Packing your bags for a foreign deputation?

April 28, 2010

For Vikas, the concept of jugaad (improvisation) is like second nature. The company, in which he is the HR Head, had recently acquired a company in South Africa.

This was the first overseas acquisition the company had done and the success of the new subsidiary was extremely critical to the group’s overall success. The CEO therefore had decided to post some of their top level executives to the new subsidiary.

Vikas was keen that these executives land in South Africa without delay, assuring them that the company will “take proper care of them”.

When he told me about this, I asked him a few pointed questions that set him thinking. Some of the questions I asked Vikas were:

What visas are these executives travelling on?

The executives had business visas that they used for the frequent business trips they made to the country.

However, they were now going to South Africa not as business visitors but as employees of a South African company.

With that status, they needed work permits, more specifically the intra-company transfer work permits.

If they travelled on the wrong visa, they could face severe penalties including deportation. Vikas quickly made a note to speak to his contacts in South Africa and organize the documents necessary for the work permit.

What are their compensation terms?

Vikas, in the usual zeal and entrepreneurial approach he is notorious for, had worked out a living allowance to be paid to the executives, again assuring them that he would “deal with” other things as and when they cropped up.

I reminded him that the cost of living in South Africa would be very different than India and the Indian salary, simply converted into African Rands, even if topped up with a living allowance may not provide the executives the same lifestyle they had in India.

Moreover, they would incur additional costs in establishing their residence in the new country, buying furniture etc. Since most of them were married and their families were was moving with them, they would also incur other costs like tuition fees for children.

The tax rates in South Africa was much different and Vikas had evidently not worked out the after-tax (take home) pay that each executive would receive and its impact on their personal finances and savings.

I advised Vikas that the timing was right for his company to start developing a separate policy for international assignments. Such a policy would list out various allowances and benefits individuals were entitled to when moving to a foreign location and the administrative mechanisms for implementing the same.

Ideally, the policy should cover all the needs of the individual during the entire life-cycle of his assignment with the objective that the employee be kept “whole” in terms of his standard of living, net pay and savings.

The policy should also provide for medical and life insurance coverage and emergency evacuation in the event of any critical illness, political instability or natural disasters.

Companies who posted employees to countries that had a high crime rate even had policies to cover kidnappings and provision of personal security guards.

Vikas, who was listening patiently as I listed out some of the key ingredients of an ideal assignment policy, voiced his concern that all these “frills” would make these assignments hugely expensive, “spoil” his executives and become a drag on the company’s bottom-line.

Vikas was right. Medium or long term overseas assignments i.e. assignments of durations of two years or more, are very costly, often costing 2-3 times the assignees normal salary costs.

That is why, in the current environment of economic slowdown, companies have been reducing the number of long term assignments, substituting them with local talent or short term business trips.

They have also become very picky on who they send on overseas assignments so that they derive the best results out of such moves.

At the same time, with proper planning and professional advice, it is still possible to reduce assignment costs by taking all tax and social security benefits that were available under the foreign country’s laws and structuring the compensation in an effective manner.

Providing an “all inclusive” lump-sum allowance instead of an itemized list of expense reimbursements and benefits, though easier to administer, generally led to higher tax and social security costs.

Vikas was weary by now but it was clear that the he had got the message. He asked me if there were any other things that he should be mindful of, clearly not expecting that I would add a few more.

“Yes there are”, I said gleefully but before I could elaborate on some of the other wonderful stuff in my repertoire like employment laws, minimum wages, severance etc., he had picked up his bag and left, excusing himself and promising to meet me again soon.

By: Amitabh Singh, Tax partner, Ernst & Young India.

Article courtesy of Economic Times.

Advertisements

Saudi is top destination for expatriate jobs in Gulf

April 20, 2010

Expatriates are more likely to secure a new job in Saudi Arabia than in any other country in the Gulf Cooperation Council (GCC) countries, a survey has found.

According to the latest data revealed by GulfTalent.com, the number of expats employed in the kingdom rose by 2.4 per cent in the fourth quarter of 2009.

Qatar and Oman also saw increases over the same period while Bahrain, the UAE and Kuwait saw a drop in the number of expatriate employees, with declines of 7.7 per cent, 4.2 per cent and 2.8 per cent respectively.

The company compiled the results, based on actual staff recruitment, after speaking to 11,000 managers across the region.

“Interviews with hiring managers found that the increased demand for staff in Saudi Arabia and Qatar was being satisfied by a combination of new recruitment, as well as staff relocations within the region, with companies moving large numbers of their employees from slower markets such as the UAE,” the company said in a statement.

The region’s logistics jobs increased by 3 per cent, while retail employment saw a rise of 2.6 per cent, the firm said.

However, positions in real estate and the oil and gas industry saw declines of 7.8 per cent and 4.7 per cent respectively.

The research found that among GCC’s expat workers, Western nationals were most likely to return home if they lost their jobs, with 55 per cent doing so, compared to 37 per cent of Asians and 18 per cent of Arabs.

Qatar had the highest number of expats leaving the country to return home at 54 per cent, in part due to its strict sponsorship laws, the statement said.

The UAE had the highest proportion of unemployed expats choosing to remain in the country to look for new employment.

This reflected “both the challenging employment environment as well as the popularity of the country with expatriates,” the statement said.

Article courtesy of Economic Times.


Workforce in India high on Job Switch – TJ Insite

April 15, 2010

March 31, 2010: Over 40% of India’s workforce will quit their current jobs within the next six months. A reviving economy also brings with it immense expectations from appraisals this year. Employees are already mentally prepared to move out of their organisations, industry and even plan to switch functional areas for better job prospects.

Carrying forward the disillusionment of 2009

The disillusionment of 2009 for Corporate India is now being articulated by employees across the board. Over 40 % of the over 20,000 employees’ surveyed plan to quit their current jobs within the next six months.

ATT00092

According to a survey conducted by TJ Insite, the knowledge and research wing of TimesJobs.com, India’s leading job portal, employees across age & experience groups are planning to switch jobs, either within their own industry or even outside for better job prospects.

“For HR managers, this is an important point to be flagged” remarked Mr. Vivek Madhukar, VP, TimesJobs.com “You must be ready to loose your good workers not only to competitors within your industry but just about anybody in the jobs market.”

The survey also reveals that almost 50% of the workforce does not see significant salary hikes within their current organisation. Most also do not see salary hikes within their current industry, even employees with upto 20 years of industry experience.

These findings came after surveying over 20,000 employees from across the country in various organisations, functional areas and industries.

Tough Road of Attrition Ahead

Freshers and mid level managers, who were most affected by the market downturn of 2009, have no qualms about moving out of their present industry for better job profiles and salaries. Workforces in Bangalore, Chennai, Hyderabad and Mumbai especially, were found to be looking at job switches outside their current industry.

Almost 60 per cent of the workforce currently employed with Manufacturing, Automobiles, Business Process Outsourcing (BPO) and call centres is planning to change to jobs outside their industry. However, those employed with Construction, Information Technology (IT) Software were looking for job shifts within their own industry.

Besides switching across industries, the Indian workforce is also looking at changing their job specialisations or functional areas. About 60 per cent of those considering a job switch also indicated seeking a change in their specialised functional areas.

The top Aspirational specialisations that jobseekers in India are looking at include:

Production and Manufacturing

Accounting, Engineering

Administration

IT/Telecom – Software

Banking, Financial Services and Insurance (BFSI)

Supply Chain Management

Human Resource and Training

Salary – driving the jobs market

Salary levels and job security are major concerns for the workforce today.

Salary is the main driver pushing a majority of the workforce to look for new job opportunities. However, once they decide to move, the main consideration is the new job profile that they are moving to.

“Apparently, the economic slowdown and the upheaval in the jobs market have taught jobseekers some tough lessons” added Mr. Vivek Madhukar, “Earn as much as you can today, but if you are looking at a long professional working life, look for those job profiles that remain in business during tough work cycles- seems to be the mindset.”

ATT00095

Retaining star performers and sales teams is going to be a big challenge for HR managers this year with most jobseekers indicating they want a change of industry as well as functional area.

In fact, Sales do not feature in the top 10 functional areas of choice any more, with 95% of the workforce surveyed giving it the thumbs down. Market-related variable incentives are giving way to a more reliable structured salary hike.

***

About TJ Insite –

TJ Insite is the knowledge and research wing of TimesJobs.com, India’s leading job portal, owned by Times Business Solutions Limited.

It conducts regular research on recruitment trends, compensatory valuations, jobseeker & recruiter expectations. These will be analysed into structured research reports, customised content and reports for industry and the HR fraternity.

TJ Insite will be offering the following services:

1. Content & Editorial: generate structured content related to recruitment & compensation for newspapers, magazines and the interactive media.

2. Market Reports: Detailed well-analysed market reports to service industry and HR.

3. Customised Reports: Structured data collected on prescribed formats and structured into specialised market reports.

4. Knowledge Events: Creating spaces for the industry to interface with jobseekers, policy makers and the HR fraternity.

TJ Insite generates data, analyses and insights that can service the requirements of HR professionals, administrators, researchers, corporate HR, financial planners, and most importantly the common jobseeker.

Research provided by TJ Insite will cover the pan-India region.

For more information contact us at research@timesjobs.com or contact Renu Arya, Research Coordinator at 97170 95249.


Institutes hire IT professionals to train faculty

April 7, 2010

Ranchoddas Shyamaldas Chanchad’s dream may well have come true. The protagonist in 3 Idiots attracted his teachers’ displeasure when he tried to make their methods more student-friendly, but off the screen, things are a lot better. Teachers in engineering colleges across the country are more than happy to have information technology professionals teach them a thing or two.

As part of this collaborative effort, complex subjects like cryptography are being taught in many colleges through treasure hunts. Snakes and ladders are being used to teach the applications of low and high pass filters, and word games demonstrate the working of reaction turbines.

Institutes like IIT Powai, Jawaharlal Nehru Technical University, Andhra Pradesh, Visves-waraiah Technological University, Belgaum, Anna University in Tamil Nadu and ITS Ghaziabad are some of those partnering with companies like Wipro to have their faculty trained.

“Students were often not serious in classrooms, but with the adoption of new teaching methods, we have seen considerable interest. Students also tend to retain a topic much longer,” says Abhay Bansal, professor of computer science at IPS Ghaziabad.

Bansal is a faculty member involved in a training programme called Mission10X, launched by software service company Wipro, which aims to train almost 10,000 teachers this year.

“About 3,000 innovative methods of teaching are up on our website,” says Nagarjuna Sadineni, general manager, talent transformation, Wipro Technologies.

Under the programme, Wipro captures a teacher’s training session on camera and assigns mentors to introduce innovation to teaching methods.

Besides Wipro, the world’s largest chip design company, Synopsys, has also unveiled a section called SEER Akademi to train teachers. “The demand for electrical and electronics engineers in India is estimated to reach five lakh by 2015. Our initiative aims to fill the supply gap,” says Srikanth Jadcherla, CEO of SEER Akademi.

The company has reworked the microelectronics curriculum of colleges like Bhubaneswar Institute of Technology, Chitkara University (Punjab) and North East Technical Education Society in Assam, JNTU and VTU.

TCS has launched an Academic Interface Programme, and says it engaged with over 375 institutes in FY09. “Faculty development workshops & sabbaticals enable academia to understand industry better, adapt and align teaching curriculum and methodologies,” says a spokesperson.

Some of the lesser-known institutes are finding such training particularly useful in raising confidence levels in students. Colleges like the Meerut Institute of Engineering and Arya Institute of Engineering and Technology at Jaipur have adopted such programmes.

“Top IT companies demand soft skills at placement sessions, and such training programmes help us build these in students,” says a teacher at a Meerut-based institute.

Article courtesy of Economic Times.


Thousands of jobs await Indians in Gulf

April 5, 2010
The Gulf is on the verge of a boom and there will be thousands of jobs for skilled Indians, especially in the petrochemical sector, says Ravi Pillai, managing director of the Saudi Arabia-based Nasser S. Al-Hajri Corporation.
Billions of dollars are being invested in major projects in the Gulf, particularly in Saudi Arabia and the UAE emirate of Abu Dhabi, and nearly 300,000 new jobs will be created in the next five years, said Pillai, who hails from Kollam district of Kerala.
“The Gulf is on the brink of another boom,” Pillai told IANS in an interview here, citing new projects that include two $12 billion Jubail Export Refinery and Yanbu Export Refinery projects in Saudi Arabia and Abu Dhabi’s new refinery and nuclear power projects.
“Skilled workers from India will get maximum opportunity to work in these projects. I hope among the total workforce more than 60 percent will be Indians,” said Pillai, whose company has a 35,000-strong Indian workforce, making it one of the largest employers of Indians in the Gulf.
He was in the capital to receive the Padma Shri award conferred on him by the president of India in the trade and industry category.
Pillai’s company is engaged in construction at oil and gas refineries in Saudi Arabia, Qatar, Kuwait and Bahrain.
“Among our management and engineering personnel are Americans, British, Italians, South Africans, Koreans, Filipinos, and of course, Indians,” he said.
“We are also equipped with the services of highly skilled and well experienced supervisory staff.”
According to Pillai, the real estate sector in Dubai is also changing, for the better.
“Only Dubai’s real estate sector was affected by the recession. Now, there are signs of positive change. The Gulf will remain a dream destination for Indians,” Pillai said.
Pillai, who is also head of the R.P. Group of Industries, says it is planning to invest Rs.500 crore in India’s power sector.
“My R.P. Group is interested in investing in India’s power sector. I have a Rs.500-crore plan for this.”
“I have already invested Rs.150 crore to set up a five-star hotel near the scenic Ashtamudi lake (in Kollam). The nature-friendly hotel-cum-resort is surrounded by beautiful backwaters,” he said.
Pillai, a Pravasi Bharatiya Samman winner, is also engaged in charities. He has set up the Upasana Hospital and Research Centre in Kollam to give free treatment to the poor.
He is also planning to hold community marriages in Kerala.
Article courtesy of Economic Times.