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Human Resources

On Foreign Soil

HR lessons on expanding abroad
University Business, October 2012

In 2008, Sunil Khambaswadkar came on board as the assistant vice chancellor of HR at the Abu Dhabi campus of New York University, which now supports 450 students and is growing strong. “It was a great opportunity for HR and me, personally, to be part of the campus right from the beginning, participating in the planning process, being able to determine what would be required from an HR perspective,” he says.

His is just one of many institutions that have opened international campuses, and all must, of course, consider HR practices in decision-making. The Nelson A. Rockefeller Institute of Government, SUNY’s  public policy think tank, tracks this trend. At last count, says Jason E. Lane, director of educational studies and a senior fellow, there were 64 U.S. institutions with 81 branch campuses in 34 countries. And when the American Council on Education conducted its 2011 survey on the internationalization of U.S. campuses, 56 percent of 1,041 institutions surveyed reported that the level of internationalization at their school has been “high” or “moderate” in recent years.

Some institutions, which may have held off on international expansion during the recession, are dusting off their plans. Setting up shop in different countries is a complex process. Is the HR department ready to cross borders? Consider cultural idiosyncrasies. Partnerships. Time-zone challenges. Foreign laws. Not to mention building a compensation and benefits plan to attract job candidates worldwide whose work ethic and styles may not be exactly compatible with their peers.

Take the Lead

Eric Abrahamson, the Hughie E. Milles Professor of Business at Columbia Business School, says one of HR’s challenges is sourcing professors who understand the local culture and fit into an American-style school. The American classroom, for example, has grown to be more interactive. “I grew up in France, where the professor is all knowing. [Students] don’t even ask questions,” he says. 

A good place to start the search process may be within the institution’s own student ranks. More foreign students are obtaining a Ph.D. in the U.S., then returning home, Abrahamson says. These graduates, he feels, will also be accustomed to the American system of “publish or peril,” which is not as fiercely observed in countries such as France.

Then there are taxes to consider, adds Bob Lammey, senior director of higher education at High Street Partners in Boston, which specializes in helping higher ed institutions establish learning programs abroad. He points to tax equalizing, or ensuring that U.S. employees who move to a country with a higher tax rate still take home the same amount of pay.

Next is recruitment. Will local recruiting firms apply the same ethical and moral standards used in the U.S.? In some countries, such as Nigeria, nepotism runs rampant, says Lammey, recalling several clients who discovered a recruiting firm in Nigeria had hired family members and friends who were not qualified for their jobs. That’s why very specific hiring policies and processes must be developed. Requiring job descriptions or key hires to be approved by HR in the U.S. is one idea.

Still, among the biggest issues he sees is hiring independent contractors who really qualify as employees. When a school opens a new campus overseas, Lammey says, it’s tempting to hire people as independent contractors before the school’s administrative infrastructure is fully in place. However, independent contractors have sued some of his clients. Not only were they awarded six- to seven-figure settlements, but the government also sought damages from the university. He advises being very proactive as the planning process is happening to ensure HR issues and needs are addressed upfront. “[HR] usually arrives late to the party. … Don’t wait for the invitation. Don’t wait for issues to start happening.”

First-Hand Experiences

No doubt, there are many lessons to be learned when establishing an overseas campus. Consider the experiences of the following institutions that have achieved some success in the global market.

  • New York University’s Abu Dhabi campus

Khambaswadkar recalls the numerous tasks his department was involved with early on: registering the school with the Ministry of Labor and Immigration
departments so it could employ faculty and staff; blending existing HR practices from the main campus with local expectations, and designing a compensation plan with special expat benefits such as housing and home travel allowances.

But by far, he shares, the biggest challenge was global recruitment for the campus, which now has about 350 employees from roughly 100 different nationalities. “Getting the caliber of faculty and administrators who were willing to relocate to Abu Dhabi was one of the top challenges,” he says. Only a small number of U.S. administrators relocated. The university’s faculty in New York used their own networks to help HR recruit faculty, and HR hired a global search firm, placed ads in related trade magazines, and relied heavily on social media, particularly LinkedIn.

HR also arranged site visits to the campus, handled immigration formalities, and developed cultural awareness orientation programs. “To get [employees] who are willing to move—sometimes continents away—to an entirely new place and be willing to live there, is a huge challenge,” says Khambaswadkar.

  • George Mason University’s Ras Al Khaimah (UAE) campus

While the struggling economy forced the Virginia-based university to close this branch campus four years after it opened in 2005, there are still HR stories to be told—and its international activity isn’t over. Peter Stearns, provost and executive vice president of academic affairs, says HR’s recruitment challenges were minimal, mainly because people were hired by an educational foundation established by the UAE, so they weren’t Mason employees. “But getting them actually to interact constructively with the admissions school here proved to be a difficult process.”

As did developing work standards. “Getting people of different cultures to agree on what appropriate work standards would be was a really interesting challenge, a far greater challenge than I would have anticipated,” he says.

For example, several staff who were from India, proposed a faculty time clock. That idea and degree of accountability didn’t sit well with employees from the U.S. and Middle East.

The university is using those lessons to repeat the process, this time in South Korea. It has formed a partnership with Incheon Free Economic Zone (IFEZ), which, along with the national government, will subsidize a campus expected to open next fall that will offer economics management and global affairs programs.
Although a corporation set up by

Mason will recruit and employ people, Stearns explains, the university’s HR staff will still solicit their support about cultural norms, personnel management practices, and expectations regarding job perks.

“Coordination issues are very real and, ideally, you need to be able to send [HR] over on visits and bring [HR] staff from there over [here],” he says. “We did a little bit of that with the Ras Al Khaimah campus. People simply got to know each other and had an opportunity to coordinate expectations. It was very effective.”

  • Duke University’s National University of Singapore

Less than 20 Duke employees work at this medical school, established five years ago. Since then, the university has added subsidiaries in Kenya and Ecuador and is expanding its footprint into China (offering graduate degrees in global health) and Rwanda (delivering clinical-based training at an existing university), explains Kyle Cavanaugh, vice president of administration. Officials formed a tri-partnership in China with Wuhan University and the city of Kushan, where the campus will be located. People will either be employed by the joint venture or under contract to deliver security or other services.

That partnership will also prevent Duke from getting entangled in China’s changing labor laws. “Expats working in China for more than 90 days will be exposed to certain social taxes, so keeping up with the changing employment regulations in China is a daunting task,” he says. Take maternity leave, for example. A tax allows women on leave to get a portion of their salary. “We’re working through how we’re going to adjust for that from a total compensation standpoint,” he adds.

One problem shared by China and Rwanda is health care, especially outside of developed cities. “They’re going to be covered under our plan,” he says. “We’re working with international plan providers to do that. But we have no good ability to assess the quality of [those] providers.”

Another topic of concern is home leave, which can cost $10,000 for each faculty member and their family to return home each year. While this is customary for U.S. corporations, it’s not for higher education, he says.

“We’re learning—not just in Singapore—that every country is different,” notes Cavanaugh. “[HR] has to have a very high level of tolerance for ambiguity and change and has to have the ability to adapt to those things pretty quickly.”