ORC Sightlines

March 2005

Transitioning to Shared Services

Moving to a shared service structure for the delivery of transactional HR services involves more than reallocating resources and redesigning processes, as several business unit HR leaders attested at the Human Resources Solutions Network (HRSN) meeting earlier this month. A particularly difficult struggle, they agreed, has been getting HR generalists to give up providing services now in the domain of the new centralized organization.

The HR professionals feel an obligation to the employees in their units and often believe that a call center doesn’t give the same level of service employees are accustomed to. In response, they may develop “shadow organizations” that unofficially duplicate the shared service’s responsibilities and drain the strategic and economic benefits for which the new organizational model was implemented in the first place.

HRSN members shared a number of strategies for overcoming resistance from both the HR community and the employee population and for preventing the development of “shadow organizations” in the local HR function. One is to simply cut the generalists off completely by blocking their access to information and systems and forcing employees to go to the call center or online self-service site. Most companies, however, have taken a more proactive approach by:

HRSN is a network of senior Fortune 500 executives who lead the HR function at the divisional or business unit level. The second of the group’s three annual meetings will be June 9. For more information, contact Michal Fineman, michal.fineman@orcww.com, 212-852-0354.

Labor Relations in China*

Most multinationals in China enjoy peaceful industrial relations; however, there has been pressure on employers recently to expand union representation. In October 2004, the All-China Federation of Trade Unions (ACFTU) threatened legal action against a number of foreign-invested firms—including Wal-Mart, Eastman Kodak, Dell, Kentucky Fried Chicken, and Samsung—for not having established a union in their Chinese operations. Wal-Mart and Kodak subsequently announced that they would permit unions to form if that is the will of the workers.

While unions in China are empowered to bargain for their members, they have not traditionally been strong employee advocates. Indeed, the union representatives have often played more of a policing role than an advocacy one, and workers do not necessarily seek them out for help.

Strikes in China are illegal, although work stoppages and slowdowns do occur. The union must be consulted about disciplinary action or dismissal of workers, and it can object and consult the board of directors or demand arbitration in the courts. Union representatives have the right to attend board of director meetings as non-voting members and to present the “opinions and demands” of workers.

The labor environment in China is complicated because every locality has its own legislation that can broaden the rights and duties of unions and reduce management’s prerogative. Laws of different jurisdictions often conflict and enforcement is inconsistent. The landscape is further cluttered by the four-tiered structure of labor organizations:

  1. Provincial: Each province has one trade union that coordinates with the ACFTU on labor issues and may discuss general issues with foreign-invested firms.
  2. City: Each city has a trade union that negotiates with foreign companies about job creation and assists enterprise-level unions.
  3. District: Each district in a city has a union which also helps enterprise-level unions and may negotiate directly with the company.
  4. Enterprise: Enterprise-level unions represent workers in disciplinary hearings, collective bargaining, and signing of individual labor contracts. Workers can organize a company-level union if they can get at least 25 employees to sign on. Employers must be careful in how they respond to an organizing campaign. Statements negative to the union, such as “There is no need for trade unions” or “Trade unions are not good for workers,” are prohibited. But the company can counter with statements such as “We are a very open company” or “We encourage direct dialogue with management.”

* This article was adapted from materials delivered to members of ORC’s Pacific Rim Labor and Industrial Relations Advisory Group at its March 15 meeting: Labor Relations in China, a 2005 report by ORC Worldwide, and Understanding Trade Unions in China, a presentation by Morgan Lewis Counselors at Law. Pacific Rim LIRAG provides a forum for labor professionals in US-based companies to share experiences and learn from experts about managing industrial relations in the region. For more information, contact Tom Connors, thomas.connors@orcww.com, 212-852-0352.

ORC Partners with Companies, Governments to Seek Work Permit Changes

The Permits Foundation hosted its first International Dual Careers Conference in London last month to raise awareness of the issues surrounding permit restrictions for expatriate spouses. The conference, at BT Tower in London, brought together representatives from the corporate sector, governments, and others with an interest in international mobility.

Concerns over spouses’ careers are the single most important reason employees turn down overseas assignments, according to a major dual career survey by ORC.

The Permits Foundation was set up three years ago to encourage governments to relax work permit regulations that currently make it difficult for spouses to work in many countries. By supporting local networks seeking improvements in work permit regulations, the Foundation has already been successful in influencing change in France and the US. It continues to promote improvements in Europe, for example, in the Netherlands and Germany. It has also started to develop networks in Asia and is working to raise awareness of this issue worldwide.

More than 30 international companies and organizations worldwide are now working together, through the Permits Foundation, to promote access to employment for the spouses of internationally assigned staff. ORC is a sponsor of the Foundation, and Siobhan Cummins, managing director of ORC Europe, is a member of its board. For more information about the Permits Foundation, please contact her at siobhan.cummins@orcww.com, 44-207-591-5600.

Reprinted from ORC Global Workforce, Spring 2005

ORC Resources: EU Briefing Modules Help Employers Understand European Employment Context

The European Union has a profound impact on workplace rights in many countries. UNICE, the European employers organization, estimates that over 80 different employment-related measures have been promulgated since the 1980s, and that trend looks set to continue with the publication of the EU’s new Social Agenda, which sets out the region’s employment strategy for the next five years.

Recognizing the need for companies to understand these issues from a practical perspective, ORC has developed EU briefing modules that

For further information contact Fiona Webster, fiona.webster@orcww.com, or Deirdre Golden, deirdre.golden@orcww.com, 44-207-591-5600.

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