Case Study: UOB Group

As organisations go through mergers and acquisitions, as well as expand into new countries, it is always important to align operations and policies continuously. This has happened more in the past decade, as the changes impacting countries and global economies continue to be more closely linked than ever before.

Every new organisation or country provides new challenges, both in turns of aligning businesses as well as people. As part of this alignment, key organisational policies, such as HR policies, have to be built and rebuilt. Approaches must continue to be refreshed as the environment and dynamics outside of the organisation continue to evolve and change.

Jason Lim, UOB’s international assignment management, rewards and mobility, group HR, says having a robust policy framework – and being able to adapt operationally in execution of these policies – is an advantage for any organisation.

“Global policies that apply across borders, such as international mobility policies, are crafted to be neutral across countries and have to face such challenges, as the policies strive to provide companies with consistent framework to operate in every country,” he says.

UOB operated in 18 countries and has about 24,000 dotted around the globe. In 2011, the company embarked on a global alignment process to establish consistent mobility policies and applications that were competitive and met various requirements throughout all countries, Lim says.

Previously, there were no mobility policies, just different practices in each country.

Aligning mobility

The decision to align policies came from inconsistent applications and feedback from various stakeholders, Lim says.

It was also the right direction for the company to establish a single regional and global platform.

“At a basic level, relocation provisions were re-designed to provide competitive packages and to achieve the overall objective of mobilising workforce,” he says.

“This included a thorough benchmark study with policies and practices of global MNCs, which then lead to the firm developing a comprehensive set of policies, as well as an establishment of a global competence centre located in Singapore.”

These comprehensive policies covered employee mobility from permanent transfers between locations to short-term assignments. Other than the basic relocation provisions to and from the assignee, this included everything from their contract, payroll structures and cost, to on-assignment support provisions such as housing, car, security, tax, allowances, expenses and medical coverage.

As for the global competency centre, Lim says this was aimed to look at the design and application of the policies, including education, governance and implementation of the various provisions of the policies.

“The alignment was aimed to establish a competitive,consistent and common platform for mobility within the countries where UOB operated, in line with its regional and global expansion plans.”

Benchmark studies were also conducted with the assistance of vendors.

“With the comparisons and with a number of feedback sessions with various stakeholders, the major part was then to find a balance between competitive, consistent and applicability and to establish a policy that fits with the structure, culture and strategic direction of the organisation.”

The difficulties with alignment

The biggest difficulties with alignment, generally speaking, are always to do with realigning the local to global approach, as well as cost issues, says Lim.

No matter what organisation you are with, implementing global policies, practices and managing costs are always a key concern for smaller markets, where the perceived benefits of being part of a global organisation does not necessarily equate to the cost of being part of one.

Implementing alignment, beyond global competitive benchmarking and getting stakeholder feedback, is about understanding your strategic direction.

“In determining policies, it’s important to understand the strategic direction of the organisation,” Lim says.

“This will look at whether the organisation’s focus for business should be on overseas or local markets [and whether] it is the right direction to have a single corporate culture across all countries, or have an integrated approach ... for various corporate initiatives.”

Establishing global policies also requires a global rollout – a huge job in itself – which then requires the need for education sessions. This often means visiting and having information sessions with each country’s top management and country HR colleagues to brief them on the strategy and the structure of the policies.

For UOB, this rollout took six months from start to finish and the education sessions involved working groups with internal HR members and information or question and answer sessions with expatriates and senior management.

Additionally, adjustment is often required for country specific practices. For example, locally-hired expatriates may need their local packages adjusted to distinguish the requirements for other relocated staff.

“There is a spin off to global policies on local country norms, which may mean that say, a housing allowance for a local package will need to be adapted to differentiate the provisions for expatriate provisions,” Lim says.

Finally, to effectively establish global processes, monitoring and continuous feedback is also needed.

“We continue to have informal interviews to draw feedback from various stakeholders and this is recorded into suggestions, which is then tabled for discussion with stakeholders,” Lim says.

Results

As well as highlighting any problems needing to be addressed, aligning global mobility often results in positive results for stakeholders and employees, Lim says.

On top of a greater appreciation of transparency, costs will often decrease – however, there is also room for them to increase in some cases.

“For countries operating on lower cost structures, implementing global policies which are benchmarked to global norms – usually with global norms for cost, such as standard relocation allowances – will usually mean a higher cost burden,” he says. “Whereas, countries which operate higher cost structures, implementing global policies and norms may mean a lower cost due to economies of scale.”

One of the positive results of such an alignment is more successful recruitment initiatives due to more competitive packaging. Global alignment often means better relocation support offerings for employees to transfer to another location.

From a cost perspective, it can also eradicate diverse applications, meaning that for relocations, one country can provide shipment while another can provide allowance.

“One business unit will provide airfare for an employee, for example, and another business unit can provide [another aspect]. One does not provide it all,” Lim says.

Global alignment is also more straightforward to follow and allows for more objectivity.

Lesson learned

“Every company and its various group entities are different in dynamics, from structure, culture, demographics and how advanced its operations are,” Lim says.

It goes without saying that any global alignment project takes time and requires the firm support from its stakeholders, but the investment of time for continuous education and communication becomes critical, as successful implementation often comes with more communication and understanding.

Lim said getting buy-in from management for a task such as this requires emphasis on aiming for one single objective.

“It’s not altogether a walk in the park, but policies must be drafted in mind of the single objective of achieving and regional and global organisation, which is consistent with what top management [wants],” he says.

If Lim has learned anything from his own experiences from working in various global organisations with operations in dozens of countries, it is that HR can always spend more time establishing feedback with stakeholders and educating and communicating with them. “For maximum impact, any successful policy implementation requires a substantial amount of time invested in feedback and education. [Depending on] the timeframe provided, it is just my view that more can be done.”

Lim says you must expect that there will be operational alignment issues, which will often be based on differing levels of skills and resources available.

Implementing the centralisation of policy making and governance continues to be fundamental to any large, expanding organisation, as the ability to align and implement changes to an overall strategy is key to the success of policies and the organisation as a whole.

Successful global implementation of policies often times require global vendors, as often expertise of every location is difficult to obtain internally and where there are gaps, Lim says.