WTW-合资企业的人力资源指南 An HR guide for navigating JVs 2023

AnHRguidefornavigatingJVs

Authors

JimMcKay,ManagingDirector,Global

M&AClientExperienceLeader

SeanHegarty,SeniorDirector,M&A

Withtheright

knowledgeandtools,theHRprofessional

canbeanintegralpartoftheJVteam.

Jointventures(JVs)havebecomean

importantelementofmanycompanies’

businessstrategy.Forthoseaimingtodobusinessinternationally,JVsareoftentheonlyfeasiblewaytoenternewmarkets.

DuetothemanycomplexhumancapitalconsiderationsnecessaryinanyJV,itisessentialtohaveHRinvolved

fromtheearlystageswhenaJVisbeingconsidered.

Tocontributemeaningfullytothesediscussions,HR

professionalsmustunderstandthepotentialissuesandproblemsthatcanariseinaJVandhavetheresourcesnecessarytodevelopsolutions.

GiventhestrategicimportanceofJVsintoday’sglobal

businessenvironment,onemightexpecttoeasilyfind

guidanceontacklingthecomplexitiesofaJV,basedon

widelyused,successfulmethods.Butthat’snotthecase.AreviewoftheliteratureonJVsshowsmuchofittobe

incompleteatbest,contradictoryatworst.Tacticsand

solutionsthatmakesenseforoneJVoftendon’tresonateforanotherforreasonsthataren’tobviousorexplainedbytheexperts.

Afterhelpingmanyclientsnavigatethehumancapital

issuesofJVjourneys,we’vedevelopedthefollowing

guidelinesforHRprofessionalsfacedwiththeprospectofanimpendingJV.You’llalsofindalistofcommonJVtermdefinitionsattheend.

Armyourselfwithknowledgeandtools

First,theHRprofessionalneedstolearnhowJVsareset

upandoperatedandhowtheydifferfromothertypesofinvestments,suchasacquisitions,alliances,greenfield

upstart-andminorityinvestments.Therearelegalaspectstounderstand,aswellasstructuraldetails.

AJVisformedwhentwoormoreinvestingpartnerssetupabusinessentity(seeFigure1foratypicalJVstructure).

ThesepartnerssharetherewardsandrisksoftheJV.BothpartiessignaJVagreementorshareholderagreement,

whichformalizesthedealandprotectseachpartner’srightsandinterests

It’salsoimportanttounderstandsomefundamentalconceptsaboutJVs:

Separateness.TheJVislegallyseparateanddistinctfromeachinvestingpartner’sorganization.Butseparatedoesn’tmean

independentsincethepartnerscontroltheboard

andmanagementcommitteeandarethemajor,

oronly,investorsintheJV.

Fiduciaryduty.Apartner’sleaderscanformpartoftheJV’sboardandmanagementcommittee.However,theseindividualshaveafiduciaryduty

toactonbehalfofallJVshareholdersratherthanonlyintheirownorganization’sinterests.

Jointcontrol.NoonepartnercancontroltheJV;controlbelongstoallpartnerstogether.Butjointcontroldoesnotnecessarilymeanequalcontrol

sincecontrolisdeterminedbyseveralfactors,

includingthevalueofeachpartner’scontributiontotheJV.

Veto.Withjointcontrol,eachpartnerplaysan

activeroleintheJV,atleastatthestrategylevel.Thismeanseachpartnerhasthepowertovetohigh-levelstrategicdecisions.

WehavemanyJVs,butfewpeople

thathaveworkedtheirsetupand

understandthedifferenttypesof

JV’s.So,rulenumber1forusitto

setupanHRmeetingtogooverthefundamentals,asexplainedinthis

paper.Itjustsavessomuchtimeandfrustrationdowntheline.

Clientcomment

Figure1.Atypicalstructureforjointventures

Otherpartner(s)

Company1

(Couldbemultiplepartners)

JVcompany

(Couldbeanewentityoranexistingbusiness)

BoardofDirectors

(Nominatedbythepartners)

Managementcommittee

(Determinedbythepartners)

Negotiation

andoperational

tasks

Operationandfunctions

(DeterminedbytheJV)

Negotiationtasks

JVagreement

AnHRguidefornavigatingJVs/4

Developaviewpoint,definerole

DuringtheJVjourney,it’seasytolosesightofsomeofthe

issuessuretoariseandsolutionsconsider.Asystematicapproachcanbeenormouslyhelpful.Drawingfrom

experienceinconsultingonmanyJVsandinterviewswith20JVleadersworldwide,we’vecreatedatooltohelpJVpartnersanticipateandaddressthemajorissues.

ThetoolinFigure2focusesonthreekey,interrelatedelementsandthemajorfactorsandissuestobe

consideredforeach:

•Strategy

•StructureandOperationalDetails

•People

TheStrategysectionhighlightsthebusiness-wide

issuesthatneedtobeconsideredfirst.Inthestrategy

developmentphase,well-intentionedadvicecanbe

veryconfusing.Duetothewidevarietyinthetypes,

structuresandoperationsofJVs,thefoundationonwhichoneJVisbuiltisnotcomparabletoanother.Whatworksinonesituationmightbeinappropriateinthenext.HR

professionalsmustunderstandthestrategysection,toplacewhatfollowsintherightcontextforeachJV.

TheStructureandOperationalDetailssectiongetsto

thedetailsoftheworkingrelationship,whilethePeople

sectionaddressestheemployeepartoftheequation,

includingtheleadershipissuesdiscussedbelow.During

thedealnegotiationsphase,thesedetailsmustbeworkedout,notdeferredtoalaterdate.Thisiscriticalfortwo

reasons:1)TheoperationalleadersneedasmuchclarityaspossibletoruntheJVand2)practicallyspeaking,gettingpartnersbacktogetherlatertoreviewissuesthatsome

partnersmighthavedeemedsettledisnota

simpleprocess.

Usingthistemplate,HRcandeterminethescopeofits

rolefromabusiness,peopleandfunctionalperspective.Continuallyreviewingtheissues,questionsandpotentialanswers—withinyourcompanyandwiththeJVpartners—willhelpyousetupastrongerbusiness.AndastheJVenvironmentisdynamic,thesolutionsoftenchangewhenthefactsandcircumstancessurroundingtheJVchange.

Recognizetheimportanceofleadership

PeopleissuesareattheheartofasuccessfulJV.Theskill

setsoftheindividualsworkingonandleadingtheJVare

crucial.Thefactorsofjointcontrol,fiduciaryduties,vetoesandseparatenessmeanthatpartnersmustcollaboratetomakedecisions.Thiscallsforleaderswhocanbuildtrust

withthepartners,collaboratewiththemandinfluence

theirdecisionmaking,withoutdictatingordominatingthediscussions.That’swhytrust—importantinallbusiness

dealings—iscriticalinaJVenvironment,whereconflictsregardingstrategyandoperationsareinevitable.When

partnersnegotiateonafoundationoftrust,theycanmoreeasilyweathertheseconflictstogether.

Besmartatthestart

ManyoftheproblemsthatariseinJVscanbetracedtotheearly-stagenegotiations:theleadersselectedto

representeachcompanyintheJV,theleaders’

preparation,andtheadviceorexperiencethat

guidedthem.

Thefollowingtipswillhelpyouavoidsomecommonpitfallsearlyon.

•SelectJVleaderswiththeskillsetsnecessaryto

representyourcompany.They’llberesponsibleforidentifyingandassessingthebusinesspartner.

Selectingleadersiscritical,but

fullofpotentialpotholes.We’ve

experiencedsituationswhere

whatwethoughtwasagreat

opportunity,justdidnottranslatetotheindividuals.Manyreasonscan

becited—don’twanttorelocate

becauseoffamily/personalreasonsiscommon.Inonecase,wewereonour5throundfortwokeypositionsbeforewefinallygottherolesfilled.Theprocessistime-consumingandcausesdelays.

Clientcomment

5/AnHRguidefornavigatingJVs

•Pickthepartnerfirst,thebusinesssecond—anddoacomprehensiveduediligencereview.

•ThereisnosinglepathtoJV“nirvana,”butthereareuniversalprinciplesyoucanapplytoidentifyand

resolvemanyofthecommonproblems.Preparewell,understandthepeopleandbusinesscontextofeachJVandstudytheissuesandproblemsrelatedtothespecificsituationathand.

•Don’tautomaticallytransferfindingsandlearningsfromoneJVtoanother.

•Addressworkingrelationshipsduringthenegotiationstageandmonitorthemthroughoutthelifetimeof

theJV.

Thisissueoftrustcomesupagain

andagain.It’ssoimportanttohave

atleastoneleaderwho’sinvolved

inboththenegotiationandthen

operationalpartoftheJV.OneofourJVpartnerssaid,‘thepeoplewebuiltuptrustwithatthestartarenotthesamepeoplethatarerunningthe

JVsothatmeansthattrustneedstoberebuiltandthat’snotaseasyasitsounds.

Clientcomment

•Don’tleavetheprocessaftertheJVissetup.Continuetotrackandmanagetheprogressandcareersof

employeesyouexpecttoreturntoyourfirm.

Inthecaseoftemporarytransfers,

weneedtomakesurethose

transferredhaveapathbacktothe‘mothership’andweusementors/

coachestoensuretheydon’t

getlostinthesystem.TheJVis

independentafterallandwehavetohaveacentraltrackingmechanism(wheretheyareandforhowlong

andthereportingrelationship)thatsomeonehastoownatHR.Butit’sachallengesincewetransferthemforaminimumofthreeyears.Ittakes

thatlongforthetransfereetobuildtrustandtransfertheirknowledge.

Clientcomment

TheroleofHRintheJVprocessvariesaccordingtohowitpositionsitselfwithinthecompany.Youcouldbean

integralpartoftheJVteam,involvedinselectingthe

leadershiporyoucouldhavenoroleatall(particularlyifyoulettheotherpartnerdetermineHR’srole).Armedwiththerightinformationandtoolsyoustandamuchgreaterchanceofbeingakeyplayerinyourcompany’snextjointventure.

AnHRguidefornavigatingJVs/6

Strategy

Factorsandvariationstoconsider

Comments

Majorissuesand

keyquestions

Isita)anewentity(noexistinglegacybusiness),

b)anewentity(formedbycombinationof

existingbusinesses)orc)anexistingentity?WillthisinvolvedivestinganexistingbusinessfromalargerbusinessandrollingallorpartofitintotheJV?

DistinguishingamongthesethreetypesofJVisthe

criticalfirststepbecausethetypeofJVwillinfluence

Whatisthenatureand

typeofJV?

allsubsequentdecisions.Andmisunderstandingthe

differencesamongthethreesowstheseedsforfuture

confusion.Also,asimultaneousdivestitureandJVsetupcanposeenormouslogisticalproblemsforthepartnerexperiencingtheseevents.

WhoarethepotentialpartnersintheJV?

Arewedealingwithapublicorprivate

corporation?Aprivateequityorfamilybusiness?Haveweworkedwiththepotentialpartners

before?Doweknowhowtheyoperate?Howdotheyviewtheimportanceofissuesweholddear(e.g.,brandandreputation)?

Whoareourleadersinnegotiations?Are

theseleadersintendingtojointheJV?Dotheyunderstandhowcollaborationwillworkand

thescopeoftheirauthorityinthecontextof

“jointcontrol”?Cantheyarticulatetheimpactof“separateness”ondecisionmakingandtheirfiduciarydutytotheJV?Wherearethe“veto”issueslikelytoarise?

Isitdomesticorinternational?Ifinternational,

howmanycountries—oneormany?IstheJVinafamiliarmarketoranemergingmarket?What

doweknowaboutdoingbusinessin

thesemarkets?

Whyarewedoingthisdeal?Whatisthe

strategicrationaleandbusinessfit?Whatarethepotentialfinancialreturns?Dothepartnersshareourgoals?Dowehavesimilarinterests?Canwewritethesedownandagreetothem?

FirmsthatoperatemultipleJVswilllikelyhavedifferent

partnersforeachJV.Eachofthesepartnerswillhave

itsownuniquecultureandwillbringthisculturalbias

towardthenegotiationsandintotheday-to-dayworkingrelationships.ThismakesextrapolatingculturallearningsfromoneJVpartnerintoanotheroflimitedbenefit.

Whoareourleaders?

Dotheyunderstand

theimplicationsofthebusinessbeingformedasajointventure

betweenpartners?

ThecollaborativenatureofJVsinfluencesthepartners’

choiceofleaderstorepresentthem,andanypotential

changeofleaderscanchangethedynamicsoftheworkingrelationship.Forexample,iftrustisbuiltupbetween

leadersduringnegotiations,thereisnoguaranteethatthisleveloftrustwilltransfertoadifferentsetofleaders.

WhatistheglobalnatureoftheJV?

AninternationalJVisoftenthepreferredwayfora

companytoenteranewmarketorgeographybecausetheriskissharedbetweenthepartners.Itcanalsobe

thefastestwaytoforgepolitical,regulatoryandbusinessrelationships.

Whatarethestrategicandbusinessreasonsforpursuingthisdeal?

Somecommonbusinessreasonsforpursuingadeal

includeindustryconsolidation,entryintonewmarketsornewproducts,accesstoresearchanddevelopment,and

accesstonewtalent.Otherreasonsincludethe

needforapartnertoshareorreducerisk,orlimititscapitalinvestment.

Whyarewe

consideringaJV

andnotanoutright

acquisition,minority

investment,allianceorgreenfieldstart-up?

WhyisaJVthebestoption?Havewediscussedtheotheroptionsand,ifso,whatwerethe

conclusions?Isthisanauction,i.e.,arethereotherbiddersontheJV?

The“birth”ofaJVisnotstraightforward.Forexample,

manydealsstartoffasoneoftheotheroptionsbutthen

turnintoJVdiscussions(orviceversa).Also,weneedto

considerifthisisanexclusivediscussionbetweenpartnersorifthereareotherbiddersbecausethismightrestricttheabilitytogaindetailedinformation.Thesepotentialdeal

structuretwistsandinformationrestrictionsarecomplextodealwith,andhaveasignificantimpactonthemessages

senttotalentslatedtojointheJV.

Whatisthebusinessplan,andwhenwillitbefinalized?

WhataretheJV’smission,visionandstrategy?

Whatisthedesiredculture,andhowwillthis

beachieved?Havewediscussedthisindepth?Whatarethepartners’views?Canwewrite

downtheseviewsandagreeonthem?Whenwill

theplanbefinalized,andwhohasthe

finalsign-off?

WhiletheJVpartnersworkonthistogether,itiscriticaltoresolveasmanymattersaspossibleearlyintheprocess.ResolutionherewillhelpguidetheJVoperationalleadersandgivethemmoreclarityinrunningtheJV.

7/AnHRguidefornavigatingJVs

Whatistheimpactofdifferencesbetween

nationalcultureand

organizationalculture?

Basicdifferencesinculture(bothnationaland

organizational),style,opennessandapproachcanoftenleadtodifferencesinwillingnesstoshareinformationinnegotiationsandmeetings.And,onceoperational,theseculturaldifferencesfrequentlyresultinaninabilityto

resolvetheinevitabledisagreementsthatcomeupinJVs.

Theownershipissuewillnormallydeterminethelevelofcontrolonepartnerhasovertheother.FormingtheJV

mightbethefirststepineitheranoutrightacquisitionorasaleoftheinterest.

Whatistheintendedownershiplevel?

Whatisthedegreeofmanagementcontrol?

ThisreflectsthedegreeofcontrolonepartnerhasovertheotherandtheJVitselfandiscloselyrelatedtoownership

stake.Also,theauditor’sinterpretationofcontrolcanleadtoadifferentaccountingimpactthaninitiallyanticipated,whichinturncandilutetheanticipatedbenefitsoftheJV.

ManyJVshaveafinitelifespan,soweneedtoknowif

wearegoingtoexitbyacertaindate.Thecommonexitoptionsaretobuyoutthepartner,toselltheinterestatalaterdatetootherpartnersorinvestors,tofullyownthefirmortofloatittothepublic.

Whatistheintendedexitstrategyfor

eachpartner?

WhatwilleachpartnercontributetotheJV?

Thecommoncontributionsarecapital,intellectual

property,assets,peopleormostlikelyamixture.Thesecancomefromawholebusinessorpartofabusiness.

Strategy

Factorsandvariationstoconsider

Comments

Majorissuesand

keyquestions

Howwillthisaffectournegotiationstrategy?

Willithaveanimpactontheleaderswehave

selectedtonegotiate?Culturally,doallof

thecounterpartteammemberscontributeto

discussions,ordotheydefertoonesenior

leader?Dothepartnerswelcomequestionsor

seequeriesasdisrespectful,underminingtheir

roleandauthority?

Isthisamajorityinvestment(ownmorethan

50%oftheJV)orminorityinvestment(own

lessthan50%)?Isthereapathtoownership

ornopath?Ifso,whatisthetimingforthe

ownershipchanges?

Whatdowebelievethedegreeofcontrolto

be,andwhatneedstobeagreedonregarding

themechanism,extent,focusandtimingof

controlissuestosupportourbelief?Areany

oftheseissuesintendedtochangeovertime

and,ifso,when?Doourauditorsagreewithour

interpretationof“control”?

Whatistheplanandtiming?Whattriggers

dissolution(e.g.,businessconditionschangeor

partieschange)?Whatistheprocessifoneof

theJVpartnersisacquiredorgetsintofinancial

trouble?Areourtimehorizonssimilar,orare

theresignificantdifferences?

Whatareweinvesting,andwhatarethe

“people”implications?Isthisanexisting

businessbeingturnedintoaJV,orwillitbe

anewbusiness?Iftheansweris“new,”does

itstartasanewbusiness,orwillexisting

businessesbecombinedintothenewfirm?

Whatduediligencewillbedone?

Thiscanbedoneattwolevels:onthepartnerandonthebusiness.Thereisoftenconfusionastowhetherthisgetsdoneand,ifso,howandatwhatlevel.

Whatistheprocessfordoingduediligence?

Whowilldoit,andhowwillitbeconducted?

WhatplanningneedstobedonefortheJVas

partoftheduediligence?

AnHRguidefornavigatingJVs/8

Structureandoperationaldetails

Factorsandvariationstoconsider

Comments

Majorissuesand

keyquestions

Thisiscloselytiedtotheworkforceplan.

WhenwilltheJVbeopenforbusiness?

Whatistheintendedstartdate?OristheJV

currentlyoperatingasabusiness?Willall

employeesbelegallyreadytoworkbythe

intendedstartdate?Whowillowntheseissues?

ThisgetstotheheartofhowtheJVwillfunctionand

coversday-to-dayoperationalmatters,includingdisputeresolutionprocedures.Asinanybusiness,disagreementsareinevitableoncetheJVisoperational,soclarityhere

providesamechanismtodevelopandmaintaintrustandbuildtheworkingrelationshipbetweenpartnersatthe

startandthroughoutthelifetimeoftheJV.Disputesthatcan’tberesolvedmightendupgoingthroughaformal

arbitrationprocess,whichwillinevitablystraintherelationship.

Whatarethedetailsoftheworking

relationship?

Whatistheprocesstofollowtogetinvolved

indecisions?Andwhatdecisionsneedtobe

escalatedtothepartners?Whattacticalmatters

canbesolvedwithintheJVitself?DotheJV

leadershaveclarityonnotjustwhatthey

willdo,butalsohowtheywilldoitwithinthe

JVcontext?

Whatismeantby

integration,andwhatlevelofintegrationisplanned?

Whatdowemeanbythisterm?Whatisthe

proposedlevelofintegration,andwillthis

changeovertime?Iftheintentistofully

owntheJVatsomestage,whatcanbeputin

place,shortandlongterm,tofacilitatelaterintegration?

Whatwilltheorganizationalstructurelooklike?Whatarethebasicmodelandrelatedreportingrelationships?

Often,majorityJVscanbepartiallyintegrated,butminorityJVsposeaproblem.Integrationdecisionsarecloselytiedtothefutureownershipandexitstrategydecisions.Also,

integrationcanjustmeansharingskillsandpractices,soit’simportanttoclarifythedefinitionofthistermtoavoidfollowingtypicalacquisitionintegrationpractices.

Whatisthe

organizational

structurefortheJVbusiness?

Whatdoweneedtodotohelpprotect

ourinvestmentand

companyreputation?Whatarethekey

financial,legaland

publicrelationsrisks

associatedwiththeJV?

Whatbestpracticesmightweinstill

intheJV?

Thecommonstructuraloptionsareamatrix,aflator

hierarchicalstructure,oranetwork-basedstructure.The

structurecanalsovarybybusiness,productlineorgeography.

Whatarethekeygovernance,financial

andcomplianceprocessesandcontrolsto

implementtosupportorprotectourinvestmentandreputation?Whatneedstobereported,

bywhenandbywhom?Whatarethe

partners’requirements,andisthereanyduplicationoroverlap?

Internationaldealsposespecialproblems,especiallyin

emergingandrapidlygrowingmarketswheretheremightbesignificantdifferencesinstandardsinareassuchas

healthandsafetyandhumanrights.Compliancewiththe

ForeignCorruptPracticesActcanalsoposeadditional

problems.Allthesecanbecostlytoinvestigateorcostlyto

fix,butthepartnerscanbeheldresponsibleforanyJVviolations.

WhatcanwesharetogivetheJVafast

start?Forexample,canwehelpwithbest

practicesinareassuchastalentmanagementprocesses,successionplanningorpay-for-

performanceplans?

DoestheJVneedtemporaryorpermanent

helptosetuptechnologysystems,payroll

andbenefitplans?Ifso,whowillfurnishthese,andwhatwillthecostbe?Whowillmanage

theagreement?

Thisprocessisoptional,whereastheorganizational

processesaboveareessential.Thereisoftenaneagernesstosharebestpractices,buttoomuchimmediatefocus

onalltheseprocessescanoverwhelmtheJVanddistractemployeesfromthebusinessofrunningtheJVitself.

WilltheJVneedanytransitionorongoingsupportservices?

Whileoftenneeded,contractingfortheseservicescanbecostlyandtime-consuming.Theyalsomustbesetinthecontextthatthepartnersarenot“outsourcers”anddon’tdothisasaprofessionalservice,andthereforethequalityoftheservicescansuffer.

9/AnHRguidefornavigatingJVs

People

Factorsandvariationstoconsider

Comments

Majorissuesand

keyquestions

Whattypesofrolesareneeded,alongwith

theirintendedlevelsofauthority?Whatarethereportinglines?

Whatkeyrolesand

positionsareneededattheJV?

Thetypicalleadershiprolesarechiefexecutiveofficer,chiefoperatingofficer,chieffinancialofficer,chiefHRofficerandgeneralcounsel,plusspecialistortechnicalpositionsspecifictotheJVbusiness.

Whoaretheintendedleaderstofillthese

positions?WhowilljointheJVboardand

themanagementcommittee?Arethereany

restrictionsontheselectionoftheleaders?What

arethepartners’views?DoourleadersneedtrainingonJVsandtheirfiduciaryduties

totheJVitself?

Whattalentisavailabletofillthesepositions?Arethereanysignificantconstraints,e.g.,localregulatoryrequirements,languageconcerns,orsafetyandsecurityissues?Whatarethe

partners’views?

Whoarethekey

leaders,andwherewillthetalentcomefrom

tofillthesepositions?

Someoftheleaderswillbepartofthenegotiatingteamandthereforewillbefamiliartothepartner,butmostwillnotbefamiliarbecausetheywillbeselectedafterthe

decisiontoproceedwiththeJVismade.

Whatotherkey

positionsareneeded,andwherewillthe

talentcomefromtofillthesepositions?

Thecareerimplicationsfortheindividualmustbethoughtthrough,especiallyifthereisasignificantcareerrisk(forexample,no“returnticket”tothepartner).Andcombiningbusinesseswilllikelyhighlightduplicationofrolesand

talent,whichmightrequireterminationofkeytalentifnoalternativeemploymentexistswithinthepartner.

Whatarethelikely

transferissuesrelatedtothetalent?

Doanyleadersneedtobeconvincedto

transfer?Arethereanyobviousfamilyreasonsprohibitingtransfers?Dowehavealternative

candidatesiftheselectedtalentturndowntheopportunity?Arethereanydualemployment

issues?Arethereanylocallegalrestrictionsonthenumberoftransfersatanypointintime?

Whatpaypackagesarebeingproposed,andarethereanysignificantdifferencesinthepartners’views?Isstockcurrentlyamajorpartofthe

Transfersneedtobecategorizedaspermanent,temporary,contractorsecondedemployees,becausetheissuesare

differentforeachgroup.ButmanytransfersthatlookgoodonpaperdonottakeplacebecauseleadersdonotwanttotransferoutofthecompanyintoaJV.

Whataretheproposedleadershippaylevels,andarethereany

issuesregardingstockplans?

Payissuesareoftencontentious,especiallyifleaderscomeoutofafirmwithsignificantstockoptions,andtheJVcan’toffercomparableincentives.

talents’packages?WilltheJVbeabletooffer

stockand,ifso,howmuch?Ifseniorleaders

arecomingfromdifferentpartners,justhowfar

apartaretheyintotalcompensation?

Somecountriesrequireformalemploymentcontractsasalegalconditionofemployment,whereasothersdonot.Indualcontracts,theemployeehasacontractwithboththepartnerandtheJV.

Whatemployment

contractsareneeded?

Foreachindividualtransferring,whatarethekey

terms,conditions,pay,bonusandbenefits,and

howwillthischange?Arethereanylocallegal

restrictions?Whowillholdthecontracts:the

partnerfirm,theJVorboth?

Whatcompensationandbenefitplans

andprogramswillbesetup?

Agreeingtoandthensettingupplansandprogramscanbeextremelycomplexandtime-consuming.

Decisionsareoftenconstrainedbylocallawsrequiring

thatemployersmaintainsomelevelofcomparabilitywithexistingbenefitpackages.

Doweadoptnewplansorrollovereach

partner’sexistingplans?Ordoweadopta

mixture?Whatistheexpectedtimelagbetween

settingupthelegalentityandbeingableto

processpayrollandbenefits?Whatotherkey

employmenttermsandconditionsdoweneed

toconsider?

Whatistheworkforcestrategyandplan?

Theoperationalstartdatecan’tbebeforethelegalentityisinplace,theworkforceisestablishedandemploymentcontractsareineffect.Decisionsheregenerallycome

afterkeyleadersareaboard,sincetheywillwanttosetthedirectionfortheJV.

Whileoftenneeded,contractingfortheseservicescanbecostlyandtime-consuming.Theyalsomustbesetinthecontextthatthepartnersarenot“outsourcers”anddon’tdothisasaprofessionalservice,andthereforethequalityoftheservicescansuffer.

HowwilltheJVbestaffed?Fromtoptobottom?

Whowilldecidethefunctionsandsalespeople

anddealwithoverlaps?Aretherereductions-

in-forceimplications?Whopaystheseverance

cost,andwhen?

WilltheJVneedanytransitionorongoingsupportservices?

DoestheJVneedtemporaryorpermanent

helptosetuptechnologysystems,payroll

andbenefitplans?Ifso,whowillfurnishthese,

andwhatwillthecostbe?Whowillmanage

theagreement?

AnHRguidefornavigatingJVs/10

Arethereanyunion/workscouncil/workscommitteeissues?

Workingwiththesegroupswithin