Question

The shared service centers of a multinational technology company are concentrated in one country. They provide back-office operational support for the finance and accounting, procurement, and HR functions of the company.

The local talent market for the back-office operations skills is very competitive. To date, the company has been successful in recruiting experienced professionals from its competitors. The main draw has been the generous compensation and benefits package and the general perception of an amiable and cooperative management team. While competitors' workforces have unionized in this country, this company's workforce has remained union-free.
The annual planning process has kicked off. The process requires the global HR and finance teams to recommend the payroll increase budget for each country based on key economic indicators, company performance, affordability, and compensation market survey data. The teams recommend a salary increase budget of 18% for the country with the shared service centers. The country HR director is concerned that the recommended budget is too low and believes that, in order to remain competitive and compensate for inflation, the increase should be 30%. The country director brings her concerns and recommendations to the global VP of HR.
In a discussion with the global VP of finance and the global functional leaders, the global VP of HR learns that the 18% increase budget is a stretch and that going any higher will have a negative bottom-line impact.
The VP of HR has completed the analysis and developed recommendations for resolving the short- and long-term workforce cost issues in this country. Which is the best step that the VP of HR should take at this point in time?

A. Meeting with key stakeholders individually, before the group meeting, to familiarize them with the recommendations and gather support
B. Sharing with the COO the analysis and recommendations to garner support before the rest of the leadership team hears them
C. Having the country HR director review and provide input on the recommendations before presenting them to the rest of the leadership team
D. Implementing the best recommendation immediately before employees hear about the increases and begin the process of unionization

Answer 1

The best step for the VP of HR is to meet with key stakeholders individually to familiarize them with the recommendations and gather support. This approach would help build consensus and address concerns proactively, ensuring a more calculated and strategic presentation to the leadership team.

Step-by-step explanation:

The shared service centers of a multinational technology company are concentrated in one country and are facing challenges in maintaining their competitive edge in the local talent market for back-office operations skills. Considering the competitive local talent market, the generous compensation and benefits package, and the team's concerns about the proposed payroll increase, the best step for the VP of HR at this point would be Option A: meeting with key stakeholders individually, before the group meeting, to familiarize them with the recommendations and gather support. This approach allows the VP of HR to explain the situation thoroughly and address any concerns or opposition before presenting them to the wider leadership team. Additionally, this strategy helps build consensus and lay the groundwork for a more successful presentation of the recommendations.

Given the need to balance the need for a competitive salary increase with the potential negative impact on the company's bottom line, the VP of HR's recommended course of action should also emphasize long-term workforce cost strategies, such as investing in technology or process improvements to increase efficiency, or exploring other locations with lower employment costs. This strategic view aligns with the long-term business goals and helps manage potential workforce unrest or unionization.