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Deputed Workforce: An Overview

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A typical method adopted by companies to meet the talent deficit includes deputing professionals from global centers of MNCs or local IT services companies in countries such as India, China, …

A typical method adopted by companies to meet the talent deficit includes deputing professionals from global centers of MNCs or local IT services companies in countries such as India, China, Philippines, and Brazil. The deputed workforce is staffed on projects for a defined period and usually acts as an interface to employees working at the global/offshore locations. Sourcing talent in this way helps companies to meet critical business requirements.

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  • 1. Deputed Workforce – An Overview Talent Practice Data | Analytics | Technology | Network No part of this report may be quoted, or reproduced for distribution without prior approval from Zinnov LLC.al Zinnov Confidential http://www.zinnov.com info@zinnov.com
  • 2. Introduction In the current business environment where competition has permeated to global markets, access to a talented workforce is a strategic imperative for many MNCs. The search for quality talent has forced many Western corporations to look beyond their geographical boundaries as they realize that not all their business needs can be fulfilled by in-house talent. Hence, talent is being sourced from locations where it makes the most business sense and where it saves the most dollars. In addition, there is a growing shortage of technically trained talent such as engineers and computer scientists in advanced economies. It is essential for businesses to address this critical skill gap in order to retain their technological and scientific competitive advantage. The strategic priority for these businesses is to develop human-capital strategies for sourcing talent globally and build organizations that integrate talent located anywhere in the world more effectively and seamlessly. Technology businesses across the world are incorporating critical skills, in innovation, engineering, and product development functions (including software development) as well as skills in other areas such SI, tech support, as an integral element in their global talent sourcing and corporate growth plans. Workforce deputation – a key business necessity A typical method adopted by companies to meet the talent deficit includes deputing professionals from offshore centers of MNCs or local IT services companies in countries such as India, China, Philippines, and Brazil. The deputed workforce is staffed on projects for a defined period and usually acts as an interface to employees working at the offshore location. Sourcing talent in this way helps companies to meet critical business requirements. Workforce deputation value chain Zinnov undertook a study which focused on mapping the deputation process in some of the leading IT services companies and MNC product & services companies in India. The process is far from standard in the companies studied. However, a few key steps that make the deputation value chain were identified.al Zinnov Confidential http://www.zinnov.com info@zinnov.com
  • 3. A typical process starts by identifying a resource with appropriate skills based on client’s requirement. Once the resource is short listed, most companies follow a pre-deputation process which involves formulating compensation, leaves and insurance policy structure that will be applicable when the resource is deputed at the foreign location. Post this, visa and immigration procedure is initiated and appropriate travel, lodging arrangements are made. Induction and knowledge transition programs ensure a faster on-boarding once the resource reaches the country of deputation. The deputed workforce is provided continued support at the foreign location in the form of per diem processing, timesheet & attendance management, and safety administration. Most companies have adopted a structured off-boarding process to deal with employee retention and readjustment to the home country environment after the completion of the project. The key parameters that companies should evaluate for the deputed workforce across the value chain have been depicted below:al Zinnov Confidential http://www.zinnov.com info@zinnov.com
  • 4. Key issues faced during deputation Most companies have a deputation process in place. However, our study revealed that process inefficiencies run high in the way most companies manage deputation. Some of the key issues revealed during the study have been listed below: Silo mentality Deputation management requires collaboration between various groups such as HR, Finance, and Immigration. Our study revealed that very often these groups work in silos. There is little transparency in the process component owned by each group which resulted in a lot of back and forth communication between various stakeholders. Lack of integrated IT systems In a number of companies studied, technology systems used by various stakeholders worked in isolation with the information flow between systems being largely manual. This made it difficult to track the errors and maintain a fool- proof process. Lack of an integrated system also impacted the standard reports definition and reporting mechanisms. Metrics on current state of deputation i.e., the number of candidates travelling by country and client, visa types, availability for travel, returning dates, etc., were also not easily available. Lack of detailed benchmarks for Compensation & Benefits (C&B)/ statutory requirements for deputed countries The role of C&B team in the deputation process is to define and communicate the compensation structure and terms to the deputed employee. The team is expected to provide information for arriving at the appropriate compensation figure for premium skills, jobs and high performer employee, and also assist in meeting statutory norms in the host country. However, our study revealed that in many cases the C&B team lacked competitive benchmark data and had little understanding of statutory requirements. This data lacuna exposed the company to various risks including tax and minimum wage non-compliance.al Zinnov Confidential http://www.zinnov.com info@zinnov.com
  • 5. Adherence to business timelines is challenging A common issue faced by stakeholders across deputation was that the deputation requests are raised with a very short notice period. This puts various groups under tremendous pressure to meet the process timeline and also increases the chances of errors. Moreover, in some instances the deputation process was not adhered completely to and employees were deputed without even a proper country briefing. Inadequate support provided to employees during deputation Visa and immigration rules in many countries are constantly undergoing change. Therefore, the need for assistance in filing applications was felt by not just first-time applicants but even experienced applicants. Our study revealed that in many companies, there was no single anchor point for employees during the entire cycle of deputation. Moreover, there was no centralized system in place from where the required information could be made accessible to the employees. In some instances, the induction training was either not effectively delivered or was not up-to-date. The resultant impact was that the employee readiness for deputation was low and deserving candidates were denied visas due to inadequate documentation and filing assistance. Impact of an inefficient deputation process An inefficient deputation process can have a multifold impact on the organization. It can be strategic in nature in terms of affecting business reputation, exposing the company to legal risk due to non-compliance etc., or even operational in terms of increasing the cost of deputation, creating execution delays, etc. For instance, multiple visa rejections can tarnish a company’s brand image. In addition, it can also pose a risk to its relationship with various foreign embassies/consulates. The company can opt for re-filling of applications but this can increase the costs significantly. Moreover, expected service levels may not be met if deserving employees are not deputed due to visa rejections. Similarly, lack of competitive C&B package can trigger employee disengagement and affect productivity. It may result in attrition as employee look for other lucrative opportunities. And attrition, as we know, can impact the business top line significantly. To reduce exposure to such risks, companies have tried to streamline processes and put better systems and structures in place to deal with inefficiencies in deputation management.al Zinnov Confidential http://www.zinnov.com info@zinnov.com
  • 6. Industry best practices to overcome deputation challenges Our study on the deputation management process in various IT services companies and MNC centers in India helped us not only identify the challenges but also explore the best practices adopted to address those challenges. Aggregation of those best practices is presented below: Establish a dedicated deputation management team A deputation management team has representatives from HR, Finance, Immigration and Business functions. The team is responsible for managing all aspects of deputation post resource identification. The core responsibilities of the team includes - Govern operations and advisory regarding all cross border movements and compliance issues for the country(ies) of responsibility within their region - Act as a central point of contact and provide support to employees for deputation - Ensure that the deputation process is consistent, transparent and error free - Work closely with stakeholders, Immigration bodies and Govt. agencies to be up-to-date on deputation norms - Gather metrics on the current state of deputation Use an integrated software system to facilitate and manage the deputation function Deputation management can be made more effective with the usage of various software systems that are available today. For instance, packaged ERP tools such as SAP and PeopleSoft provide end-to-end functions to manage payroll, documentation, leaves’ management and communication process during employee deputation. Similarly, customized software tools such as ABACUS, Concur, Rnet provide specific functions for Travel Management, Documentation, Immigration, and Expenses Management. Using a centralized IT tool can help in integrating data from respective applications. Information is centrally updated which allows various stakeholders to have a consistent view of the deputation process. Perform C&B Benchmarking A comprehensive C&B data matrix acquired and maintained for all deputation countries ensures that the salary component of an employee is not only fair but also competitive. This data should include a holistic country and city wise C&B report (minimum wage requirements, per-diem, allowances, and salary) with guidelines on treatment of PF, gratuity, benefits and bonus. The process for acquiring this data involves identifying the most frequently deputed locations and then partnering with country specific C&B service providers to ensure accuracy and comprehensiveness of the data. Additionally, with the help of local attorneys, city-wise C&B trends can be identified with reference to the local employment act to avoid any legal consequences. Use forecasting mechanisms for predictability Deputation requests raised with a short notice period can put tremendous strain on the entire system, process and people involved. In most cases, the nature of business hinders its ability to provide ample notice period before travel.al Zinnov Confidential http://www.zinnov.com info@zinnov.com
  • 7. A resource forecasting mechanism can bring predictability by helping ascertain the future deputation needs of the organization. This will ensure that the deputation process is structured with less room for error/inconsistencies. Enlist external service providers The trend towards outsourcing has increased and more companies assign activities such as immigration, housing, relocation and tax compliance to external providers. Engaging third parties allows companies to focus on the core deputation process, while also bringing in external competency in areas such as niche skills hiring or advice on legal issues. Some companies also use third party services to assist the deputed employee in local tax filing, accommodation on lease, and car hiring facilities. However, it is essential to lay down clear contractual guidelines with defined SLAs to manage costs and ensure process efficiency. Emphasize the role of Learning & Development (L&D) L&D team’s responsibility in deputation is to conduct employee induction and also country specific briefing. Though L&D’s responsibility in the entire deputation process is minimal, yet the role is very important. It should play a strategic role as part of the deputation process rather than acting as a delivery engine of non relevant content. The training content should be up-to-date and competent staff should be enlisted to deliver the same. A combination of training methodologies such as classroom based or computer based training should be provided based on specific business context. Conclusion Workforce deputation enables business in meeting critical requirements in a globally competitive business landscape. However, inefficiencies in deputation management process can expose businesses to various risks. An awareness of the challenges involved and the best practices to address them can ensure that the process is structured, consistent and error free. Additional Information Zinnov has conducted multiple surveys and studies on Deputed Workforce including various models, challenges, best practices, optimal solutions based on geographic needs etc. Please send your requests to info@zinnov.com to schedule a free 1 hour workshop on Deputed Workforce. About Zinnov Founded in 2002, Zinnov – meaning Zeal in Innovation – provides solutions and advisory services in the area of Talent, Global Sourcing and Emerging Markets Expansion to Fortune 1000 and reputed SMB companies. Zinnov’s Talent Neuron product is a web based tool that provides talent, cost, peer group benchmarking and location data. The insights, analytics and data driven intelligence empowers HR, Engineering, IT, Shared Services and Corporate Executives in developing/executing strategic, operational and transformation initiatives. To request a free trial, visit http://zinnov.com/US/index.htmlal Zinnov Confidential http://www.zinnov.com info@zinnov.com

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