ORC Sightlines

August 2004

Global Talent Management Study Yields Practical Lessons

Twenty-six European and American multinational companies participated in a survey of global talent management (GTM) practices conducted by ORC Worldwide and sponsored by Industrial Relations Counselors, Inc., a non-profit research organization and ORC’s parent.  Data from the survey is still undergoing statistical analysis, but preliminary results yield some interesting learnings. 

For example, the study found that companies report greater success in identifying high potential senior managers when:

Successful development of high potential managers was associated with:

The comprehensive study also examines processes for predicting talent needs, criteria for selecting high potentials, factors that contribute to a company’s ability to identify and develop talent from smaller, less dominant markets, and metrics used to chart GTM progress. In a briefing for US participants in the study held in New York in June, GTM managers studied the findings and discussed their application to active GTM programs. The attendees expressed interest in forming an ongoing ORC network to share experiences in GTM. A similar meeting will be held for European study participants in early September. 

For more information on the study or plans for the new GTM network, contact Michal Fineman, michal.fineman@orcww.com, in ORC’s New York office, +1-212-719-3400.

Preparing for New UK Information & Consultation Law

A European Union directive requires member states to implement laws requiring companies to inform and consult with employee representatives about certain business decisions. The British Department of Trade and Industry has published revised draft Information & Consultation (I&C) regulations that, once finalized later this year, will go into effect April 5, 2005.  These regulations will establish new employee rights distinct from trade union recognition and bargaining processes already available. 

The regulations provide that employers can choose to negotiate I&C processes with employees before the April effective date. Once the law goes into force, employees themselves may trigger negotiations by gathering written requests from 10 percent of the workforce, or employers may also be proactive at this stage. So the employer has the option of taking no action at all until and if employees request it.  However, if they are wise, companies operating in the UK will have thought through the issues involved well ahead of time to be prepared should negotiations become necessary.

The first question companies must try to answer (with very little help from the regulations, as currently written) is whether they are even covered by the law. The regulations apply to “undertakings” with more than 150 employees. Those with 100-150 employees will be covered in 2007, and those with 50-99 employees will come under the law in 2008. But the definition of “undertaking” may not be refined until it reaches the courts. For now, the regulations simply say that an “undertaking” is a separately incorporated legal entity that has its own shareholders and a unique registration number at Companies House. Although this definition seems to imply that only fully incorporated subsidiaries of foreign companies will be covered, in fact, recently published guidance from the British government suggests that all foreign operations in the UK that meet the size thresholds will be subject to the regulations.

At this stage, ORC’s best guess as to the subjects for which employers under I&C agreements will have to provide information include profit and loss, sales, productivity, structure, divestments, market developments, and strategic plans.  Consultation from employee representatives will have to be accepted before decisions are made on subjects such as working time and practices; training and development; equal opportunity; health, safety, and environment; pension and welfare matters; merger and acquisition plans; employment plans; share transfers; transfer of undertakings; collective redundancies; restructuring; reorganization; data protection; and outsourcing.

Even if your company takes a wait-and-see approach to the new law, the scope of the business decisions that could be affected and the complexity of the strategic considerations that need to be analyzed before negotiations are entered into argue for early attention to a number of issues, such as:

For more information on the draft regulations or to discuss how ORC can help you plan for implementation, contact Fiona Webster at fiona.webster@orcww.com, +44 (0)20 7 591 5609.

National Differences Complicate EU Diversity Efforts

Within Europe, significant differences in history and legal context require that multinational companies take a somewhat flexible approach to diversity management. Members of ORC’s European Equality and Diversity Forum (EEDF) discussed the background and impact of some of these differences at their August meeting.  In particular, they noted the contrast between the United Kingdom and Continental Europe.

In the UK, equality strategy relies heavily on

In contrast, the concept of equality and diversity in Continental Europe has a different history, and comes with a different perspective. 

The principle of equal treatment between men and women is a founding principle of the European Union, and as a result, the gender agenda assumes a very high profile in Europe. Also, while the European Commission has a very strong commitment to eradicating racism and xenophobia in the EU, as evidenced by how quickly it pushed through the new directive prohibiting discrimination on race and ethnic origin, the focus in Continental Europe has been on immigration and third-country nationals rather than on the race agenda.  It is still too early to assess the impact of the Race and Employment directives implemented in 2003, but the EC has expressed concern about lack of consistency in implementation among the member states and indeed has just recently initiated proceedings against Austria, Belgium, Germany, Finland, Greece, and Luxembourg for their failure to fully implement the legislation.

Some EU states (France and Denmark, for example) prohibit gathering data on employees’ race and ethnic origin. Others strongly discourage the practice. This reluctance to use a measurement tool seen in the US and the UK as indispensable for monitoring the effectiveness of diversity efforts lies partly in historical sensitivities around gathering data on race and ethnic origin (race is a highly sensitive public policy issue), and in the need to comply with legislation regulating data collection and personal privacy.

UK and US organizations with Continental operations have struggled with this obstacle for many years. However, as a result of pressure from employers and other equality organizations, the European Commission is exploring possible ways of collecting data related to discrimination and the integration of disadvantaged groups, and is currently consulting with stakeholders on their views.

For more information on diversity in the EU, contact Deirdre Golden, +44-207-591-5600 or deirdre.golden@orcww.com.

ORC Resources:

Tricky Expatriate Remuneration Issues

The Summer 2004 issue of ORC Global Workforce contains helpful advice on some hot expatriate topics such as compensating highly mobile employees to whom the traditional out-and-back assignment model doesn’t apply (“International indices ideal for mobile employees”) and helping expatriates understand why sometimes their pay packets may be skinnier, but their compensation levels actually remain stable (“How to handle negative cost-of-living allowances”).

Mirroring the Global Market in the Executive Suite

In this New York Times interview ORC President and CEO Bob Freedman talks about the efforts multinational companies are making to develop global leaders.

Related Links
Sightlines Archive