In Real Life – A story of choosing to ask for forgiveness rather than for permission

https://youtu.be/m2Lqar6uStc

SUMMARY

  • Sometimes you have to do what’s right for the organization and the employee, even if that puts you at odds with instructions from your manager.
  • Are you managing international mobility ? This story will remind you that working with tax and immigration specialists to optimize return packages can prove very attractive financially, even if that takes a lot of time to implement.
  • “There will always be exceptions to rules. As HR pros, I know that we tend not to like them, but if they are justified, just do your best and try to deliver on that”.
  • For the full training, watch the video or read the transcript below.

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INSPIRATIONAL QUOTES


TRANSCRIPT

Hello, and welcome to this episode of Compensation Insider. Today, I want to tell you a story of something which happened to me many years ago when I was working in Italy. I was managing international mobility as part of my responsibilities of Director of International Compensation and Benefits.

Background

At the time, the Group was led by a CEO who was highly praised in the press, but his management style was one of management by terror. Every quarter, he was holding a very big meeting with all the executives of the group and every quarter, at least one of those executives would get fired if not more than one.

As you can imagine it would take one month just for the organization to prepare these Executive presentations, because the executives knew that their job was literally on the line.

So, one day, this gentleman was let go as part of this quarterly executive meeting. It turns out that this gentleman was in the subsidiary that I was handling Comp & Ben for.

The gentleman was French. He was on an Italian contract and had been seconded form there to the US. He was in his late 50s, therefore his view was to go back to France, and eventually retire there. That was a quite complex international mobility case, not to mention at the same time end of service. Given that this was highly sensitive, the CHRO for the company (my N+2) came to me and told me “Look, Sandrine, you’re only allowed to process based on whatever information I give you, you cannot make any comments or anything like that”.

How I came to not follow instructions from my N+2

Then I received the documentation of the exit agreement that the CHRO had negotiated with that French executive for him to leave the US, while on a lease from Italy, and go back to France his country of nationality. I could immediately see that there was going to be a huge cost in terms of Social Security contributions and income taxes, as well as company taxes and employer social contributions, in the way that the deal had been built.

I went to the CHRO and I said to him that I could help you save some money. There were some better ways of doing things because I knew how the French system is working. We could find ways that were going to cost us a lot less money for the same kind of package that you want to give him, because we would reduce the taxes and social charges.

Nevertheless the CHRO was still saying, “No, no, no, we have to respect protocol, this gentleman doesn’t want to talk to you, you’re not senior enough”. I thought “Well, if I save him a lot of money through lower taxes and social charges, I guess he should be talking to me”.

Eventually I did something which was forbidden, which is : I contacted the gentleman, let’s call him Michel, and I gave him a call. I introduced myself and at first he got really offended, saying “ I’m only dealing with the CHRO and the super senior executives” and so on.

I said : “Please don’t get offended. I took it upon myself that you might be interested if I were to tell you that I know a way that we can reduce the income tax and the Social Security charges that you’re going to have to pay if we structure your package in a different way when you go back to France. So I just want to see if you would be interested in doing that.

My boss told me that I’m not allowed to talk to you but I thought you would be interested, so maybe you could tell him that you reached out to me because you knew that I was French and I know the French system. You wanted to understand a few things and then you found out that there was a way to better structure your exit package, and you would like to work with me”.

When I started to tell him that with the same gross amount he would be keeping more in his pocket, of course he forgot that he was such a big exec who would not speak to a lowly director.

The outcomes

Over the following six to eight weeks we worked together and we restructured the way that the deal had been put in place for his repatriation.

 To cut a long story short, basically, on his package I made him save over 100,000 euros that he didn’t have to pay in taxes and Social Security.

At the same time, I also saved 250,000 euros for the organization in Social Security contribution and employer taxes as well. The overall deal was not increasing anything, it was just reducing costs by a clever way of structuring.

I also had to manage the international relocation of that gentleman and it was a huge challenge, I have to say, because he had a collection of rare (live) birds that were very, very expensive that he wanted to relocate to his home country because his wife was very attached to the birds.

I had to find a company that would do the relocation of those birds. Live animals are not so easy to move across borders. There are lots of specific regulations, veterinary inspections and quarantines and all this kind of stuff. Typically, those items in the household goods moves are not covered by the employer.

Even for an executive, companies will usually not pay for the relocation of a grand piano or a Ferrari or exotic pet birds that are super expensive, but in that case that was part of the deal. I found a company that did that relocation, we only had one bird who died, so that was good. Eventually the gentleman was very happy.

Lesson learned

Michel had been nice enough to say to the CHRO that he had been the one who had initiated the conversation with me, because of course my boss was very upset initially that I had spoken with this executive.

I explained to him that “I’d been working in total for maybe a month, over a two-month period, just on that one case on that one employee. It was an extremely complex situation and I had to work with tax specialists, immigration lawyers, and also oversee the actual relocation obviously. But I had saved the company, and the executive, more in those two months than what they were paying me in a year and a half”.

My point : I believe that sometimes it’s worth it to rely on the expertise that exists inside the organization.

Just reach out people who might not be your first immediate point of contact / source of information on a certain topic. Don’t be blocked by assumptions about grade/seniority or other internal, cultural barriers. If they have access to a set of knowledge that is going to be beneficial for your employees and for your organization, why should you deprive your organization of that opportunity to do things in a way which is legal, but which is also optimized, and that makes everybody happier, including the employee ?

Also, the story today is just to tell you that when you’re dealing with executives, don’t be scared to talk to them, even if you’re not really supposed to, and especially if you know that you can help them handle a situation better.

Finally, from a global mobility point of view, don’t be surprised if you have to do sometimes some really unique relocation movements. You never know what people are passionate about. You never know what agreements an organization will put in place with a candidate, or with an executive, or with a high potential employee that they really want to keep. There will always be exceptions to rules. I know that we tend not to like them, but if they are justified, just do your best and try to deliver on that.

That was my story for today. I hope you found it interesting, and I will see you next week.

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