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The Quest to Globalize HR
On the path to a 'one world' human resources corporate policy, DuPont tests the merits of global services delivery
Fitzgerald Michael
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DuPont looks like the quintessential multinational company. Founded in the U.S.A. by a Frenchman back in 1802, it now employs people in 70 countries. More than half of its 60,000 workers are based outside the U.S.A. Yet, even a firm like DuPont finds that its human-resources efforts smack of the provincial.

“Over 200 years we’ve grown up with common values and a common business strategy but there wasn’t a lot of global integration,” says James C. Borel, SVP, Human Resources, DuPont, formally E.I. du Pont de Nemours and Co. “We want to be more one DuPont,” he says.

The quest to globalize HR is taking on urgency for companies with a large multinational footprint such as DuPont, IBM and Dell. These companies realize that legacy HR policies designed to support a U.S.-centric corporate culture may undermine the potential of a globally distributed workforce. But architecting the right global HR strategy — from talent management to benefits and corporate culture — poses a particular challenge for HR executives, nearly all of whom are new to global services delivery.

Chemistry Lessons

Lessons on how to make HR outsourcing
stick, gleaned from the makers of Teflon:
     
8   Almost every HR process has a piece that can be outsourced
     
8   Almost every HR process has a piece you shouldn’t outsource
     
8   Technology now makes it easier for firms to standardize HR systems and practices
     
8   Expect to invest time, money and staff to get HRO right
     
8   Cost savings shouldn’t be your sole HRO driver.

“Virtually every major firm is taking steps to globalize HR management,” says Richard Polak, President, IBIS Inc., an HR consultancy based in Los Angeles. Polak says he’s seen more change in HR management in the last five years than in the previous 25. Firms even swap out “international” for “global” in HR titles, because international means “outside the U.S.A.,” while global encompasses the world. He expects the next five years to show rapid change.

While corporations have long outsourced transactional or administrative HR functions, such as payroll or benefits communications, the stakes are considerably higher for companies seeking to build a global HR platform that re-defines both policies and technology.

Not surprisingly, most companies going global are turning to third parties for strategic or tactical assistance. In fact, more than half of the 70 major Human-resource Outsourcing (HRO) deals currently in effect involve an offshore component, according to a recent report by the Everest Research Institute.

For most of DuPont’s existence, each major country ran its own “relationship team,” local HR teams that delivered services in-country. Some of the functions were run internally, and some were outsourced, depending on which practice best met local needs. This was not an effective way to transfer best practices among units or to streamline operations. It certainly did little to help globalize DuPont’s corporate culture.

That’s changing now. In November 2005, DuPont announced a 13-year, $1.1 billion outsourcing deal with Convergys (with support from Deloitte Consulting), which will see the Cincinnati-based services provider take over all of DuPont’s transactional HR functions for its employees and 102,000 retirees. The pact describes a sweeping change involving more than a dozen functions, including:

     
  Organizational development
  Employee development
  Workforce planning and deployment
  Compensation management
  Benefits administration
  Payroll
  Integrated health services
  Recruiting
  Employee and labor relations
  HR and support administration
  Employee-data management
  Work-environment support
  Performance management
  HR-consultative services.

What DuPont will keep in-house: All HR policy setting and strategy work. It will also retain what it calls relationship teams that support organizational managers. The company will have strategic HR people working on governance, and will maintain a team of people to oversee the Convergys relationship.

If working with a third-party service provider proves to speed the rollout of well-managed globalized HR policies and platforms, the closely watched DuPont-Convergys HRO relationship could be the shape of similar deals to come.

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