up with the most effective way of doing things in a particular location.

“While there may be some specific differences worldwide in local labor laws or employment practices, our philosophical approach to employment is the same whether we’re in Beijing or Budapest,” says Robert Wilner, home office director, international human resources.

Adds Johnson: “Our global perspective is that whatever market or country we’re going into, we always employ the most positive people practices and exceed the expectations of our employees.”

McDonald’s vision is just the beginning.
Exceeding expectations is something McDonald’s does well. Try to remember life before drive-thrus and you get a taste of the influence this corporation has had on our lives. It’s not just vision. Good ideas wilt like week-old lettuce if there’s no business acumen to propel them. And, while McDonald’s may convince its customers that they “deserve a break today,” the company is relentless in its pursuit of expansion based on solid business goals. All you have to do is look at the organization’s selection, hiring and training procedures to know instantly that it works very hard to align HR systems with business objectives. And the planning required before entering a new country is anything but fast-food casual.

“When we open in a country [that’s] new to us, we do exploratory visits—sometimes several years in advance of building the first restaurant,” Johnson explains. “We collect information so we can approach it from a fact-based, decision-making standpoint. We need to be sure the market is going to be profitable for us so we take a look at the demographics.” The company asks itself: Would this particular market support a restaurant? What other food-service industries are currently in this country? Would we be the first food-service company or are our competitors currently established in the country? What kind of success are they having?

In addition, the company benchmarks with other companies already in the country to find out what their problems and issues are. What would they do differently, and what are their HR issues? What kind of business infrastructure already has been established?

As those questions are answered, HR rolls up its proverbial sleeves and steps up to the front of the line. It has a new-country outline that contains a list of employment-practice questions that must be answered as part of the fact-gathering stage. What are the labor laws? Would the company be able to establish part-time and flexible work schedules? Are there a specific number of hours employees are allowed to work? Can the company employ youth under the age of 18? What other services must the company provide?

In many countries in Central Europe, for example, employers must provide showers and lockers. This may be from a lack of shower facilities where individuals live, an inadequate supply of hot water or simply the high cost of using standard utilities. So the employer is expected to provide some of the services that may not be easy to get at home. McDonald’s already does this in many of the countries in which it operates, including Rumania, Slovakia, Latvia and Poland.

In many locations, just building the golden arches and locating food that will meet company standards requires hiring an entire network of support services such as engineers, construction workers and agricultural experts. It’s a tall order for HR professionals to fill. But one they have had lots of practice doing.

Entering a new country requires extensive planning and flexibility.
To enable McDonald’s to open restaurants in new countries, the new local HR managers, as well as the local restaurant managers, must receive training. So they can observe real operations, the training often takes place in a country where there’s already an established restaurant. A sparkling-clean, stainless-steel counter with quiet cash registers and no customers is quite a different work scene than one with bustling crew members reaching over each other to scoop fries into paper bags, fill beverages and scurry to get the requisite Filets-O-Fish and Quarter Pounders on trays or in take-out bags while people are lined up 10-deep.

Consequently, training new managers often requires that they cross borders regularly—to train Monday through Friday and then travel home on the weekends. This means visas and work permits have to be in order for each employee, which can be a tricky balancing act. HR must ensure all paperwork is prepared accurately well in advance, but not too far in advance—because these individuals can’t be employed too far ahead of the training period.

“We currently have managers training in New Zealand who live in South Africa,” says Johnson. “When we interviewed in South Africa, one of the questions we asked was if the person had a passport. That’s a question we wouldn’t ask in the United States.”

And, early on, local attorneys well-versed in labor laws coordinate with the HR director for the country to establish what the policies are going to be. “We have a responsibility to ensure that all the local employment practices, policies and regulations are met. We do a lot of research to ensure that happens. We understand as a global company that we can’t simply take the employment practices as they are in the United States and transplant them,” says Johnson.

However, there are times when McDonald’s introduces American ways to other countries—for everyone’s benefit. “Typically, when we go into a new country, there are lots of times when the quick-service restaurant industry is either nonexistent or very new. As a result, the culture, laws and customs don’t accommodate the things we need to operate our business properly. It becomes an opportunity for McDonald’s to bring some of these things into a country and to put some folks into the workforce who wouldn’t normally be in the workforce, particularly homemakers and university students who are working for the first time,” says Dan Laino, home office director, international human resources.

“We often introduce the concept of flexible scheduling or part-time scheduling. It’s quite a common occurrence for us to go into a market and have our practices of flexible and part-time schedules be the first that have ever been introduced. Sometimes we have to be very adaptable and patient in trying to establish these practices,” says Laino.

For instance, it isn’t something the company can implement immediately in some cases, especially if the common employment practice is to hire individuals full time. It may require a lot of time talking to labor ministries as well as other local business people to explain the advantages of having flexible or part-time scheduling as an employment practice. Full-time employment precludes young people and students in some cases from holding a job. “We provide the fact-based rationale that you can actually employ more individuals if you have a practice of part-time employment because some of those people have children at home or are students and aren’t able to be employed full time,” says Johnson.

Selecting the best from a menu of talent.
Whether hiring full-time managers or part-time cooks, recruitment is easy for McDonald’s. When it began hiring for its restaurant in Moscow’s Pushkin Square, 27,000 applicants tried out for the opportunity to don Ronald McDonald’s colors. This initial rush of applicants is typical because of the company’s immediate brand recognition. “We put the arches in a newspaper [ad] and we get an onslaught,” says Laino. “The trick is to maintain that employer image and enhance that image so we’re the employer of choice in a country.”

McDonald’s establishes itself as an employer of choice by paying top wages for high-quality employees and providing a benefits package that exceeds the minimum. “If you want to employ the highest caliber of individuals, you need to pay them a wage that draws [them in],” says Johnson.

What does that high-caliber individual look like? The most common trait McDonald’s employees share is an attitude that customer service is most important. “The employee’s ability to be customer-service oriented is just as important whether [he or she is] serving the customer directly or whether [he or she is] serving someone who’s serving the customer directly,” says Wilner.

Selection, therefore, focuses on identifying employees—whether entry-level or management—who are customer- focused. It begins with recruitment advertising that emphasizes customer service and continues with preliminary screening that restates this theme: The right attitude is equally as important as—or more important than—technical competency. Then, as the company moves into its selection systems, it looks at specific skills, general knowledge and customer service. “Finding, developing and retaining the best people is one of our most important functions in HR, and we see it as an integral part of our success as a company,” says Wilner.

Some naysayers don’t believe the McDonald’s attitude translates into every language. Before opening Russia’s Pushkin Square restaurant, now the busiest one in the world serving 40,000 to 50,000 customers daily (for a total of 50 million since 1990), many people on the sidelines expected it wouldn’t be easy to motivate employees: that this crew of 1,560 individuals weren’t going to want to wait on customers, smile and have a good time doing it.

“I think back when we first opened in Moscow and people said they weren’t going to be the type of employees who were going to get turned on,” says Laino. “When we opened the first restaurant, worldwide video coverage showed that customers would walk in and they thought they’d landed on another planet. They faced a highly enthusiastic, high-spirited crew at the front counter [with arms extended, and with] smiles on their faces, asking if they could be of help. That’s what we call ‘ketchup in the veins.'”

How does McDonald’s ensure it hires these kinds of individuals? Already in the hopper is research about successful McDonald’s managers and the knowledge, skills and abilities they possess. A success profile includes leadership skills, ability to manage people in the restaurant environment and high work standards. For store management positions, after the initial screening and before the final decision, people are invited to work for three to five days in one of the restaurants. “It gives the applicants a chance to try out the job and screen themselves out. It also gives us an opportunity to see how the people actually function in the environment they actually are going to be working in,” says Wilner.

With a strong commitment to staffing locally and promoting from within—even when opening locations in new countries—McDonald’s HR finds good talent efficiently. The commitment initially is to find good people and be able to turn over the operation to local employees who will run and manage it.

Take Beijing, for example. The Tieneman Square McDonald’s opened with approximately 100 managers for a large, 26-cash-register restaurant. After they were hired, workers began training in Senzhen, which is approximately 1,000 miles away. “We have them work in a restaurant working typical shifts, working shoulder-to-shoulder with an existing manager learning some of the basics of the management job, and at the same time we get a chance to try them out,” says Wilner. The manager fills out an evaluation, and the individual fills out one to determine whether or not a job offer should be made.

“Our belief in promoting people from within, throughout all levels of the company, is a major way we source our management people in China, as well as in other markets around the world,” Wilner says. With a large percentage of store managers who have come up through the ranks, it helps attract people because they know they can work hard and move up. “It also fills our recruiting needs. When we have someone who understands our corporate culture, understands our way of doing business and understands the local culture, it’s a successful part of the way we develop our global talent.”

Comprehensive training assures uniformity.
Having the right employees in place is just the first step. Then, there’s training. And, if the company serves up anything well, it’s certainly training. Hamburger University may be headquartered in Oak Brook, Illinois, but it’s set up to provide training in 22 different languages, to provide simultaneous translation and even to teach in two languages at the same time. There are also training centers in Munich, Germany; Tokyo; Sydney, Australia and London. The training centers get it down to such details as being sure crew members know at what temperature hamburgers are supposed to be cooked and how to inspect restaurant facilities to ensure quality standards are met.

There’s a complete training department in mainland China as well. Managers are taught to give performance reviews, including how to give feedback, how to listen and what to do if a person becomes defensive. And, similar to other locations around the world, the China facility trains managers on every facet of the operation. They, in turn, train their crew employees.

Little things such as logistics may get in the way, but McDonald’s managers consider them only hurdles to overcome. For example, when the company was opening new locations in South America, some pieces of equipment were available, but managers learned that the hamburger grill and the deep-fat fryers wouldn’t arrive in time to train employees before the store opened. So, what did they do? They created mock-ups of the equipment out of cardboard. Crew members practiced cooking burgers on a cardboard grill and worked dummy fryers to perfect their skill in cooking McNuggets and fries. Indeed, by being able to simulate the training it needed for the crew, the restaurant opened on time with a trained staff.

McDonald’s sees its biggest challenge today as trying to set itself apart from its competitors. In its 1994 annual report, McDonald’s says: “In a copycat world, the best way to stand out from the crowd is through customer satisfaction—100% of the customers, 100% of the time…. It’s no longer enough to measure restaurant performance by our internal standards, no matter how exacting. Success has to be measured through the eyes of the customer and the people who serve them.”

While many businesses may not need to approach their operations with this level of exactness and attention to detail, McDonald’s way of careful planning is a lesson for every business. It’s a multinational company that’s able to deploy its HR talent globally to painstakingly address local concerns. It requires flexibility and creativity—and some of those special ingredients—that all companies can create if they desire.

It isn’t easy to choose the right person for a job. We all know of high achievers who don’t perform well on tests. We’ve had experiences hiring brilliant people who have had dazzling recommendations but who show up to work late or perform poorly on the job. Enter: employment tests (commonly used tools for hiring, as well as training and placement decisions).

When the hiring of a diverse workforce is of paramount importance, however, the appropriateness of pre-employment testing for a multicultural workforce takes on a different cast. The major question, of course, is: Are these tests impartial?

Human resources executives are concerned that written and verbal aptitude, personality and achievement tests may not give them the accurate information they need when applied to applicants from diverse backgrounds. For example, can employers assume that a foreign-born bilingual applicant would select the same right answers as a person would who was born in the United States and whose native language is English? What about cultural factors that may persist, even when language isn’t a problem?

Some companies use no paper-and-pencil tests. They rely strictly on interviews and recommendations. At the other end of the continuum are businesses that buy packs of tests, administer them, score them and key the results into a computer. The tests and assessment services run the gamut from inexpensive skill examinations that can be scored and interpreted in minutes to in-depth personality assessments that require extensive time and judgment on the part of both the test taker and examiner.

Regardless of the scope of pre-employment tests, some are better predictors of success than others; some are more fairer to all groups than others are. Most experts believe that tests should be only one component of the hiring process.

“In our opinion, it’s best to take a battery approach. Look at all aspects of the person—as much as is feasible—and make decisions with everything in mind,” says Scott G. Howard, president of Reid, Merrill, Brunson & Associates in Denver. The company provides tests for pre-employment, promotion and internal career-development purposes. The assessments include:

• Interest surveys
• Skill and aptitude tests
• Behavior and personality measures.

“We try to compare [potential employees] with people who are or have been successful in the position to be filled. We look at strengths and weaknesses, and make recommendations for improvement,” says Howard.

Strengths and weaknesses, similarities and differences. These are key factors in a person’s employment desirability. In this time of diversity awareness, many people find that one of the advantages of conducting assessment is that tests point out differences between people.

“We’re in an era of international competitiveness. We’re looking for a variety of people to run our businesses, and to sell and make our products,” says Charles F. Wonderlic, Jr., vice president of Wonderlic Personnel Testing in Northfield, Illinois. “It means identifying the superb, not just the norm or average.” This involves asking such questions as:

• “How are you different from me?
• What do you like?
• What are you best at?
• What are you not best at?
• Where will you accelerate?
• Where are you not going to fit?

“These are questions that tests can begin to answer,” says Wonderlic.

Although generalizations are risky, most experts agree that testing is far more sophisticated today—and more valid, in most respects—than ever. Still, human resources professionals who must use tests and nevertheless are interested in hiring a diverse workforce need to know how to employ testing to their best advantage.

Job-specific tests are best.
“Some employment tests lead to significantly different passing rates for minorities when compared with majorities,” says John W. Jones, vice president of research and service for McGraw-Hill/London House, a leading assessment publisher located in Rosemont, Illinois. “Companies seeking a culturally diverse workforce prefer tests that don’t discriminate unfairly.” In addition, some employment tests clearly are job-specific, and others are more general, according to Jones. General tests originally were developed for clinical or educational settings, rather than for occupational settings. “Research shows that tests developed specifically for the workplace tend to be more accurate predictors of employees’ on-the-job performance than the more general psychological tests are,” says Jones.

Therefore, job-relevant tests that have no between-group differences are the ones to use. According to Jones, an example of this type of test is a multidimensional selection test that measures job applicants’ attitudes toward a wide variety of workplace behaviors, including integrity, dependability, service, safety and productivity. Jones says that job attitude tests usually are fair to all protected subgroups. “They’re ideal for the age of cultural diversity in the workplace,” he says.

Jones says that general psychological tests that do yield differential scores for certain subgroups might include a clinical personality test that was designed to assess personal values, family adjustment or emotional health. There also are some intelligence tests that have been scientifically validated in the workplace, but which have an adverse impact on protected groups, and therefore are controversial. In addition, there are some tests that aren’t accurate predictors of employees’ behavior, although they don’t impact any group adversely.

“I believe in valuing diversity and using the very differences that we were supposed to avoid,” says Lewis Griggs, president and executive producer of Griggs Productions, a San Francisco-based company that produces diversity training films. “I feel that any test of anything is, of course, biased by its maker—it can’t be otherwise. Still, any test is legitimate for what it tests. The individual using the results merely has to have the perspective to use that information responsibly and understand what he or she is testing for.”

For Griggs, this means giving a woman the opportunity to prove that she can lift 100-pound hay bales or giving a man the chance to be a good cross-cultural Avon salesperson in predominantly minority areas of the city. “But, isn’t it a legitimate question to ask, ‘Are you strong enough to lift the hay bales? Are you bicultural enough to be the appropriate salesperson for Avon or to sell insurance to Vietnamese immigrants?'” asks Griggs. “If we don’t ask those obvious questions, we’re putting our heads in the sand. We’re denying the real differences. We’re also denying the opportunity to discover differences that can be competitive advantages, all else being equal.”

Identify skills needed for specific jobs.
First, analyze the job. Find out which activities the person must accomplish. What does he or she have to do adequately or superbly? Focus on the things that the person has to do that require a high level of competence. Look at the necessary skills to achieve success on the job. In general, what qualities must that individual have if he or she is going to accomplish that success?

Then back off from there and remember that you aren’t just assessing a person, you’re assessing a specific person for a specific job. For instance, the job may require extensive contact with people. The employee has to perform customer-service-related activities and make customers happy. Find out what types of measures would reveal whether an employee would be good at serving customers and whether he or she would be happy doing that type of work. In this case, you would need a personality test.

In other cases, testing is obvious and is used simply to weed people out. For example, if one skill required is the ability to type a minimum of 45 words per minute and the candidate can only type 20, it’s clear that the person isn’t adequate for the job. “At that point, regardless of your status or whatever the unique attributes are that the individual brings to the organization,” says Wonderlic, “if he or she doesn’t have the minimum skills required—and what we’re really looking for is someone who has the maximum, who types 85 words per minute, who can also write, who has an understanding of the people in the community—then the test will help the human resources professional make the rejection.”

Once the job needs have been identified, the next step is to look for a company that can be an information resource—a test vendor or publisher that will help determine your company’s assessment needs and help put them into action.

Howard suggests you look at the testing company’s research. What types of studies has it done? What groups did it use in these studies? What control groups did it use? What was the level of detail?

“Ask the company to give you a description of the groups used in its studies, including the majority groups. Were they all males who have had two jobs each and who have been on the job for 15 years, or is there a good representation of the entire population? Ask which protected groups were studied,” says Howard. The answers should come back to you in easy-to-understand language that a businessperson can use, not psychobabble, he says.

Howard suggests employers that routinely hire people who either don’t have a lot of work experience or whose first language isn’t English (in manufacturing, for example) ask the test publisher if it has analyzed that specific population. See if there’s adverse impact built into the test results.

Another crucial element is to be sure that test publishers track EEO and ADA data. If the company is good, it will up-date statistics, continuously track adverse impact and update norms. (See “A Glossary of Testing Terms,”)

“A good consulting provider can help people decide what they need,” says Howard. Engage in a relationship with the provider. Some people call Reid, Merrill, Brunson & Associates (Howard’s testing firm) saying they need one thing when really they need something else, which becomes evident after they’ve described it.

You also should ask about alternative forms of specific tests. “A good test publisher will have many alternative formats for each test,” says Wonderlic. For example, Wonderlic’s tests are translated into foreign languages. One test is available in 16 languages. Wonderlic says the company could make use of the test translated into even more languages.

Language isn’t the only area in which differences can affect test taking. There are other subtle, but very important related differences among people. For example, people who come from Puerto Rico use decimal points as Americans do, and those who come from Mexico use commas, although both groups are Hispanic and speak Spanish A test should allow for these differences. “We want to make it as easy as possible for them to understand the questions,” says Wonderlic.

McGraw-Hill/London House has formed an alliance with Berlitz and other companies that do translations. Jones says this is crucial because multilingual versions of tests are becoming important. Test designers are becoming more culturally sensitive as a result. “We aren’t assuming that everyone should be forced into the English version,” says Jones.

There’s more to assessment than meets the eye, however. For instance, it isn’t simply the translation. Let’s say the human resources manager identifies a Vietnamese woman who doesn’t speak English but has an I.Q. of 140 and is perfectly capable of handling any management learning objective. She could learn at a high level and solve problems on the level of a manager. “You can assess her English speaking ability or ability to learn English,” says Wonderlic “but you also have to assess her potential for integration into the workplace. You have to do the follow-up. How do you incorporate a person who scores well on a version of the test translated into her native tongue, but doesn’t speak the language of the workplace?” He continues by saying, “We want to maintain and promote diversity. We also want to maintain and promote productivity. We want to find a way to do both.”

The test format is another important criterion. This can mean large print, Braille or audio. This is especially important because of ADA requirements.

Finally, be sure there’s scientific norming. This is a process that assures tests are equivalent across cultures. For example, all test questions should have the same meaning regardless of a person’s background.

Although there’s a lot to consider when deciding whether to use pre-employment testing when hiring members of a diverse workforce, many human resources executives deal with such considerations all the time. And these professionals don’t always have the same opinion about pre-employment testing.

Kraft General Foods considers that testing is an investment.
Charles Reid, director of diversity management at Kraft General Foods Inc. in Northfield, Illinois, always has been a proponent for pre-employment testing. The reason? “I think testing can provide information that’s valuable to an individual or the tester but couldn’t be obtained under other circumstances,” he says.

When Reid came into the business world from the education arena in 1972, he says that tests weren’t being used correctly by business and industry. The courts ruled that some tests were discriminatory. When companies stopped using many of these instruments, interviewers were thrown into a quandary. They didn’t know how to check for the sets of skills individuals had, what they were permitted to ask prospective employees, or what information they could look for to help them make valid decisions.

“A properly constructed test looks at the elements of the job and then measures the finite characteristics of the candidate that guarantee relative success. Those are the things that ought to be looked at in testing,” says Reid. “For the past 20 years, when people have asked me about tests, I’ve encouraged them not to throw them out.”

At Kraft General Foods, the company looks at testing from an entry-level perspective. It also uses tests to answer work-related questions, such as mechanical skills. The organization’s attitude is that it’s better to test in the beginning for skills that will be used on the job, than to invest the time and energy in hiring people and then discover six weeks later that they can’t do the job.

Reid describes himself as an African-American who has worked in industry for about 20 years and is trying to take an honest look at who the entrants are to the workforce and what skills they’re bringing. He supports the use of testing because he’s finding that employees are lacking skills. “When you look at blue-collar workers, nonexempt clerical workers or professional managerial workers, you’ll see that each situation is a little different. Because roughly 80% of the workforce in most companies [in a manufacturing environment] is blue collar, however, this group has a greater impact. I think that the skill level of the blue-collar workers coming in today is less than it has been in the past,” says Reid.

He says you can’t assume that just because a person has completed a four-year secondary program, he or she has adequate skills. Reid, who has also served on the National Board for the Literacy Volunteers of America, points out that at least one adult American in five is functionally illiterate. “If you don’t use paper and pencil testing, you may miss the fact that the person is unable to read. I think a paper and pencil test gives you at least an indication of whether you have a problem.”

Reid quickly adds that he isn’t intimating that just because a person can’t read doesn’t mean he or she isn’t skilled, because many illiterate people today are functioning adequately in their jobs. It’s important, however, to have that information. A verbal interview generally wouldn’t discover this fact, Reid says, because many illiterate people have outstanding coping skills.

“When you think about what’s happening in the educational system, people, especially people of color, are being undereducated. Therefore, we lack the skills that we need for a high-quality workforce,” says Reid. He goes on to explain that whenever there’s competition for the highest-quality people, it means that companies are competing for the same people. When the applicant pool includes individuals who don’t have adequate skills or who will need retraining if the company does employ them, testing is a way of establishing the level at which each person comes into the company. “It allows you to set up training programs to modify or develop skills that the individual brings to you, and to help him or her become a productive employee,” says Reid.

Cahners Publishing Company tests only for some positions.
As a general rule, Newton, Massachusetts-based Cahners Publishing Company doesn’t do pre-employment testing. The company does conduct some testing for sales positions and for certain management positions. “When we do test,” says William Stevens, Cahners’ director of human resources “it’s only to provide an additional tool to use in the employment process—in addition to such information as experience, things they may have published (for writers) and territories they covered for other companies (for sales).”

Cahners uses tests only with finalists in the selection process. If the company can narrow the field down only to 10 people, for example, it might use testing to narrow the candidate list further.

On the sales side, Cahners uses testing to find out if the individual is self-directed, motivated or needs guidance. And if guidance is indicated, the testing determines what kind is needed. Once the person is employed, the company uses the test results as a tool for the manager to help the person develop professionally on the job.

Cahners continues to use the tests from time to time to focus on training needs and to help managers understand and pay attention to certain facets of the individual’s personality. It’s helpful to know, for example, if a worker doesn’t like to work while someone looks over his or her shoulder.

Stevens, however, emphasizes that testing is merely one component. “You can talk to a recruiter and the recruiter will say, ‘You can give me all of the test results you want, but there’s something inside me that gives me a good feeling or a bad feeling about somebody. It’s that gut feeling,'” says Stevens. “On tests, an individual can have a good day or a bad day, but in the interview process, if it’s done properly, there’s enough diversity that a person who doesn’t do well with one manager might do better with another. In a test, you don’t have that opportunity for variation.”

Stevens believes that tests won’t weed out particular cultures. In fact, he says that the problem for recruiters is having enough cultures to draw from in the beginning. “The problem is getting [diverse individuals] into the loop, and it’s more difficult in different parts of the country,” he says.

Cincinnati-based Procter & Gamble also believes that any testing procedure should be supplemented with other hiring tools. The company hires only at the entry level. “The use of testing at Procter & Gamble is of paramount importance,” says Lynwood Battle, manager of corporate affirmative action. “Selection is critical because we grow all our management from inside the company.”

Like the other companies mentioned, Procter & Gamble uses tests as part of a total assessment of job candidates. “It has a lot of key indicators that offer a profile of the successful candidate,” explains Battle, “and only a part of that process is a paper-and-pencil cognitive test.”

For the previous four years, according to Battle, the company has recruited minorities at a rate of 20%, which is significantly higher than the percentage of available minorities who are receiving college degrees. The process must be working because, according to Battle, women and minorities are moving up at a rate commensurate with their representation in the population.

He believes that skill tests generally are valid, although he says, “I can’t emphasize enough that the test (a 45-minute cognitive test) is only one aspect of the total assessment process.”

The assessment of a candidate will take several days, beginning at the college placement office on campus. It can proceed for a period of several weeks. The paper-and-pencil test is administered along with the other components of the company’s job-hiring procedures. Only after all of the information is compiled and evaluated is the prospective employee reviewed. “The determination is based upon a total assessment process,” says Battle.

It seems clear that within the proper framework, testing is a valuable tool for human resources professionals. Tests give reliable data about skills, and will point out deficits as well as strengths. When employers go outside the skill-testing arena, it becomes important to choose assessment professionals who can help meet their specific needs and focus on diversity.

Note: Kraft General Foods is now known as Kraft Foods Inc. Charles L. Reed is currently the director of ethnic external relations, Kraft Foods Inc.

Here are seven ways that HR can facilitae the move:

1. Encourage families to spend a lot of time on pretransfer preparation of their children.
   If the parents choose the international school without the children, have them take videos and photographs of the school. Obtain school literature. Have them get the sports calendar. Load the kids with this information. They desperately want it.
2. Try to connect families who have been in the location with new ones relocating.
   If kids can talk with others who have been there they can ask questions, such as “What do the kids wear?” “What do they talk about?” “Do they have a prom, a debate team, a football coach?” Don’t underestimate the value of these simple connections.
3. Involve the children in the planning phase.
   This will be even more helpful for older children who may not want to go in the first place. Cross-cultural counseling for children pays big dividends.
4. Provide families with computers and access to e-mail and the Internet so they can stay in touch with their families and friends.
   Consider EAP possibilities internationally or at least via phone.
5. Be on the phone frequently with the expatriate and the spouse.
   Develop a personal relationship to whatever extent is possible. Try to visit the expatriates and see their living situations.
6. Be sure that community networks are available if a family has trouble—make that suggestion at the outset before any problems arise.
   HR can go so far as to add this reading material and community resource information to the written material they hand to the expatriate family.
7. Critical to reentry to their society, children need to identify with their own cultural and national identity.
   Suggest that parents subscribe to many American (or home country) magazines that keep the family up-to-date on popular culture—Sports Illustrated, People are a few. Suggest their friends send videos of current American television programs.

Global scandals make headlines daily. There was the Daiwa Bank trading scandal, in which billions of dollars were lost from improper bond trading—and hidden by high banking officials. There was the 1995 U.S. Department of Labor report documenting child labor abuse in 56 countries where children are used to mine gold, among other things. Then there was the Ex xon Valdez disaster, the BCCI (Bank of Credit and Commerce International) debacle, and the Bhopal catastrophe. And there were other events that never made the newspapers: piracy of intellectual property, payments to third parties so companies could do business, nepotism and conflict of interest.

All these incidents have one thing in common: they’re a matter of ethics—or a lack thereof. The issue of global business ethics is the ultimate dilemma for many U.S. businesses. As companies do more and more business around the globe, their assumptions about ethical codes of conduct are put to the test. Corporate executives may face simple questions regarding the appropriate amount of money to spend on a business gift, or the legitimacy of payments to liaisons to “expedite” business. Or they may encounter out-and-out bribery, child-labor disputes, environmental abuse and unscrupulous business practices. As organizations expand globally, HR managers must play a role in helping to define and achieve ethical behavior from employees throughout the world.

To accomplish this, many international businesses are creating codes of conduct, like the ones such companies as IBM, Xerox and Shell Oil have had for years. These three companies, and others, including Levi Strauss, Honeywell, Digital Equipment and H.B. Fuller, are taking their efforts even further—by incorporating their messages into everyday business practices and making them living documents.

What are global ethics and how do they impact business?
Defining ethical behavior in a domestic setting is tricky enough. Not only do people respond differently to moral questions, but individuals—even in the same culture—interpret morality differently. When you add the cultural overlay, business ethics can become a quagmire of moral questions. Some even say the term “global ethics” is an oxymoron. Is it?

“One of the myths about global business ethics is that when you do business in other cultures, they will have a whole set of different ethical values and mores. That simply is blown out of proportion,” says W. Michael Hoffman, executive director of the Center for Business Ethics at Bentley College in Waltham, Massachusetts, and co-author of “Emerging Global Business Ethics.”

“When you dig deeply enough and scrape away all the trappings, the real ethical solid building blocks or principles of most cultures are the same.”

For example, most people agree mistreating children is wrong, but they sometimes disagree about what constitutes mistreatment. For instance, most Americans consider child labor mistreatment. But in countries in which economic conditions warrant child labor, and laws and definitions of the family unit support it, it isn’t regarded as cruel, but rather as a fact of life. “You have to understand the full context of the ethical decision-making of each culture. Once you understand it, you might say it’s ethically incorrect without believing it’s immoral,” says Hoffman.

He says it’s important for Americans—who sometimes get too moralistic—to walk a moral tightrope between the two extremes of ethical fanaticism and ethical relativism as we venture into other societies. “Ethical fanaticism is the position that says my ethical position is right, and I have the absolute answers. It doesn’t recognize legitimate ethical disagreement and has no tolerance or appreciation of different perspectives, including cultural perspectives,” Hoffman explains. “Ethical relativism is an equally bad extreme because it’s saying there are no absolute values, which eventually leads to a state in which there’s nothing right absolutely or wrong absolutely. It’s a philosophical position that says I have no way of telling you you’re morally wrong if you go out and kill or eat people because there are no absolute values.”

Walking the middle road isn’t always easy, however. Some global actions clearly lack ethics, such as the actions of Nazi Germany, for example. But there are others that are gray, such as the use of DDT in countries where there are no substitutes and without which the crops would be consumed by insects. Even the use of bribes can be debated on moral grounds. Bribes of hundreds of thousands of dollars to line a military general’s pocket, most would agree is wrong, but what about payments to people who take goods off the docks to expedite service? That isn’t considered unethical under many circumstances.

Ethics are a matter of business.
In response to these questions, some groups are taking a leadership role. The Caux Round Table is one such organization. Created in 1986 by Frederik Philips (former president of Philips Electronics) and Olivier Giscard d’Estaing (vice chairman of INSEAD), the Round Table brings together leaders from Europe, Japan and the United States. Their mission: To focus attention on global corporate responsibility, in the belief that the world business community plays a role in improving economic and social conditions.

Including such giants as Siemens AG, The Chase Manhattan Corp., ITT Corp., World Bank (France), Minnesota Mining & Manufacturing Co., Canon Inc. and Matsushita Electric Industrial Co. Ltd., the group has developed world standards to measure ethical behavior. The standards are based on two principles: the concept of human dignity, and the Japanese doctrine of kyosei—the idea of living and working together for the common good to enable mutual prosperity. The Round Table is proactive in its commitment to global responsibility. Founders believe business can be a powerful force for good because it’s essential to provide employment and products and—more importantly—because it has the capacity to improve the lives of its customers and employees.

The Round Table lays out seven general principles that range from the general edict to protect (and where possible, improve) the environment, to more specific ideas, such as supporting the multilateral trade systems of the world. Underlying these ideals is the assumption that respect for cultural differences requires sensitivity and some flexibility. One of the most astounding aspects of the document is that it’s values-driven but steeped in business acumen.

Indeed, Robert MacGregor, president of the Minnesota Center for Corporate Responsibility—the group largely responsible for the language of the Caux Round Table’s Principles for Business—sees ethical behavior as a business imperative. “The world has shrunk and is so interconnected that behaviors everywhere affect behavior everywhere else.”

For example, although a company can save money by laying off expensive American workers and hiring cheap child labor in Bangladesh, these types of actions will backfire financially for a company in the end. “We want companies to move their jobs and capital around the world while making money, [and still] following responsible standards.”

H.B. Fuller Company, makers of adhesives and other specialty chemicals, agrees that honesty and trustworthiness—themselves important—translate into dollars and cents. Case in point: The St. Paul, Minnesota-based company pursued buying a subsidiary from a European adhesive manufacturer. It was the only American firm out of a dozen companies interested in the purchase. The European company was interested in H.B. Fuller’s bid, but looked a little nervously at the U.S. company because the subsidiary wasn’t making money and had too many people in the business. “Their perception of U.S. companies is that they don’t think twice about having massive layoffs regardless of what it does to people,” says Tony Andersen, chair of H.B. Fuller’s board of directors. “We showed them through oral histories—examples within our company—that our corporate culture values people. That really counted to this large European company, which helped us finance the acquisition.”

Clearly stating company values is the first step.
H.B. Fuller’s situation demonstrates how ethics stem from corporate values. “You’ve got to think through very clearly what your company’s values are—what you stand for wherever you do business,” says John Buckley, ethics officer for Maynard, Massachusetts-based Digital Equipment Corp., which has more than 50% of its employees outside the United States. Digital’s Code of Business Conduct clearly defines practices the company expects its employees to use in their daily activities. This substantial 27-page booklet, which addresses such ethical issues as managing company information and gift giving, provides the wisdom in a specific manner that requires employees to think about their behavior. For instance, in the section on gifts and entertainment, employees are given the following scenarios to think about: “You receive an unsolicited holiday gift from a supplier; you’re invited to an annual trade show at a resort by a supplier who offers to pay your airfare and hotel bills; customers are visiting a Digital site for the day and you would like to take them to lunch. Do you know the proper business use of gifts and entertainment?” it asks.

The rest of the chapter details the company’s position on gift giving and receiving, its implications and possible misinterpretations. It’s straightforward and unambiguous, and offers the chance to question one’s own actions.

“Wherever we do business, it’s highly dependent on personal relationships between the people conducting the business. By basing our code of conduct on the company’s core values, we believe it’s more transferrable and adaptable internationally,” says Buckley.

Step two: Communicate.
Clear principles are one thing, but they’re useless unless they’re communicated to employees. Digital communicates its values through company newsletters, electronic transmissions and in training programs. Everyone receives a code of conduct booklet, and the company requires all managers to discuss the code with their employees at least once a year.

Honeywell Inc., based in Minneapolis, recently has translated its formal code of ethics into six foreign languages. Senior management regularly communicates the importance of ethics and compliance in newsletters, ethics presentations and other periodic communications. For example, a recent newsletter for the Asia Pacific region included a letter from the president talking about bribery. He reiterated that bribery will not be tolerated at all, and that the company will walk away from business rather than engage in bribery.

Levi Strauss & Co., a recognized leader in corporate social responsibility, encapsulates its values in the company’s mission statement, and reiterates them in an Aspirations statement and in a printed code of ethics. The San Francisco-based company clearly defines business ethics and commitment to employee respect and fair treatment. Its statements clarify what’s important, and what’s expected in behavior.

But Levi Strauss doesn’t leave the translation of its statement to chance. Since 1988, the company’s HR department has conducted global training on different aspects of the aspiration statement. Managers and employees from around the world participate in three- to five-day courses on various aspects of leadership—one of which is ethics. The three-day ethics course gives people the opportunity to understand the company’s expectations and definitions, and also gives them the chance to identify their own moral principles to see where they overlap with the company’s.

“When people are clear about their own values and can identify the principles that make up ethical behavior, they have the tools for looking at potential decisions and the possible impact on different stakeholders, and whether or not the decision is an ethical one based on these principles,” says Richard Woo, currently senior manager for global communications and previously regional manager for community affairs for Asia-Pacific.

An important part of the ethics training is to help people learn a decision-making tool—a process for making ethical decisions—called the Principled Reasoning Approach. The Principled Reasoning Approach isn’t simply a name; it relies on thoughtful evaluation and a rational process to figure out how ethical principles translate into behavior.

Here’s an example: The company went through the process when it considered whether or not to enter the South African marketplace. Levi Strauss convened a cross-functional task force, called the South Africa Policy Group, made up of Levi Strauss’ managers worldwide and included people from marketing, operations, finance and community affairs.

The group met over several months for one or two days at a time, and in between, members researched specific issues and reported back to the group. It researched the history of apartheid and the movement of businesses in the country—who decided to leave and who decided to stay. It identified the principle interests and who the different stakeholders were, including the anti-apartheid community that would be affected by Levi Strauss’ decision. The task force sent several key members to South Africa to conduct site visits and interviewed the ANC, members of the current government and members of community organizations. Finally, it talked with other multinational corporations already doing business in the country.

All of this took place as South Africa was going through the changes that eventually led to its free elections. The task force was able to make a recommendation to the company: that when certain conditions changed—including free elections—it would be the appropriate time for Levi Strauss to enter South Africa.

Such an inclusive information-gathering process allowed the company to make an informed decision that was based on its principles. It was able to create milestones so the company could judge the most appropriate time.

Since free elections were held, Levi Strauss South Africa opened both marketing and production facilities, including a multiracial, multicultural management team. The business also maintains an active corporate social investment program, which includes charitable contributions to the community—so it can be part of helping the country grow through the transition.

Apprise your business partners of your standards.
Levi Strauss also has global sourcing and operating guidelines that address workplace issues. The company uses these guidelines to select business partners who will manufacture its products. Established in 1992, its guidelines were the first created by a multinational company for its business partners. The terms of engagement detail everything from environmental requirements to health and safety issues. Among them: wages, discrimination, child labor and forced- or prison-labor issues. To create these guidelines, the company used the Principled Reasoning Approach. And to launch them, it conducted audits of contractors it was using worldwide.

Implementing the guidelines, Levi Strauss discovered that in Bangladesh, it had two contractors using workers in the factories who appeared to be underage. International standards have set a reasonable working age at 14. When the company brought it to the attention of the factory owners, the owners asked the company what it wanted the factory to do. There were no birth certificates so there was no way to know exactly how old these children were. Also, even if the children were younger than 14, they would very likely be a significant contributor to the family income and probably would be forced into other ways of making a living that would be more inhumane than working in a factory—such as prostitution or begging.

“So, we were faced on the one hand with a set of principles that were very clear, and on the other with the reality of underage workers and severely impacting their family incomes,” says Woo. The solution? “The contractor agreed not to hire any more underage workers,” he says. They also hired a physician to examine children who seemed to be less than 14 years old using growth charts identified by the World Health Organization. Although not hiring young workers may force them to find work elsewhere, Levi Strauss’ position is to be ethically responsible for business issues it can control—such as responsible child labor conditions—as opposed to social conditions in a country that it has no control over.

Levi Strauss also negotiated for the contractors to remove the under-14 workers they already had from the production line and continue to pay them wages as if they were still working. In exchange, Levi Strauss covered the cost of the children’s uniforms, tuition and books so they could go to school. When the underage workers reach the age of 14, they will be offered back their original factory jobs. The contractors complied with all this, “to maintain the contracts with us,” says Woo.

As a result of the company’s guidelines, the organization has made an impact on suppliers around the globe. It has brought about shorter work hours, seen infrastructures reinforced for better health and safety, seen fire extinguishers and fire exits put into workplaces, and seen contractors install equipment to meet environmental guidelines.

Translate ethical behavior into performance.
Once guidelines such as Levi Strauss’ are in place, it’s crucial to reinforce principles and ethical actions. Honeywell encourages its business units to use its code as part of their performance evaluations. Levi Strauss includes ethical practices as part of its professional evaluation. In other words, it ties compensation to performance, which includes ethics. Employee’s annual performance review includes questions about ethical dilemmas.

Accountability for the company’s code of ethics counts at H.B. Fuller, also. The organization identifies people within the business who are in positions that could be subjected to difficult moral decisions. In addition to being sure these employees understand the code of conduct, they receive an “audit” in which they’re asked about anyone who has done something that in their view might be questionable. “We communicate that it’s really number one in importance,” Andersen explains.

Despite its importance, ethics often fall by the wayside because companies aren’t clear on what they consider right and wrong. “It’s a difficult thing—to understand what’s the bedrock that defines your company and the way you operate, while keeping an open mind and trying to learn business practices in other countries,” says Buckley. “How do you make the trade off?”

You have to really think about it. Be open-minded. Learn. And be prepared to take the hard stand. “At some point you’re going to come up with the decision of not pursuing a piece of business because it violates your values. It could be labor practices or environmental concerns or corrupt payments. It could be that you realize you can’t do business while maintaining a diverse work force and that violates your principles.”

Hoffman calls it the child test. “If the action gives you any pause—and you can’t imagine explaining it to your child—then it’s probably a good thing to stop, look and listen before crossing the track.”

In any case, managers in multinational companies who are confronted with these situations have to think through their own ethics. It’s more than a delicate balance; it’s a critical balancing act.

These five tips can help you make the transition smooth:

• Give managers who will have responsibility for international assignees classes in cultural awareness, especially in ways that America may differ from the rest of the world
• At the very least, use your company’s diversity program to highlight working with different kinds of people
• Help managers become sensitive to different communication styles
• Remind managers not to assume the international corporate culture is the same as the one at headquarters. For example, a U.S.-based company may have a do-it-yesterday type of attitude that isn’t shared in other locations around the world. This will affect employee performance, especially at the beginning
• Help them realize that the employee-if coming from a subsidiary-may not be used to the scrutiny of working at headquarters. The same holds true for the bureaucracy.

OK, take this quiz.

1. Is the average global employee male or female?
   Answer: Male, by about 88%; although the figures are changing.
2. One of the most pressing issues for global HR managers is:
   a) Dual careers
   b) Effective selection of expatriates
   c) Cost containment.
   Answer: a, b and c.
   (Any, and all of the above.)
3. A new, hot destination for expatriates is:
   a) Japan
   b) France
   c) United States
   Answer: It’s c-the United States.

Surprised? You may have had an easy time answering questions 1 and 2, but admit it, number 3 was a surprise. While it might not be listed in the Department of Commerce’s “Big Emerging Markets,” ask many international HR executives and they’ll tell you there’s an influx of foreign nationals into the United States.

As companies rush to globalize, they’re bringing more and more people into the United States. Indeed, large numbers of middle managers, especially, are coming to the United States for developmental assignments, technical transfers, to head up project teams and to absorb the corporate culture. In particular, HR individuals often are here because companies want them to be able to return to their subsidiary divisions or joint ventures and use their new skills to operate independently. And, finally, some companies are bringing over inpatriates as a way to eventually employ fewer U.S. expatriates.

“We’ve seen increasing numbers. Companies are realizing they need to tap high-potential people from all over the world to develop their operations, so they bring them in for a couple of years to really understand the business from the U.S. vantage point,” says Noel Kreicker, president of Northbrook, Illinois-based International Orientation Resources. She can attest to the increasing numbers of incoming global employees. For the past two years, Kreicker’s firm has been doing as many cross-cultural programs for people coming here from other countries as for people going out.

Lincolnshire, Illinois-based Hewitt Associates surveyed their largest clients (18 multinational companies in the Fortune 100)-almost 70% indicated they expect the number of foreign nationals coming to the United States to increase. That’s a slightly larger percent than those who believe the U.S. expatriate population will increase during the next 10 years.

And guess what? These inpatriates are facing the same array of thorny issues as most other expatriates when approaching their assignments: immigration and legal issues, compensation and benefits questions, family concerns and culture shock.

“What!” you say. “How can American culture-which is well-known all around the world-be an enigma to foreigners? Why would incoming expatriates have trouble with our housing and our schooling?” Incredulous, you might ask, “Does someone actually receive a mobility premium for relocating to the United States?”

Well, the fact is, whether you’re going to India or Indianapolis, Russia or Racine, Wisconsin, outbound and incoming global employees confront similar issues.

Settle legal issues first.
Once an individual is selected for an assignment here, one of HR’s top legal priorities is to address immigration issues and visas. When a candidate is selected to come to the United States, dealing with the U.S. government and the Department of Labor begins to take on a life of its own.

“In the United States today, we need to recognize that there’s an anti-immigrant sentiment that’s making it more difficult for firms to hire foreign nationals,” says Ethan Bensinger, managing director of the Chicago office of New York City-based Fragomen, Del Rey & Bernsen P.C.

Companies generally use two types of work visas in the United States. One is the H1, commonly used when recruiting students from U.S. campuses, especially at the Ph.D. and master’s degree levels. Congress imposed a cap of 65,000 visas per year, which is quickly being met.

Another classification is the L1 intracompany visa that allows managers and executives to enter the United States for up to seven years if they meet specific requirements. L1 managers and executives can easily switch from their non-immigrant status to that of a permanent resident by filing a “Priority Worker Petition” with the Immigration and Naturalization Service. Bensinger explains that even though the assignment is initially intended to have a two- to three-year duration, often there’s a driving factor toward acquiring permanent residency status because of the accompanying spouse’s need to secure employment-which can only happen if he or she is a resident. Another factor might be the family’s need for residency status so they can qualify for the lower college tuition costs if there are children in that age group.

Another problem is that if an individual is using the H1, new U.S. Department of Labor regulations have become more rigorous. The regulations dictate posting job opportunities at the locations where the individuals are scheduled to work. There also are more stringent immigration rules about the person’s level of education and experience. And, there are several new bills on immigration reform pending in Congress that are sure to have a direct impact on the hiring practices of multinational organizations.

Then, there’s the waiting period required before you receive a green card (the common terminology for acquiring permanent residency status)-which in recent years has become more manageable. Prior to 1990, there were long delays of up to two or three years from the time an individual decided to stay here permanently. Bensinger forsees a time when that could recur if the quota of green cards to multinational workers is lowered. But, the significant impact is to the dual-career couple. The spouse of a multinational transferee can’t work legally in the United States until the family has a green card or the spouse independently qualifies for a working visa.

“The accompanying spouse doesn’t qualify for work authorization under the L1 intracompany transfer visa. If the spouse isn’t a university-degreed individual, he or she can’t normally qualify for the H1. So we have an accompanying spouse sitting home twiddling his or her thumbs until the time comes to obtain permanent residency status,” he says.

But since 1990, according to Bensinger, because of the large number of quota slots available for L1 managers and executives, these individuals have been able to obtain permanent residency within a period of six to 12 months, and so it hasn’t been too onerous for spouses. This is especially the case because it takes time to settle in. And before you know it, you have your green card in hand.

This could all change. Those new bills on immigration reform pending in Congress ultimately will influence multinational organizations and their ability to domestically hire or relocate well-trained, motivated multinational individuals.

Offer competitive compensation.
Just as complex as legal issues is determining the right compensation and benefits formula for inpats. Human resources professionals handle compensation issues in a variety of ways because the reason for using inpats varies. “Many companies are using inpatriates so they can use fewer U.S. expatriates,” says Joe LaSorte, international total compensation consultant with Hewitt Associates. “Instead of transferring technology by sending someone from Pittsburgh to Paris, they’re bringing someone from Paris here because it can often be less expensive,” he says.

According to LaSorte, people who are here on two- to five-year assignments generally are paid in reference to their home countries. “However, there are costs associated with bringing people here. You need to ship their belongings, possibly pay for their children’s education expenses, pay for their tax preparation, pay for return trips home.” It’s still relatively cheaper, however, because the cost of living in the United States is generally lower, so you don’t need to give them a cost-of-living allowance.

In rare cases, the home-country salary may be more than the U.S. one, and then the issue is similar to what HR practitioners face when they send out American expatriates who usually receive higher salaries than their colleagues. LaSorte had a client who wanted to transfer a senior executive from Argentina to Miami. The executive was making approximately 30% more than his American peers. Was a pay cut going to entice him to come to the United States? Unlikely.

Says LaSorte, “The other action (short of a pay cut) would be to raise everyone else’s pay, which of course isn’t going to work because then you’ve got everyone else bumped up to the top of the range. That’s not a good situation.”

The key is framing the compensation for the assignment in terms of a temporary transfer. And, communication with all employees is the best solution. When organizations send a lot of people back and forth, they generally will have a formalized policy about pay and other components of the package. If people are familiar with that before a move happens, they know what to expect.

Another nettlesome issue is benefits, especially health care. When you bring someone to the States from a country that has a national health service, you open up myriad scenarios. For some inpats, their national health system will continue to pay for medical expenses (although it’s a very cumbersome process); for many others, their systems won’t pay. You can put them on U.S. plans, but that could be problematic. For instance, if anyone in the family has had prior medical incidents, you might have a problem with pre-existing conditions, which could severely limit medical coverage.

LaSorte says approximately half the companies that have inbound employees put them into the U.S. medical plan. Others choose to leave them on their home-country plans with some provisions. For example, it’s one thing if they need open-heart surgery or major medical treatment-employees may choose to go back home. But they’ll need some coverage in the United States as well. Otherwise, what would they do for a sprained ankle or when their children have a cold? It’s far too cumbersome to deal with an insurer in another country 6,000 miles away for every situation.

There also are issues about pension benefits and social security. The United States has with many countries totalization agreements that facilitate keeping the employees in the sending country’s social security system and continuing to make contributions for them while they’re here, so they don’t need to pay FICA tax. Next, this brings up the issue of putting foreign nationals into U.S. pension plans-which have a lot of restrictions.

“There’s always a solution,” says LaSorte, “But you need to think about these issues [the implications of the compensation package, medical benefits, retirement contributions] before you make the moves.”

Treat international employees the same.
Clearly, there’s a trend emerging to treat people transferred across borders the same, at least conceptually. In other words, multinational companies are beginning to believe their people are going to have to cross country lines since they’re global. More and more managers responsible for globalizing their firms don’t think Americans should be treated differently from Europeans who relocate to the United States or Asians who move to Latin America. The trend is to talk about people as internationally transferred employees.

Some organizations are beginning to develop global-transfer policies by which everyone is covered under the policy, regardless of location of origin. SC Johnson Wax is one of those companies. “As part of our move toward globalization, we have developed a uniform foreign-service policy for two- to three-year assignments. International assignments help remove barriers and bring people in the company closer together,” says Geri Connelly, foreign service programs associate for worldwide human resources. “The policy facilitates international moves by not imposing financial hardships on the person moving. At the same time it treats people consistently and equitably. Even if we’re not all speaking the same linguistic language, we’re speaking the same business language.”

The Racine, Wisconsin-based manufacturer of household cleaning, personal care and insect-control products has 12,000 employees worldwide and 100 expatriates and inpatriates. Currently there are 15 inpats working at corporate headquarters. They come to Racine either to receive training that will give them a broader base of experience than what’s available at their smaller subsidiaries, or to fill an open position. Inpatriates aren’t new to SC Johnson Wax. The company has been bringing employees into the United States for at least 10 years.

Its package is a fairly standard one in terms of compensation and benefits. The company ties people to their home-country compensation, practices tax equalization and covers the cost-of-living differences between home and host countries. It provides housing assistance, pays for children’s education and offers a relocation allowance, which is a payment at the beginning and end of the assignment to recognize-and compensate for-the inconvenience of having to relocate. In addition, the company also offers cross-cultural training to all family members. Its commitment to developing a uniform transfer policy is a strategic move that enables it to globalize and transfer people around the world. One reason it keeps people on home-country compensation and benefits schemes is simply because social programs and national-health plans are among the most complicated issues to deal with in relation to the assignment.

Chrysler Corp., based in Highland Park, Michigan, does just the opposite of SC Johnson Wax. Chrysler compensates inpats on a U.S. salary basis. The giant car maker brings in about 15 to 20 people at any one time (and that number has been as high as 45), mostly from its subsidiary in Mexico. These individuals do technical liaison work or come on developmental assignments.

“We take a kind of simplistic point of view that if we give them a U.S. salary, they’ll be getting the equivalent of their U.S. counterpart. Then there’s no need for cost-of-living allowances or special compensation arrangements,” says Raymond Wilhelm, manager of expatriate administration and services for international personnel. Which isn’t to say that the company doesn’t treat them as special. “Because of the numbers, we used to kind of hold their hands throughout the entire process.” In fact, until recently the company had apartments set up for its inpats.

The inpat policy is quite similar to the expatriate one, with a few modifications. The company provides a foreign-service premium, housing subsidy, cross-cultural counseling and language training. “You have to understand the total compensation package that they had while they were working overseas to be sure what you’re doing makes sense for them,” he says. For instance, if you bring someone in from Frankfurt, there’s a 13th month paid to workers that has to be taken into consideration. By clarifying the compensation history and expectations of the inpat early on, HR can avoid misunderstandings that may affect performance later on.

What About the Family?
Finding the right compensation and benefits package is essential for getting the inpats to make the move. But keeping them happy requires helping their families.

With about 200 inpatriates and expatriates as his responsibility, Wilhelm sees family issues as being crucial. He’s not alone. “The family needs are paramount in a successful relocation because of the cultural differences and the specialized needs of families coming into this country,” says Samuel L. Pearson, international relocation coordinator for Indianapolis-based Eli Lilly and Company, producer of human health and agricultural products. “We learned a few years ago how important it is to place a lot of focus on the family’s needs. It’s kind of like a domino effect. If the children aren’t happy, the spouse isn’t going to be happy, the employee isn’t going to be happy, and the company isn’t going to be happy-it can all tumble down on you.”

The company calls their inpats International Service Employees (ISE). They number about 20 people a year and are scientists and financial and marketing people-highly specialized individuals. Pearson is called in after the candidate has been told about the position, and his job is to make sure that not only the employee is receptive toward the idea, but the family is as well. As soon as the candidate is identified, Pearson makes a phone call to the individual and starts the process. He puts them in touch with other ISEs who’ve created an informal mentoring program. They continue a constant communication process from the beginning (which includes a three-hour orientation to discuss the package, taxes, work permits and other necessities) until the family is settled.

If the needs of the family are predominant, the number one issue with families usually is schooling. The company pays for private schools if that’s what the parents choose and brings the couple over to the United States a month or two in advance of the physical move to house-hunt and investigate schools.

Last year, partially as a result of Eli Lilly’s commitment to making the lives of their inpats easier, and partly to help attract foreign talent to Indianapolis, Eli Lilly helped to found the International School of Indiana. The school is the brainchild of an international task force in Indianapolis which met to figure out how to attract more foreign investment, how to create more global thinking and how to help position the city for the year 2000.

The school opened with 38 students (pre-K through grade 3) in September of 1994. It has a French-American track and a Spanish-American track. Now in its second year of operation, the school has 81 students.

“With the help of other multinational companies, we expect to expand the school to a complete elementary school,” says Pearson. It’s one step to meet the needs of the company’s inpat families.

Chrysler found one need to be language training. Prior to Wilhelm’s arrival six years ago, no one had thought of giving inpats English lessons. The company started by giving English lessons to everyone in the family. “We assumed that they all spoke English, which they don’t, and even when they know technical English, it’s very different. We also discovered that we assumed they knew American culture. That was also not true.”

And, don’t fool yourself, adjusting to the United States and its culture isn’t easy. People need help with what we consider the little things-like finding a house and getting a driver’s license, setting up bank accounts, locating where to buy a car and learning how to bargain for one. In other words, people need help with the hundreds of details involved in relocating and setting up life in a foreign country. They may be highly regarded managers, but they’ll likely have trouble getting a credit card here. They may have expertise that’s in demand, but if they fit a certain profile, immigration officials may give them a hard time when they enter or leave our country.

“In my experience, when someone comes to the United States, many [Americans] don’t realize that the States is a foreign destination for [that person],” says Jack Keogh, originally from Ireland, and currently the managing director of client services for Mayflower International Inc. “Companies that send people to difficult places (such as Saudi Arabia) know they’re difficult and tend to think about it a lot. But they don’t see why somebody coming to the U.S. from Ireland or Germany or Japan should have a problem. In their estimation, this is the land of milk and honey. So, they don’t understand the difficulties.”

But, Americans are different-and living here in the States is a very different experience for those not from here. We want everything done yesterday. We’re bombarded at dinner with telemarketers offering limited-time offers. We have a sense of urgency and intensity unlike many other cultures and it can be intimidating. We’re incredibly scheduled; even children carry organizers with calendars booked by the hour for soccer practice, piano lessons and tutoring.

Americans are superficially friendly-breezily inviting people to “get together some time for dinner” or to “drop over”-unconcerned if it’ll actually happen or not. And, we’re transactional, able to do business while engaging in amiable conversation and social interaction with strangers. All of these traits can be confusing to non-Americans.

“And there are so many choices, here. It’s overwhelming,” recalls Keogh. “If you go to a deli and ask for a corned beef sandwich, they’ll ask if you want lettuce and tomato; mustard or mayonnaise; rye, white or wheat bread. You go to buy shoes and there’s 50 pairs in size 10-blue, black, brown. You want to order your phone service and then you need to decide which telephone company to use and then which plan is the best.

“The number of decisions you have to make on a daily basis is incredible. I think people from other countries do have a very strong feeling that this is a foreign country and, consequently, they’re looking at life in America as a challenge.”

As Americans, we may find this perception difficult to believe until we step back and think about it from a less ethnocentric, and more universal perspective. The fact that our lifestyle requires adjustments, that our customs may be strange to others, that our medical, educational and legal systems are formidable, is important for everyone to understand, but particularly HR managers who have the responsibility for international assignees. In the rush to globalize, companies are facing firsthand the issues their expatriates have been confronting for years. HR can be at the front lines, helping to pave the way for a successful overseas assignment, even when overseas means here in the United States.

Companies don’t seem to know what to do with them. Ineffectively recruited, ineffectively retained, they have been confined to the fringes of the organization by employers—or have been unintentionally barred completely. They are older workers, and companies had better sit up and take notice. Their ranks are swelling, and this rapid growth will continue as the oldest of the 76 million baby boomers born between 1946 and 1964 begin hitting their fifth decade. According to the Washington, D.C.-based American Association of Retired Persons (AARP), one in eight Americans is older than 65, and by 2030 that figure will rise to 20%. Already, people older than 55 account for 20% of the U.S. population.

What does all this have to do with you? A lot. This labor force will become absolutely critical to your business in the next few years—for several reasons. First, older people are staying in the work force longer than ever before. Thanks to laws such as the Age Discrimination in Employment Act, people in most professions are no longer forced to retire, and they’re enjoying extensive protection of pension benefits.

Technology is also playing its part. The information revolution is creating jobs that are less physically demanding, so individuals will work longer, and older workers will contribute more to economic growth.

But there’s a second piece of the puzzle that soon will make mature workers indispensable. Because of the baby bust, major labor shortages loom on the horizon. With 76 million boomers and only 56 million baby busters (born between 1965 and 1976) to take their places, companies trying to fill entry-level positions will be searching mightily for viable candidates to fill those slots.

Unfortunately, there are still many barriers to employing mature workers. Today’s workplace isn’t particularly friendly or accessible to older people. They suffer from great earning disparities with younger workers. They’re forced into uncomfortable decisions by rigid scheduling structures. The option—either retirement or full-time work—causes many to shy away from employment. Finally, many myths and prejudices about older workers keep them from the workplace. For instance, a 1989 report by the Bureau of Labor Statistics, “Labor Market Problems of Older Workers,” indicates that many older workers who want to find jobs give up because of age discrimination.

So just because companies will need older workers and this group is eager for employment doesn’t, unfortunately, mean the problem is solved. Organizations that want to successfully employ this segment of the labor force must recognize the particular needs of older workers and create policies to ensure their success.

Recruiting, training, managing and retaining all must be approached with a bit of a twist. Companies that do it right—such as McDonald’s, Home Shopping Network, AT&T, Texas Refinery Corp. and Good Samaritan Hospital—will tell you a little extra effort pays off.

Before you do anything else, dispel the misconceptions.
Older people are constantly being questioned about their ability to stand up in the work force. The older the person, the greater the skepticism. Even a July Time magazine cover story on presidential candidate Bob Dole chose to focus on age: “Is Dole Too Old for the Job?”

“The biggest barriers to the employment of older workers are myths about productivity, safety and costs of employing these workers,” says Catherine D. Fyock, president of Prospect, Kentucky-based Innovative Management Concepts and author of the book, “America’s Work Force is Coming of Age.”

Yet none of these rumors have proven to be substantial. For instance, AARP states that workers between the ages of 50 and 60 stay on the job an average of 15 years, and their attendance is as good or better than other groups. Safety also should be of limited concern, according to the AARP. In most occupations, mature workers have a lower accident rate, with workers 55 and older accounting for 13.6% of the work force but for only 9.7% of on-the-job injuries.

Finally, there’s little proof that older workers cost more to employ. For instance, the belief that older workers cause increased health-care costs—one of the most tenacious myths—has proven to be unfounded by several studies. In particular, one by Yankelovich, Skelly and White Inc. showed that health-care costs between 30-year-old males, women with dependents and 65-year-old retirees are about the same. It also proved that 55-year-olds are the least costly of all groups. And, in a number of surveys, according to Fyock, respondents revealed that even if health-care costs were higher, the advantages of employing mature workers offset any additional cost because of lower absenteeism and turnover.

These concerns aside, there still remains a lingering theory that older Americans either don’t need or don’t want to work. This too is untrue. According to AARP, 3.5 million people aged 55 and older were below the poverty line in 1985—with the rate being higher for those older than 65. That translates into nearly one-fifth of the older population. Indeed, for many older workers, there’s great financial need to gain employment.

Plus, many want to work. They like the idea of dipping a foot back into the labor pool, or even remaining there for the long haul. In a 1981 Louis Harris poll, 79% of those aged 55 to 64 and 73% of those older than 65 said they’d prefer to work part time. In a 1983 AARP survey, 74% said they’d prefer working to retiring. The stance was still strong in a 1988 AARP study, in which 40% to 50% said they’d work past retirement age if they could have flexible schedules, part-time and temporary employment.

So the first step is an important one: Acknowledge and dispel the myths about older workers. Educate yourself and your company. “One main issue is awareness,” says Fyock. “Sometimes it’s just talking about these kinds of things in a discussion group or in a classroom setting. People will suddenly realize that they’ve been operating with these kinds of assumptions or biases or stereotypes. HR people really do need to get educated on the issues of aging and an aging work force.”

Recruiting older workers: Unleash your creativity.
Just as you’d alter your recruiting approach for college students or working mothers, companies must adjust their efforts to attract older employees. Consider what they want (flexible working hours, for instance) and where to find them (older communities, for example).

One company that takes these ideas seriously—to its success—is Clearwater, Florida-based Home Shopping Network (HSN), a cable television company. Calling itself an “electronic retailer” that broadcasts 24 hours a day to more than 70 million American households, the company has tremendous staffing needs for people to answer phones and take orders for merchandise.

“We needed a flexible part-time work force to answer the telephones during the peak periods,” says Mount Burns, a company HR representative. “We’re located in an area where there are many retired folks who need and want a little extra income. We knew they were there, but we didn’t know how they’d get hold of us.”

In 1990, the company established Prime Timer, a program that invites people older than 55 to become part of their work force. It encourages them with policies such as flexible and part-time jobs and by recruiting practices that systematically seek out seniors.

Burns, himself 67 and formerly retired, took on the task of recruiting. First, the local television station ran spots publicizing the company’s needs. Then Burns visited the various community agencies that served older adults, such as the senior-citizen centers at each of the county’s seven or eight cities. Burns contacted each center’s director and developed slide presentations to show people exactly what the job entailed. He worked with the Chamber of Commerce, and he also attended Senior Job Fairs and placed ads in local newspapers. Basically, HSN combed the area for potential applicants.

The company has been successful—both in quantity and in quality. Its first training class, which began on March 21, 1990, had 12 people; today more than 500 individuals have come through the Prime Timer training program. Burns himself moved from a two-day-a-week slot to a full-time human resources position and a role as the Prime Timer coordinator. In addition, according to Burns, the Prime Timers who were hired in 1992 had a 30% lower turnover rate than other hires—and these are individuals who range up to 84 years old.

HSN’s recruiting success is largely a result of its commitment to and understanding of the older population of workers. The company creates policies that address their needs for varied schedules and responsibility, and it recognizes that mature individuals are a very diverse group and require different recruiting techniques.

It’s important to remember that although some recruiting generalizations can be made about older workers, individuals in this group are as varied as any other large segment of the population. They include people who are in mid-life career changes, early retirees, older retirees, displaced workers and people who’ve never worked outside the home before. Each group has its own motivations to work and benefits needs. In addition, each group has its own concerns about Social Security benefits and how those will be affected by employment (see “Part-time Work Protects Social Security Benefits”).

Fyock, who had years of experience developing programs for older workers at Louisville, Kentucky-based Kentucky Fried Chicken, suggests that recruiting messages are extremely important. Mature adults work for several reasons—financial needs, security requirements, social needs and self-esteem. Recruitment messages should not only segment the market, but also speak to those needs. These messages can be presented at a variety of venues such as job fairs, through direct mail or via a hotline.

For instance, Fyock helped develop strategies that located older adults in the course of their daily activities. KFC made presentations at senior centers, at coffee-klatch meetings, at mall-walker groups. The company targeted certain neighborhoods in the community that had pockets of older people.

“Generally, HR people have never targeted older adults,” she says. “In fact, the whole notion of targeting [seniors] may be new and unique. So you want to focus your thinking on how you can reach older adults, what they’re doing, what their daily activities are like and how you can reach out to those individuals. You even can create messages that are appealing to them.”

Oak Brook, Illinois-based McDonald’s Corp. has long been admired for its success in targeting mature individuals. And so it should be. Company founder Ray A. Kroc was 52 when he established the company in 1955. McDonald’s ReHIREment program was formed in the ’80s when the company recognized the employee shortage it was facing. Now ReHIREment entices older individuals to rejoin the work force, or to join it for the first time, as in the case of many homemakers. “We looked at other markets and found that we already had many successful older workers in our restaurants, and we could probably find ways to recruit more,” says Barry Mehrman, employment development consultant for McDonald’s Corp.

But McDonald’s had to overcome some interesting recruiting challenges. For instance, one of the corporation’s unique aspects is that approximately 40% to 50% of its employees are young—in high school and college. Mehrman says that when young managers in their 20s sit down to interview someone old enough to be their parent or grandparent, it may be awkward. To alleviate that problem, the company works with the managers to rehearse scenarios. It also adjusts some of its selection questions. For instance, it isn’t much use to ask a 65-year-old who’s coming out of retirement to work part time what his career goals are or what he wants to do in the future. “We found you really don’t need to approach it like that when you’re interviewing,” says Mehrman. Instead, McDonald’s developed specific recruiting materials to help older candidates talk about how they can share their skills and experience with others; they sell McDonald’s as a career opportunity based on scheduling flexibility and the fact that they help individuals so they don’t jeopardize their Social Security earnings.

To minimize older workers’ fears of moving into the work force, McDonald’s also sets up a buddy system so that each older worker has someone to help acclimate him or her to the way things are done at McDonald’s. Workers can choose one restaurant position that they’re particularly interested in, or they can choose to learn a variety of positions. The company’s approach to recruitment works: Today, more than 40,000 senior employees serve McDonald’s customers worldwide.

Training: Establish adult learning goals.
Regardless of age, training and retraining employees ensures that they remain up to date on new skills and refreshed on old ones. Training older workers isn’t too far a reach from training younger ones. Many companies use this three-pronged strategy:

• Continually training mature workers who’ve remained in the workforce
• Training new hires
• Training supervisors on how to manage older workers.

Continued training is key for workers as they mature on the job. According to AARP, the three common mid-career problems that lower productivity are career burnout, career plateauing and career obsolescence. These can be alleviated substantially by career management and effective training.

The first situation, career burnout, requires early diagnosis and intervention. It can be helped by job redesign or rotation, since burnout is usually associated with high-pressure jobs. Temporary assignments, reassignments as mentors or trainers, stress management training and sabbaticals also can be of use.

Career plateauing can be addressed by assigning employees to projects that use their special skills. For instance, if an individual is skilled at sales but has been doing it for many years, the person could be assigned to a new advertising campaign for the company. This way the employee continues to sharpen his or her skills—but in a new way with a new approach. In addition, alternative career paths, as well as opportunities for training and development, can also thwart career plateauing.

Career obsolescence requires retraining to sharpen existing skills or supply new skills. Other solutions are to encourage employees to take classes to keep up with new developments, join professional organizations and consider career contingency plans. Employers may also consider offering career-planning workshops or starting an information center.

When it comes to training new hires who are older, the process isn’t actually too much different from training new hires who are young. Find out what areas they need to work on, and then jump in. For instance, AARP studies show that many managers view older workers as lacking technological skills. But that didn’t stop HSN from hiring them. The company designed a very specific training program to teach people who’d never used a computer before exactly how to handle the data entry the business required. In addition, the company reminded managers that training older workers shouldn’t be approached too differently than any other training. “We put a lot of supervisory personnel through a [sensitivity] course so they would know how to react to these individuals and how they should be treated—not as school children but as adults,” says Burns.

In general, when training and retraining older workers, remember this: While adult learners have different needs, most older adults thrive in a friendly, supportive learning arena. They need to know why they’re learning something, what they’re learning and how to apply it. Adult learners need to build on past experiences. The challenge is to incorporate all of these aspects into a creative, supportive learning climate.

You can best create this climate by following these five suggestions:

1. Identify employees who need training and help with career development
2. Motivate employees to take advantage of training programs
3. Improve flexibility and capacity of employees to learn new skills
4. Modify training to accommodate employees with special needs
5. Determine cost-effectiveness of training and employee development.

McDonald’s McMasters programs, active in California and Washington, D.C., provide training exclusively for older workers. Candidates are screened through state and local agencies (including the Department of Aging and AARP), and referred to the company for interviews. The program includes coaching by McDonald’s managers, who provide one-on-one training for these candidates for a four-week period. They also receive classroom instruction, operational demonstrations and training in a variety of positions. They learn how to use the restaurant’s computerized cash register system, and how to make salad and cook fries. Orientation for all workers lasts about two hours, and the training focuses on hospitality skills and customer service—two areas that older workers tend to excel at anyway. “From a generational standpoint, people who are in their 60s and 70s are absolutely outstanding when it comes to being friendly and offering quality service,” says Mehrman. At the end of the program, McMasters employees have a graduation ceremony. They’re then integrated into the work force at the restaurant at which they were trained.

But managers must also undergo training if older people are to successfully acclimate to the workplace. McDonald’s recognizes this fact: Like HSN, the company provides sensitivity training to restaurant employees and managers to dispel myths and answer questions about older workers. McMasters managers are encouraged to schedule team-building sessions involving older workers, other restaurant employees and the management team. “We try to create a family feeling in the restaurants, and one of the important aspects of that is respect,” says Mehrman.

McDonald’s managers also are trained to recognize the different management issues regarding mature workers. For example, mature workers tend to have a lot of social needs. For management, this means that supervisors must be trained to look for different goals that older people may have. Mehrman provides an example: “We promote internally. So a lot of young people learn skills and want to move up. That’s different for someone who’s coming back after retirement to work part-time. So, you’re not going to say, ‘Gee, you’re doing a great job, do you want to be a swing manager?'” They may not want that additional responsibility or time frame.

However, managers must also be trained to keep an eye on older workers who want the opportunity. In the Chicago area, for instance, McDonald’s hired a retired international banker who’d worked all over the world. He was originally hired as a regular crew person but then decided that he wanted to become a recruiter. He’s now working full time doing recruiting and building relationships with schools and other organizations.

Managing and retaining seniors: Know what’s important.
Managing and retaining mature people is another facet that requires HR know-how. Fort Worth-based Texas Refinery Corp. is respected for its policies regarding seniors. Indeed, the company’s No. 4 salesperson is 74 years old—and this employee isn’t alone. With a sales force of more than 3,000, the company has held on to 500 members who are 60, 70 and 80.

Company President Jerry Hopkins will tell you the reason the company works so hard to hold on to its older workers is pure business. TR believes that older people are more inclined to be self-starters and interested in establishing long-term relationships with clients. “Their age is immaterial to us,” says Hopkins. “We put a great deal of value on life experience, and we think that in relationships, often an older, more experienced person probably has a distinct advantage.”

Most of these older individuals are hired as independent contractors who receive commissions and benefits based on their sales. Many work demanding full-time schedules—such as Bill Shapiro, a 75-year-old sales representative who has been with the company 31 years. The definition of self-starter, he averages 55 hours a week, drives 100 miles a day and can drive as many as 300 to 400 miles to do business. Shapiro still climbs ladders to do roof inspections of industrial buildings.

Others take advantage of the independent contractor status to work flexible, part-time hours to protect their Social Security. This option is a key provision to Texas Refinery’s retention. According to AARP, one of the most significant factors that stands in the way of employment is that older workers are forced to choose between full-time work and retirement. They express a preference for phased retirement and reduced work schedules.

As Texas Refinery illustrates, flexible work arrangements that can be adjusted by each individual are an important component of retention. Companies can use a variety of flexible options, from job sharing and on-call work, to part-time and phased-in retirement.

But flexible work arrangements are only part of retaining older workers; another is an atmosphere that respects and values seniors. A corporate culture that accepts and encourages aging workers describes Los Angeles-based Good Samaritan Hospital. Take Inez Hamilton, for instance. She may be 76 years old, but you’d never know it by the work she does. As an instrument technician for Good Samaritan Hospital, Hamilton is responsible for the exacting and critical task of cleaning and preparing surgical instrument trays. Day after day, from 2 p.m. to 10 p.m.—and sometimes more—Hamilton cleans and sorts scalpels and scissors, forceps and needles. The great-great-grandmother of four continues to be so skilled that the cardiac surgeon she worked with previously called her out of retirement to work for him again when he changed hospitals.

The hospital’s embracing attitude is one that keeps older workers around. Says Margaret Hambleton, director of compensation and benefits: “Many of the people who work directly with patients tend to stay in the positions much longer. We have many employees who’ve been with us for 35 years, and we appreciate having employees who continue to remind us of our history. We encourage our older workers to stay on with us.”

How does the hospital encourage them? Although the administration is careful not to compromise patient care, it helps to create an environment that accommodates some physical limitations of the older worker. For example, a nurse’s aide will help move a patient or change bedsheets for a mature individual who has trouble with those strenuous activities.

The hospital also keeps a close eye on pay equity for its work force—15% of employees are older than 55; 6% are older than 65. Although the company works with a merit-based pay system, Hambleton says that it’s careful to be sure the pay levels for senior workers keep up with those of the younger staff. At one time, younger workers tended to be “leap-frogged” in and often were put at higher rates. This was especially true with nurses who were in serious demand.

That kind of pay environment no longer exists at the hospital; Hambleton says it now makes a special effort to maintain pay equity. The hospital does an annual performance review and, at the same time, determines that salaries of long-time employees don’t lag behind younger—or newer—workers. While pay is merit-based, Hambleton and the director of human resources go through the entire employee population by hire date, seniority and number of years of experience to ensure that salaries are fair—that individuals don’t fall behind simply because they’re with the organization longer.

Perhaps most importantly, the corporate culture simply values seniors. For example, during the hospital’s cultural-diversity week, it highlights older workers as part of the cultural richness. “We talked about some of the needs of the older worker, and about making use of older workers. [We talked about] their history at the hospital and using them as mentors. It was really an education,” Hambleton says.

The hospital also sponsors a mentoring program that works informally to acknowledge the experience of seniors. “All patient care people require a mentor as they go through their orientation. They go through a period of up to six weeks during which they have a buddy who’s one of the best performers and someone with a lot of knowledge. Often our older workers [act as buddies].”

Just as many younger people have concerns about interviewing people twice their age, so can younger-to-older management raise some concerns. Joan L. Kelly, manager of the Business Partnerships Program at AARP, explains that this is, in fact, a major management hurdle. “Sometimes you find younger managers saying, ‘I feel like I’m supervising my mom or dad,’ and they feel a little remiss to do that. But, we need to remember there’s respect due on both sides. Age has nothing to do with it. It gets back to respecting all employees and being even-handed with your treatment of everyone.”

Says Fyock: “One of the biggest issues is that different aged workers tend to share certain value systems based on the beliefs at the time in which they grew up. Younger workers tend to share a [core of similar] values; older workers do as well.”

One of the big problems with managers is that they sometimes don’t understand differences that are generationally based—yet to effectively manage, they must acknowledge them. Fyock recalls a time at KFC when many managers were so accustomed to the value systems of young people that when older adults entered the work force with different values and different ways of looking at work, they needed to completely rethink how to manage those individuals.

For example, young people almost always responded positively to a participative management style, whereas older adults sometimes found it a little confusing. “First of all, participative management may not have been used throughout their years in the workplace,” says Fyock, “and also they have a very strong ethic of respecting authority. They may even feel that participatory management is almost an abdication of authority.”

Furthermore, she says, older adults generally place a high importance on work. They see it as a duty, a responsibility, an important part of their life. Younger adults may tend to see work as a means to an end. It should be fun, it should be exciting, it should be more than just the work itself. Their views about authority may also be vastly different. “We talk about how young people see authority as a sort of necessary evil, something that must be tolerated, something that also should be questioned and challenged. Older adults tend to see authority as something to be respected and valued.”

When you have differences like these, it’s important that everyone recognize them. Moreover, young managers need to understand the influences and backgrounds of their different employees and understand those biases when attempting to manage them.

Yes—even in retention and management, much of the key to success resides in dispelling prejudices about mature employees. The AARP recommends that age stereotypes can be overcome through education, communication about the problem, participation in task forces to investigate the problem, rewards for managers who fully train and utilize the talents of older individuals and strict enforcement of age discrimination regulations. In situations in which younger people supervise older workers, AARP suggests a frank discussion and open communication between the two. It also suggests that one way in which younger people may overcome problems is to utilize the older employee’s expertise. For instance, if the older person has a background in teaching, the younger person could ask for some input on a company training program.

What’s the bottom line on all this? Brush up on marketing your company to older workers, rethink your current policies and reexamine your beliefs about mature employees—because HR professionals are going to need the skills to work with older people. “In the next 15 to 20 years, one out of every four employees is going to be over the age of 55. It means a whole new workplace for us, with a whole new set of needs. It’s going to be a very big issue,” says Fyock.

So open your doors to these workers. Invite them to the table. You can’t afford to keep them on the fringes any longer.

You may never have stepped inside New York City’s The Pierre hotel, but you certainly know it by reputation. The Grand Dame is quiet opulence. Plush lobby, imposing crystal chandeliers, handpainted ceilings that remind you of the Sistine Chapel in Rome. Its elegant air and dignity create an exquisite setting. But whatever its physical beauty, the Four Seasons’ Pierre is known for its customer service. Housekeepers help you before you even ask. Uniformed elevator operators offer you a smile. And the concierge may call you by name.

Not too far away on the upper East Side is another New York institution—the New York Hospital-Cornell Medical Center. Patients are known to pay hefty sums—nearly $2,000 for a private room—for the center’s excellent health services. But if you were to view a hospital as a hotel for sick people, why couldn’t the hospital’s customer service become just as renown as its medical care? It can, thanks to the vision of Herbert Slotnick, a businessman who channeled a personal tragedy four years ago into a partnership between the two service-oriented institutions. Slotnick recognized that since both rely on frontline employees to satisfy their clients, The Pierre could help perform surgery on the hospital’s customer-service operations.

Collaborations require vision.
The partnership between The Pierre and New York Hospital was born several years ago. People reverently recount the story. In 1991, Slotnick’s wife was dying from cancer at New York Hospital. During her final days, he stayed at The Pierre. Every day he would travel the few miles from Fifth Avenue to the upper East Side to visit his wife. At night, he’d return to The Pierre, where he was greeted by name and served dinner in the Rotunda Room. He’d often listen to soft music to relax. The staff who knew him would inquire about his wife’s condition. And each night Herbert Pliessnig, then the general manager of the hotel, would call to talk with him.

Each day, Slotnick returned to the hospital. Although he found the medical care to be excellent, he noticed the attention to personal service was in stark contrast to his nightly experience at The Pierre. Hospital employees might have been experts at what they did, but their training didn’t seem to have emphasized hospitality.

Slotnick’s experience—both the medical treatment his wife received at the hospital and the personal care he received at the hotel—convinced the businessman to do something significant for the hospital. In addition to a generous donation in his wife’s honor, Slotnick brokered a collaboration between the two institutions to prove one thing: A hospital could provide its patients both high-caliber medical service and the kind of personal attention showered on guests at a first-class hotel like The Pierre.

Slotnick then met Merife Hernandez, a one-woman dynamo who serves on the hospital’s board of governors. Hernandez immediately recognized the brilliance of Slotnick’s insight. She jumped on the idea of a business partnership. Having been hospitalized herself several years before Slotnick’s wife, Hernandez had already felt the need to develop a hospital with a more hotel-like ambience. She started the Environment Committee—a group of decision makers that included the vice presidents, the management team and all of the department chiefs who were tasked with improving the patient’s non-medical experience. Slotnick also introduced Hernandez to Pliessnig. Together they planted the seeds for the alliance.

Strange bedfellows? Not at all. Health care or hostelry—both require sound financial positions. Indeed, from 1988 to 1991, the hospital went from being $57 million in the red to being $2 million in the black. Hernandez immediately saw the bottom-line benefits of taking its customer service even more seriously. She pursued the partnership with the tenacity of a surgeon. “The beauty of the collaboration with The Pierre was its fantastic ideas on customer service and employee relations. How you treat your employees is how they in turn will treat the clients—as patients or guests.” That includes empowering employees by having open-door management policies and by paying attention to employee and guest facilities, she says.

Isadore Sharp, chairman, president and CEO of the Four Seasons Hotels and Resorts, also recognized the prospects of mutual gain. He later told a group of senior executives and physicians at the hospital that health care and hostelry are service industries operating in a highly competitive world that focuses on budgeting, market positioning and cost containment. And frontline personnel must provide excellent customer service.

Granted, there are some differences in size, mission and accountability. For example, The Pierre employs 650 employees. The New York Hospital has more than 7,000 personnel. The former is a for-profit enterprise. The latter is a not-for-profit organization that provides health care for patients from all walks of life, including those who may not have the ability to pay. It also answers to OSHA and other government agencies, unlike the hotel, which operates with a freer hand. Nevertheless, “Both depend on our frontline people to satisfy our customers,” says Sharp. So in order to facilitate the fruitful exchange, the next step was to bring in additional key players from both sides.

The Pierre offers a healthy tray of HR tips.
Shelley Komitor, former director of human resources at The Pierre (now at the Four Seasons New York), remembers when Pliessnig introduced the venture. “I thought it was a great idea,” she says. “We discussed it among our division heads in public relations, rooms, and food and beverages. Then we decided to meet with our [hospital] counterparts.” Komitor initially spoke on the phone with Regina Allen, vice president of human resources for the hospital. Both women agreed to hold a meeting at The Pierre to discuss the respective services. Representing The Pierre were Komitor, the employee relations manager and assistant director of HR. On the hospital side were Allen, the director of recruitment and director of training. “At that meeting, both sides spoke about our areas of expertise and what we do. We did most of the talking because [New York Hospital representatives] wanted to hear what we did,” says Komitor. The discussion covered a lot of ground—including recruitment, training, employee relations and communication.

“The Pierre’s focus on the employees is to do unto others as you would have them do unto you,” says Allen. “So there’s a natural tie between the two institutions in terms of how we regard our employees and our customers. They’ve been focused on customers longer than we have. And we had a lot to learn in that area. We’ve been focused on giving excellent patient care without the added piece that these [patients and visitors] are also our customers.”

Before the four months of exchanges between HR and frontline employees proceeded, the hospital made its own diagnosis. It chose a few areas in which to stop doing business as usual and look at ways to improve its operations by adding a customer focus. Among the initial areas that worked together were the hospital admitting services and The Pierre’s reservations and front desk. It was clear they had the most in common as the first point of contact.

John O’Brien, currently director of admitting at New York Hospital, was one of the individuals involved. “We spent a day with the director of guest relations, looking at the facility and talking to people at different stations—the cashier desk, reservations and check-out counter. As the director of guest relations explained her interaction with other aspects of the hotel, we could see obvious parallels in the basic principles. We are the meeters and the greeters, the first people patients see when they come into the hospital.” Soon after that exchange, hotel housekeepers talked with hospital building-services supervisors. And The Pierre’s executive chef visited the food and nutrition services director at the hospital.

The more O’Brien observed The Pierre’s customer-service program, the more he began to adapt it to the hospital’s needs. “The way [The Pierre] approaches customer-service training was the best I’d seen because it could be very tailored to the task environment,” says O’Brien. “They have specific guidelines [and scripts] about what customer service means in the work people do day to day,” he says. The hotel’s approach, therefore, inspired the hospital to make some specific changes in its admitting and discharging procedures, employee-training program and hiring procedures.

For example, the housekeepers have continuous contact with customers and therefore are considered frontline employees. Previous to the collaboration, the hospital was structured so that after housekeepers finished cleaning a room, they would go to the unit clerk who would contact admitting. If the clerk was busy, it might take hours simply to contact admitting to notify the staff that the room was ready. Now, when the housekeeper finishes cleaning a room, he or she calls admitting directly to say that bed 318A is ready. The open-room notice enters the system immediately, and the next patient quickly is accommodated.

The hospital also streamlined the discharge process and created nurse managers who would be responsible for a wide range of duties on the floor. Frontline employees were taught that they should treat patients as they would want to be treated. For example, housekeepers knock on the door before entering. They introduce themselves by name and ask if it’s a convenient time to clean the room. Escorts who take patients to the operating room introduce themselves, explain what they’re doing and assure the patient that they have all the necessary charts and paperwork with them as they wheel the patient down the corridors.

Instead of a generic customerservice training program, the hospital now has specified training for distinct departments—for admitting representatives, reservations and pre-admitting representatives. For instance, the hospital has a chaplaincy service that reaches out to patients. One question in the admitting process is about religion. In the new customer-service packet for admitting personnel, a recommended script says, “On behalf of the hospital’s chaplaincy service, which is here to meet the needs of our patients, would you like the chaplaincy to assist you in any way?” This takes the edge off the question: “What is your religion?”

Another scripted scenario is how to deal with conflict and angry customers. O’Brien added this section to every training packet because no one knows who will be the first person to encounter an angry patient. The script suggestions might not solve the problem entirely, but they help the employee point the customer in the right direction. Before, the employee would have said, “You’re going to have to talk to my supervisor.” Now, says O’Brien, the employee tries to diffuse the situation and is encouraged to ask, “Can I do something to help you?” If the answer is yes, the employees are empowered to do it. “If it’s beyond their scope, they can figure out who’s the appropriate person and take the patient to that person.”

Customer-service training at the hospital today is a mixture of lecture, question-and-answer sessions and role playing. It involves roughly three one-hour sessions in a group, and an additional individual half-hour with a supervisor who explains the material provided in the department-specific packets. Then, there’s informal follow-up.

In addition, training is on a departmental level. New-hires receive a customer-service training program and packet as well as the general orientation program. This approach has been a factor in the whopping patient-satisfaction ratings for the admitting department. A 1995 patient survey indicates a satisfaction rate of 98%.

Such high ratings are attributable to the hospital’s training from The Pierre, which hires for attitude and conducts several interviews in which managers look for 30-second impact. This means that within 30 seconds, the potential employee must have made a personal connection. Was the applicant smiling, friendly and a people-person? In fact, The Pierre’s owner, the Four Seasons, has been known to interview as many as 50,000 applicants for 400 positions. And typically, it schedules up to five interviews with some individuals.

Of greatest importance is a customer-service orientation. “We’ve strengthened the customer-service aspect since we’ve started the alliance with The Pierre,” says Allen. Because the hospital is heavily regulated, applicants must undergo thorough background checks anyway. But now, telephone reference calls concentrate on a person’s attitude. “We focus on attitude with specific examples—asking how a person would handle a difficult customer or respond when asked to do something that was beyond the scope of one’s job,” says Allen. And although it doesn’t primarily focus on technical skills, the hospital usually does have two interviews in which managers evaluate these skills. Allen explains, “We’re doing more selective hiring as a result.” By placing the right person in the right job, the hospital is taking a more proactive approach toward its customer service.

A win-win partnership.
Although The Pierre provided most of the training, it also benefited from the collaboration. “In every interaction we had, we were learning so much about each other,” says Komitor. “Speaking to peers who basically do the same things, but in such different environments and industries, was eye-opening. Yet, we’re still HR professionals who work with the same concepts,” she says. And as is often the case when you’re teaching someone, you gain a greater awareness of yourself. That was certainly true of the staff at The Pierre. “Seeing how we could help [New York Hospital] brought about a sense of purpose and rededication to the [hotel’s] philosophy,” says Didier LeCalvez, current general manager who also was involved in the training. “When you show people how to do something, you look at your own process.”

What’s more, promises Hernandez, “Once we get up to snuff, there are a lot of things we can actually do for The Pierre.” The hospital is talking about helping the hotel serve spa cuisine with the input of Dr. Richard Rivin, chairman of the department of nutrition. Also, there’s the possibility of working together to provide some health-care services to The Pierre employees. Most significantly, they’re creating a Diagnostic Association, in which both sides work together so that people from everywhere in the world can come to the New York Hospital for a complete health checkup (much as people do at the Rochester, Minnesota-based Mayo Clinic) and spend their evenings at The Pierre. All three ideas would benefit both organizations, which is the essence of a successful alliance.

“Furthermore, you have to know your needs,” says Hernandez. “If you need help with financial processes, you go to an accounting firm. Our big need was for hotel-type services. We knew The Pierre’s reputation.” So, the match has to be excellent in terms of need and expertise. But the most important characteristic of a successful alliance, she says, is that “the people have to be predisposed to the idea. You have to hit it lucky with the personal relationships.”

And where is Slotnick these days? Serving on the New York Hospital’s board of governors’ special committee on hospital environment—creating more legends in the Big Apple.