ORC Sightlines

October 2008

In this issue:

Employment Brands for R&D

In the same way that they have branded their products or services in the marketplace, many companies have undertaken to establish a clear and compelling brand for themselves in the talent market. Leading employers of R&D talent are going a step further. Recognizing that scientists and engineers often base their decisions about where to work on different criteria than other workers do, a number of organizations have begun to articulate specific R&D employment brands.

To be effective, employment brands should be tied to the organization’s overall market branding and should capture what is distinctive about the company, the work, and the work environment. A brand directed at any subset of the talent market—whether scientists and engineers or some other identified segment—should be consistent with the company’s overall employment brand but should also demonstrate how the targeted population’s needs and desires will be met.

Some employers fear that tailored employment brands will dilute the impact of the corporate message. Others, however, have gone even further and developed separate but related brands for subunits within R&D or for specific populations such as female or minority engineers.

Members of ORC’s Human Resources in R&D discussed their R&D branding efforts during their semiannual meeting in October. (Appropriately, the meeting was hosted by Qualcomm, which has enjoyed a spot on Fortune’s 100 best employers list for each of the last several years.) The brand concepts of most of these organizations share in common an appeal to scientists’ passion for the work and desire to contribute to the good of the world, but each is also striving to address the special challenges it faces when selling itself to employees and prospective employees. Some may have to overcome public perception of their company or industry that is less than flattering; others may be hampered by a less competitive pay scale or unpopular geographic location. In any case, brand strategy must take cognizance of both the positives and the negatives in the value equation. And the most important principle of employment brand strategy is to make very sure that the brand’s claims are generally recognized as true. Nothing could be worse for the employer’s image and, ultimately, its relationship with its workforce, than to be unable to deliver on promises, explicit or otherwise, to prospective employees.

ORC’s Human Resources in R&D Network is a community of practice for HR leaders serving the R&D function in large companies and government laboratories. Meetings are held twice a year in the U.S., and between meetings members interact frequently via conference calls, webcasts, e-mail, and the members’ private Web site. For information on how to become involved, contact Michal Fineman, michal.fineman@orcww.com; +1-212-852-0354.

Understanding India: How Cultural Differences Affect the Workplace

India is rich in many resources: iron, copper, coal—and, not least, scientific and technical talent. This is one reason the country continues to attract new investment by science- and engineering-based companies from the West. Companies expanding into India would be wise to study its ways before making HR decisions that might work well in the U.S. or Europe but might not be appropriate in a different culture. In a recent private briefing for a large American company wishing to better understand its Indian operations, ORC’s Executive Vice President Syd Robertson stressed some of the key cultural tendencies of that vast and varied land and their implications for human resources management.

Westerners, for example, tend to be confident in their ability to control their environment and to change it at will, and, despite some resistance to change imposed by others, they tend to expect that change brings progress—things not only become different over time, they get better as well. The Indian view of humans’ relationship to their environment and to time is quite different. Rather than expecting to be able to always shape the future to their wishes, Indians tend to accept that there will be some things that just aren’t susceptible to change. The goal in those situations is to find harmony with those aspects of life that cannot be changed.

In India, harmony in the workplace is a higher good than time management or productivity. As such, the communication style tends to be less direct than those to which Westerners, especially Americans, are accustomed. This requires that managers listen carefully and ask questions until they are quite clear that they understand the message behind the spoken words. The role of the manager in an Indian enterprise also tends to be less activist—more that of a monitor overseeing activities and tracking progress, rather than as a forceful agent of change. There is, nonetheless, a preference for hierarchy and clear structure among Indians, who work well in groups, but like to have roles explicitly defined.

Managing performance in such a culture must be handled carefully. Direct confrontation is not the most effective strategy in a society that values harmony. Also, the ultimate sanction, dismissal, is extremely difficult. Team evaluations rather than individual scorecards, based on objective data and combined with coaching, monitoring and other indirect forms of feedback, work best. However, tremendous change is occurring in the country, and Western performance management systems are being used. It would be important, when trying to install a Western style management system, to move slowly and with great care.

For more information on starting up operations in India or other regions of the world, contact Syd Robertson, sydney.robertson@orcww.com, +1-212-852-0403.

Retirement Benefits for Expatriate Employees

Employees offered assignments overseas are being asked to take a huge gamble. Will they be able to handle the challenge? Will they and their families be happy in the new location? What kind of education will their children get? Can their spouses continue their careers? Will the company have an appropriate position for them when the assignment ends? With so much of the future uncertain, the last thing that should be at risk for any of these employees is their access to government retirement benefits when they need them.

In recent meetings of two of ORC’s Roundtables for international assignment managers, members discussed how multinational employers can structure retirement plans. One complication is that employees working outside of their home country may have to pay into both home- and host-country social programs or risk losing their home-country retirement benefits. ORC Consultant Tricia Danielsen reminded participants of the important role of totalization agreements in safeguarding these government benefits.

Totalization agreements are bilateral arrangements that coordinate contributions into and benefits paid out of government retirement plans in two countries. The main purpose of such agreements is to eliminate dual taxation. Under these agreements, employers have no choice about which system they contribute to. For example, for U.S. employees assigned elsewhere for less than five years, contributions are made to the U.S. social security system. For those individuals on longer-term or indefinite assignments, contributions go to the host system. When employees eventually retire, they collect from the “country of greatest attachment,” that is, the one where they worked the longest.

In the United States, workers are required to be covered under the social security system for at least 40 calendar quarters in order to be eligible to receive minimum benefits. However, as long as an employee has at least six quarters of U.S. coverage, the rules allow time worked in a country with which the U.S. has a totalization agreement to be counted toward eligibility. Much international expansion these days is taking place in regions such as Asia and Africa, where few such agreements have been concluded. In those cases, employees of American organizations must participate in the U.S. social security system but may also be required to pay into the host system, even though they will not be able to collect benefits from the host country.

Rationalizing company benefits and government-mandated social systems for international employees can be an administrative headache, but it is important for employers to make sure these matters are handled smoothly, and the ins and outs are communicated clearly to employees. You may want your expatriates to focus on any number of strategic and operational challenges; whether or not their retirement benefits are at risk is not one of them.

For more information on pay and benefits for international assignees, or to learn about ORC’s Roundtables for international assignment managers, contact Tricia Danielsen, +1-212-852-0438.

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