Corporate divestitures play an integral role in shaping a company’s business portfolio and ensuring long-term profitability.However time constraints and operational complexities often pose as challenges to the company involved.
Towards the tail-end of 2019, Chenevert Inc announced their divestment from their parent company, Fuelta. Following this decision, Chenevert Inc had one month to move their employees in the US and abroad across more than 20 countries.
Despite being faced with having to mobilise a global workforce of thousands within a month, whilst lacking the resources to facilitate a transition of this magnitude, Chenevert Inc emerged triumphant.
In this article, we outline six key challenges faced by Chenevert Inc and identify the various solutions they adopted to resolve them during the divestment.
My team have limited experience in dealing with international payroll and employment regulations. What can I do?
In the case of Chenevert Inc, they were faced with mobilising over 2000 employees across more than 20 international countries within a month.
During that time, the company had only one payroll manager who was in charge of doing the implementation for all the countries inclusive of the US. Which is where most of the employees are based. The main concern was not being able to have all of this set up in time.
In this scenario, a payroll implementation plan was put into place. A payroll coordinator was assigned to assist Chenevert Inc in some of the following:
Extracting pay elements
Creating data files for ADP
Employee data validation and consolidation
Timesheet creation and management
Harvesting monthly payroll data for ADP feeds
Build and manage PTO accrual trackers
Month 1 payroll support
Triage support for employee queries
Assist with Bank file feeds
How can I efficiently oversee employee relocation across multiple countries during a divestment?
Chenevert Inc did not have an ongoing list of vendor contacts to assist them in dispersing thousands of employees.
From school searches to household goods, accommodation, and visas, they partnered with Airswift and utilised our extensive list of vendors to support the mobilisation of Chenevert Inc’s expat workforce.
An immigration project manager was also brought in to oversee the visa application for Chenevert Inc’s employees. Over the course of six months, a procedure was put in place to assess all their visas and identify if they needed to be re-applied.
For those that did, we managed the re-application process with the immigration companies that Chenevert Incwere partnered with.
How can I maintain compliance with local employment laws?
With plans for it to be one of Chenevert Inc’s larger business hubs, many expat employees were being relocated to Malaysia and would be starting work on day one of the divestment. However, Chenevert Inc’s Malaysian entity was not being set up in time.
Additionally, they still did not have the necessary immigration rights and it would have been a long time till they did, due to the time-consuming nature of the process. This brought up a lot of issues relating to compliance with local regulations.
In order to solve this, Chenevert Inc partnered with an Employer of Record (EOR) who has able to hire their Malaysian expat workforce and second them back to Chenevert Inc.
The EOR also managed to sponsor their visas, issue their work permits and place these employees under their payroll.
How can I consolidate data and manage internal communication?
At the start, Chenevert Inc did not have a system or program set up to help them respond to and manage employee queries surrounding payroll, onboarding, contracts, immigration, benefits, etc.
Couple this with the fact that they would be managing thousands of employees around the globe, various pay dates and more - they needed a program that would help them consolidate their data and disseminate information to their employees in a timely fashion.
To manage this challenge, a triage ticketing system called Semanage was implemented. This allowed employees to submit an email ticket with their queries to one central department (in this case, HR). The setup was built and executed within a week and communicated to all Chenevert Inc employees.
On top of it easing employee communication, it also helped the HR team manage and maintain the queries that were being directed at them. Tickets could be categorised according to progress and closed upon completion.
How can I protect my commuting employees from risk of triggering multiple tax commitments?
Many of Chenevert Inc’s employees were commuters. Meaning that their roles required them to spend large chunks of time in multiple countries apart from their own country of residence. Making them potentially liable for multiple country tax obligations along with their country of residence taxes.
A solution to this is to set up a Global Employment Company (GEC) in a tax-free zone to employ these commuters and run a shadow payroll in either the host country or country of residence.
During this time, Chenevert Inc’s GEC was not set-up and ready to accommodate the incoming of employees who were scheduled to arrive the following month.
Therefore they enlisted Airswift’s GEC to appear as the legal employers of Chenevert Inc’s commuters and help run the shadow payrolls in each of the host countries and countries of residence.
My HR resources don’t have the necessary infrastructure to onboard a workforce of over 2000 people. How can I work around this?
Due to an agreement between Chenevert Inc and Fuelta, Airswift was not permitted to communicate with any of the employees until they were fully transitioned into Chenevert Inc employees.
Because of this, Chenevert Inc had to work around onboarding all of over 2000 employees on their first day. At this point in time, Chenevert Inc did not have sufficient resources to compile the sheer amount of banking data, personal details, immigration data, etc. into their system.
To manage this. Bamboo HRIS software was implemented within two weeks. Not only would this cut down on paperwork and allow employees to digitally self-onboard, but it also meant that Chenevert Inc would be able to use it to perform further HR administrative activities ranging from headcount and salary reports to performance management and time tracking.
Airswift: Experts in global mobility solutions
We appreciate the resource, support and expertise Airswift has provided during the divestment period and beyond.
From the Project Management of development and implementation of US and international payroll, tax calculations of the GEC and IT systems for HR, to immigration support across multiple countries and regions, Airswift’s never ending support and guidance over the past 10 months has translated into a seamless transition for our employees in the US and abroad
- Global Benefits Manager, Chenevert Inc
Keeping up with an evolving global market can be challenging for even the most seasoned professionals. Here at Airswift, we understand that staying up to date on the latest changes in global business policies, tax regulations and technological advances are essential to a business' growth.
This is why our team of dedicated experts are committed to providing excellence with our full-service Global Employment and Mobility Solutions. From Employer of Record services to Global Payroll Outsourcing, we're prepared to assist you as you navigate through an M&A , divestiture or any other format of global expansion. Contact us today to learn more about how we can help you.
* All company names have been changed to protect the privacy of parties involved
This post was written by: Kate Burgr, Global Mobility - Engagement Manager