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Leveraging Web Technology in an International Human Resource Environment by Leann Balbona, KPMG LLP, New York This article is excerpted from Expatriate Adviser, with permission. For the original article, please see, L. Balbona, "Leveraging Web Technology in an International Human Resource Environment," Expatriate Adviser, Autumn 2004. Expatriate Adviser is a quarterly magazine for international human resource professionals worldwide. (The publisher may be contacted at: assunta@expatriateadviser.com). Many companies have made the push towards using more Web technology wherever possible in the workplace. This initiative has flowed over into human resource (HR) functions and even more so into international human resources (IHR). IHR encompasses all the traditional functions of domestic HR, plus all the issues and challenges that come with transferring employees across borders (such employees are typically known as international assignees, expatriates, 'cross-border' or 'globally mobile' employees). Naturally, the Web comes to mind when providing information or services to employees half way around the world, as the Web is 'timeless' and 'borderless'. This article examines the trends in international assignment programs and the "webification" of various IHR functions, largely as they relate to international assignment programs. The article will also touch on concerns and issues arising from the push to greater reliance on Web technology. KPMG LLP's IHR survey will serve as a resource for examining the trends, concerns, and issues. (Please visit http://www.kpmgvirtualihr.com for free access to KPMG LLP's HR surveys.) Terminology used in this article is briefly defined in a Glossary that appears at the end of the article. Current Challenges In today's rapidly changing world, human resources professionals have to ask themselves how much technology should be used when the name of the department is human (not technology) resources! In the days of cost cutting, outsourcing to third parties, and offshoring jobs to low-cost locations, a balance should exist between the human and the technology interactions within an organization. But that balance is not always easy to strike. Demands on IHR: Service to Assignees Many multinational organizations are looking at HR and are deciding whether to build expertise in IHR and invest in technology, or to outsource this function completely. With international assignees or cross-border employees, organizations may find they will have to provide tax, immigration, and relocation assistance. Many times these are functions that an organization may not want to perform in-house. The organization typically performs a business case or cost justification analysis around the "in-source versus outsource" decision on each of the international assignment-related functions required for such employees. Moving Around the World Is Tougher Since September 11, 2001 September 11, 2001, the war in Iraq, and the threat of worldwide terrorism generally have obliged us to live in a different world, where cross-border travel and immigration are not as easy. In some countries, barriers have been erected to obtaining work permits or entry. Keeping abreast of immigration requirements and having up-to-date information on requirements by country, safety and security issues, etc., are critical when making business decisions related to sending employees to work in other countries. Relocation and Other Assignee Needs Relocation, real estate, destination services, cultural and language concerns should also be "top of mind." Relocation plays into the overall cost of a business decision to send an employee on international assignment, along with his or her family, household goods and the like. And once on location, it's important to determine whether the employee understands the culture both in and out of the office. Can the assignee understand the language? Does he or she need help knowing where to live and shop? It may seem simple, but basic employee information and "education" can be critical to the employee's comfort and confidence levels and his or her ability to successfully fulfill the assignment in the host country. Many organizations overlook this basic nexus. Keeping Tabs on Employees and Costs In addition, HR is increasingly becoming more metrics driven. It seems HR is being asked more and more about employee costs (budgeted and actual) and head count for the entire organization or for those employees working in a particular country or division—HR may even get "oddball" questions such as "who has been in Peru in the last five years?" Not every multinational organization has a global HR system in place with this information. Without globally-used technology or universal systems and practices, it is difficult and can be very time consuming to answer such questions. Nonetheless, often management needs this information quickly to make timely and sound business decisions, usually "in real time". When this happens, with HR and IHR under the microscope, organizations may closely examine what value the HR function adds to the organization, and how HR "is or is not" supporting business initiatives. This notches up the pressure for HR to produce the information quickly and accurately. Compliance and Good Corporate Governance Further, with increased scrutiny and rule-making concerning U.S. companies, the business world has become the subject of greater government regulation. The Sarbanes-Oxley Act of 2002 serves as a recent example. The impact of greater scrutiny and regulation is felt throughout the company, including in the HR area. HR faces more internal and external reviews, for instance. Procedures for the segregation of duties (e.g., preparation of HR-related financial transactions separated from the approval process), communications, quality assurance, and compliance are just some of the important areas where HR and IHR must enhance capabilities and effectiveness through appropriate policies, procedures, and systems. KPMG LLP's Survey 2004: Current and Future Trends in IHR Technology In order to find out more about what multinationals are doing to meet specific IHR technology needs, and to better understand users' technology-related concerns, KPMG LLP commissioned a survey of trends related to IHR's use of Web technology. (A summary of these findings was presented at the 2004 Global Society of Human Resources Management Conference in March 2004.) Survey Respondent Demographics The survey was taken by 120 multinational organizations representing a variety of sectors and based in different countries—with international assignee populations ranging from a few employees to over 1,000. Employers were based in the following countries:
Below we highlight some additional demographics of survey respondents.
Objectives of Survey One purpose of the survey was to capture information concerning what multinational organizations are doing to meet specific IHR needs and to better understand what users' technology-related concerns are. The objectives were:
Issues and Challenges for Survey Respondents The major issues the organizations in the survey confront include (in order of importance):
On-the-Ground Interviews In addition to the survey, further information was culled from six organizations, whose key managers were interviewed. In selecting the interviewees, the roles/positions that were of interest included:
In looking at the pool of interviewees, we decided to include a cross-section of European and U.S.-based organizations representing diverse industries, and that had either corporate or partnership ownership structures. Further, we included the vendors (those companies that provide services to the aforementioned organizations, assignees, and assignee families with respect to tax, immigration, and relocation) as part of this mix. We have observed that the vendors, in particular, have made greater use of the Web over the last three to four years. Where Are You on the "Implementation Scale"? In considering the organizations, we looked at where they fell on the "Web Implementation Scale"—a concept developed about five years ago by KPMG LLP's International Executive Services Technology group in the United States.  Stage 1 – Posting policies or documents on the Web (publish and subscribe). This stage of implementation is used in early development by IHR departments to house the latest version of a policy document, or to post commonly used blank forms. Stage 2 – View information via the Web. This stage of implementation is where the user can view data housed in an underlying application (HRIS or Payroll) and can view only—therefore, not change—the information (e.g., personal information such as name, address, family members, pay check detail information, etc.). Stage 3 – View and update information. This stage of implementation allows more interactivity with the user where the user can update personal information (e.g., change home address, make benefits elections); and the update to the underlying system, HRIS or benefits, is immediate. Stage 4 – View and update information with more complex logic. This stage allows, for example, payment requests where there is logic that would disallow expense reimbursements if over "x" amount, or where time and expenses are reported and then flowed through to financial records for billing and revenue recognition. Stage 5 – Life event flowing transactions. This stage is where the user can enter data one time, and it flows to all systems that need it, and alerts are provided for key events. One example is when an employee enters information to the Web site that he or she has a new child. Once entered, the data now flows through to HRIS, Benefits, Payroll, and other systems where benefits are changed to cover the new child; payroll withholding is also automatically updated. After interviewing the multinational organizations and vendors, KPMG LLP found that most companies that employed international assignees or globally mobile employees were generally in Stages 3 or 4 on the implementation scale, whereas a few companies, and mainly the vendors (tax, relocation and immigration), were in Stages 4 or 5. The vendors may be ahead of the companies in development, due to their need for providing services to a global customer base, not only to the employees, but to their families as well. Many of the vendors are coordinating services globally, and it is important that information is updated near- or real-time, as many of the service contracts require availability of information 24 x 7, and information has to be up-to-date. Further, there are instances where the vendor may outsource certain functions, like destination services to a local service provider or immigration to a local law firm, that require access by subcontractor companies of the vendor. This implies that security has to be more robust, to allow the vendor subcontractors to see and update only those employees for whom they are providing services. KPMG LLP's Survey 2004: IHR Technology Implementation Results Of the companies included in the survey, 51 percent of the respondents indicated that they have plans to implement IHR technology in one to five years, while 15 percent have already implemented IHR technology. Interviews Strategic Leaders While interviewing the strategic leaders from each of the six organizations selected, a few common themes emerged in their approaches and the advice they would give to companies just starting to develop Web technology for their international assignment management programs; what we have labeled the "Top Ten Words of Wisdom."
HR/IHR "HR is having to do more with less" these days, and "IHR is more complex" are two common themes that emerged from this user group when interviewed. In some locations, IHR was a well-oiled machine, so to speak. In other words, the duties and functions related to "international" HR were performed regularly, so the people involved were trained, experienced, and up-to-date on issues. But, if the HR person only does IHR on occasion, he or she has to be retrained on what procedures to follow every once in a while. The IHR/HR professionals interviewed also revealed that it is important for an HR function to have standards or policies; although these must also be flexible enough to handle the extenuating employee situation (human side) and intervening circumstances. Therefore, many interviewees said that when designing business rules for Web applications to handle HR policies, they felt the need to allow for flexibility; flexibility to track compensation and benefits for the more complex issues found in IHR, while tracking exceptions to policy, so that trends could be analyzed and shared with team members administering the policy. Access by employee and family is also of concern to HR/IHR. One HR professional interviewed informed an employee who was having trouble accessing a server to "go to a local Internet café with their SecurID and access the server." It worked, and the employee had a café latte while waiting. (Nonetheless, in this situation, it bears reminding that personal and corporate information need to be kept private from prying eyes in such a public setting.) Key Trends in IHR Management Approach The increase in employee self-service and the use of technology are in line with the HR/IHR professionals we interviewed. Having employee self-service and technology in place allows IHR to focus on career development and more strategic HR issues. Employee Interviews Employees on international assignment or those who had relocated recently to a new country tended to use the Web to do research about a location or job prior to applying or taking the position. "Success stories about other employees who had taken assignments were one of the best areas of the site, as well as the ability to search for international positions," indicated one employee from a large multinational organization. After employees had arrived in their host location, they tended to not use the Web sites as much, since they were more focused on acclimating to the new work environment and the new country. Once on international assignment, the employees' families tended to use the Web to check status of shipment of household goods (e.g., whether goods had cleared customs), communicate with extended family and friends in the home country, complete tax information online, and stay abreast of current events. Expense processing online with either the company or vendors was very well received, according to several employees interviewed, as it simplified the process and reduced the 'paper chase'. IT Interviews Historically, early development of Web sites generally inundated and overloaded users with information. Much of the information was at the site, but it was neither easy to find nor well organized. Updating and maintenance was poor. Newer designs of international assignment-related Web sites have tended to follow the life-cycle of the international assignment, or move in the sequential order of the assignment process, from start to finish. In reviewing each surveyed organization's Web site, it was found that there were functions and capabilities with respect to HR and line management: documents, processes, checklists, and hyper-links to other informational and 'procedural' Web sites that could be useful. Upon review, it appears that what is important, information-wise, is providing the user with relevant information, not information-overload. Lessons Learned The interviewees shared some lessons learned from 'early' mistakes and mishaps. Don't forget the "2 click" principle—when developing Web applications or sites, the user should be able to find the information they need in two clicks of the mouse. In addition, the IT group interviewed made no bones about maintenance—they felt that one should never underestimate the level of Web site maintenance required, and should plan for it. For easier maintenance, many organizations are now using MicroWeb or similar technology where super users within IHR/HR can easily maintain their Web sites, Web applications, and determine and manage accessibility. Decreasing the amount of time HR/IHR professionals, and the employees they serve, have to engage IT will decrease costs to HR, and decrease turnaround time on changes to the site or application. Regarding Web site "ownership," IT professionals interviewed stated that although IT helps to build and secure the HR applications and site, they felt that HR needs to take ownership of content, communications, and the training plan. IT professionals interviewed also reported that Web tools with ad hoc reporting capability are readily available, as well as tools to streamline the Web development process. An interesting note: In addition to the above IT interviews, some Web sites that we have reviewed have the ability to translate the site from one language to another, with up to four different languages at one site. This translation ability was typically found at the European-based organizations. Most had not addressed languages used in the Asia Pacific region, however. Future Trends and Considerations From the interviewees, we found that many had common themes and considerations for the future:
*Companies are beginning to realize that family access to information about the international assignment, updates while on assignment, and other relevant information, are very important. The family members (spouses, children), largely, are the ones doing the research on the Web while the assignee is at work. Other Future Trends that May Significantly Impact IHR Programs In KPMG's 2004 IHR Technology Survey, the results highlight trends that will impact IHR programs. It is interesting to note that "centralization versus decentralization" is the highest area of concern. This trend is in line with the current determination by companies of whether to in-source or outsource IHR. IHR is a specialized area of HR and many companies are considering whether or not to build up expertise or outsource the function. In addition, assignment cost containment is an ongoing area of concern as companies look for ways to cut costs, enhance their competitive position, and increase the return to shareholders. International assignments and globally-mobile employees tend to be more expensive than domestic employees. Finally, the areas of program changes and self-service were likely trends for IHR—self-service will be more prevalent as it relates to program changes. Conclusion Balance is crucial when providing HR services and implementing Web technology. The trend toward increasing self-service has to be balanced with the "high touch of HR" and must be based on the organization's culture, resources, and business and employee needs. And for IHR, the HR issues are even more complex. The ability to handle complex situations relating to international assignee selection, preparation and relocation, and acclimation in the host country for the employee and his or her family, require the right information (accurate, timely, and relevant) at your fingertips and pertinent and useful functionality. If HR doesn't have current information on the Web about an employee and the assignment, and the technology's functionality is faulty or deficient, then IHR cannot effectively administer and deliver efficient service and both the assignee and the company suffer. Therefore, careful planning and consultation are crucial to successfully leveraging and deploying Web technology to ensure employee satisfaction and confidence and meeting the demands placed on IHR by clients and company management. Glossary
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