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Working, and Living, Abroad



Moderator
Jim Gaw
Vice President, Business Development
Atlas International

Presenters
Paul Onitsuka
Global Mobility Director
Flextronics International

Eric Halverson
Senior Manager, Global Mobility
eBay Inc.

Imagine bringing multiple companies into harmony on international relocation policy, all while the number of employees doubles before reorganization reduces the count by 25 percent.

Paul Onitsuka outlined the broad strokes of his two-year tenure as Global Mobility Director with Flextronics International, a $50 billion international conglomerate for electronics manufacturing services with 700+ overseas assignees. He touched on the major challenges and successes in bringing efficiency to the "many fiefdoms" he inherited when he stepped into the position in 2006.

His first challenge: to learn the corporate culture, know who was being served, and understand the programs in use. "I had to weed through all the different deals, learn the program's true size and all its dimensions. Basically, everything was an exception in everyone's package... we had to sort through all those pieces."

Evaluating global service providers, Paul found that sourcing was highly decentralized and needed a revamping. In looking at ways to counter costs, the value of finding indigenous talent (localization) has risen. He admitted to some unpleasant time in the tax compliance school of hard knocks. His team "had no idea" about their many different tax exposures and has had to work through the complexities of settling equalizations. A tax amnesty program in China has provided some relief.

The global mobility team devoted much effort to solving policy discrepancies between companies, especially during the period following acquisitions. The fine-tuning of metrics to evaluate policy effectiveness is ongoing. Among his program's biggest successes, Paul cites a reduction in exceptions and inconsistent packages, the mitigation of tax exposure, and the implementation of cafeteria-style choices for expatriates. "We have three tiers of expats... low, mid, and executive levels, with allowances based on grade."

Senior Manager of Global Mobility Eric Halverson introduced eBay and its affiliated companies, which worldwide employ around 15,000. He noted that eBay is only 10 years old and in earlier days depended largely on the guidance of its relocation company. The current business model relies on a center of excellence in San Jose that works with HR partners around the world.

As the result of "a hiring tear" over the last four years, eBay has seen bigger relocation volumes; it relocated approximately 700 employees during each of the last two years. In 2005, the company's moves shifted from a U.S.-centric to an international focus. Last year, international volume eclipsed domestic moves by approximately 4 to 3.

Among successful relocation efforts, Eric cited:

  • A Global HR Buy-In. The company has in place a human resources team that understands the policies and agrees with processes. They have consolidated about 15 policies into six, and they have been successful at bringing acquired business into the fold while keeping policies consistent.
  • Better Expense Management. To solve the headache of handling tax equalization for employees, the company now makes tax payments through a relocation provider. This has proven a much more efficient way to pay; it offers better tracking and has reduced penalties and interest.
  • Improved Communication. Regular phone conferences with remote HR managers and external stakeholders have been key to building trust and working relationships.
  • Revised Forwarding Procedure. The company has found it best to allocate domestic moves equally among three preferred providers. It recently implemented a similar model for international forwarding using a third-party partner. "Essentially, I don't have to do anything... Avail takes the moves, allocates them evenly to the three forwarders, and does all the reporting to me on a monthly basis."

Eric said the first layoffs in the company's history occurred in early 2009, a result of hiring too many people in 2008. Although hiring is flat for now, Eric expects an increase in 2010. He believes the pressure to reduce and control costs will further the use of direct contracts with household goods movers. Everyone will expect more for less, which adds urgency to work smarter. A growing reliance on RFPs will accompany a sharper focus on value. New, creative pricing models will explore ways to share risks and rewards with providers. As well, Eric expects to see more group moves and greater flexibility in the use of lump-sum payments and in-kind relocation benefits.