[foundation-board] International Emplyoment - The next Phase

Sun Jan 10 19:14:10 UTC 2016

Dear Board,

please find below (and here
<https://docs.google.com/document/d/1MW3oG2i6YeQFdKuCe_PPuUoqmKeTPMNNfCvs1v4TNi4/edit>)
a
proposal to extend our employment options in the future. The Executive
Summary is:

"I hereby ask the Board to reconsider its decision from early 2015 to allow
employment only for people based in the UK; going forward, employment
should  be available in the Netherlands and Germany as well. Other
countries might follow, if and when this would be of strategic importance
for the organisation."

Looking forward to the discussion on Wednesday.

______________________________
International Employment - The Next Phase

From: Pavel Richter, CEO

To: The Board of Open Knowledge International

Date: 8th January 2016

Version: 0.9
Executive Summary

I hereby ask the Board to reconsider its decision from early 2015 to allow
employment only for people based in the UK; going forward, employment
should  be available in the Netherlands and Germany as well. Other
countries might follow, if and when this would be of strategic importance
for the organisation.
Background

The Board made a decision regarding international employment in early 2015.
Back then, four options were identified:

   1.

   Status quo (UK employment only, contractors elsewhere);
   2.

   Status quo (UK employment only, contractors elsewhere) and with
   Netherlands employment for Jonathan and Sander only (not for other team
   members even if they relocate to NL);
   3.

   UK employment only, plus programme to relocate overseas team to UK where
   possible and replace where not possible;
   4.

   Employment in ‘key countries’ (UK, Netherlands, Germany – where we have
   multiple people and a desire to retain/accommodate).

The decision was made to go with option 1, which means that only people
based in the UK can be employees of Open Knowledge International.

Two aspects were noted in the Board paper
<https://docs.google.com/document/d/1WBMm5TvvfJMQl42LsXwmYoCmz_rG2-XBJt1vwLYpPUo/edit#>
concerning the decision on this topic, which are important today:

   1.

   The decision “would need review prior to mid 2016 when secondment
   periods [for Sander and Jonathan] end”;
   2.

   The decision “leaves options open for new ED to build location and
   employment strategy”.

What has changed since the last decision?

When I joined OKI as CEO in June 2015, I started by evaluating the current
state of the organisation. One area I looked at was the location question,
and in particular whether OKI should continue with is virtual
organisational model, or move more into a “bricks & mortar” environment by
opening an office. While I still see the value of having our own physical
location, I came to the conclusion that this is not the right time for us
to do so:

   1.

   We do not have the necessary funds to sustain a physical office that
   could host most / all of our staff members in one location;
   2.

   We are becoming less and less a “UK-based organisation”, with many of
   our projects happening outside the UK, and a lot of funding coming from EU
   and US funders;
   3.

   This would not lead to the desired effect of having an office for the
   organisation, when only a few of our staff members - who are scattered
   throughout the world - would be able to work from such an office.

There is another difference from early 2015: currently, most of our
employees are working from and based in the UK, and almost all staff who
did not want to contract with OKI and did not relocate to the UK have left
the organisation over the last 12 months.

Lastly, we now have different situation and experience within the
organisation: not only myself as CEO, but very soon a COO who will bring
great expertise in organisational and HR matters to the organisation.
Why do we need to act now?

Currently, two employees work from and are based in the Netherlands: Sander
and Jonathan, each on secondments which run out at the end of April 2016.
Both have made it clear that they will remain in NL (and both have done so
from the beginning - they never promised to return at the end of the
secondment).

While there might be a possibility for Jonathan to work as a contractor
based in NL, this is not an option for Sander. As Portfolio Director he is
my right hand, deeply involved in all aspects of leading this organisation
and its projects. Also he line-manages key staff, something he would not be
able to do as a contractor.

In addition, I live in Berlin. As I explained during the hiring process, I
would consider moving to London if and when it would make sense for me to
be able to do my job. This would have been the case had we opted for a
‘real’ physical office in London, with key personnel based in this office.
However, at this point neither is the case: moving to London would mean
that I continue to work from home, but that this home would not be in
Berlin any longer. I don't think that it would make sense for me personally
to do so, and I don't think that OKI would benefit from me relocating to
London, given the current state of the organisation and its continued
virtual model.

The situation, therefore, is that at least three key people of Open
Knowledge International work outside of the UK - something that will not be
possible with the current decision about international employment.
The solution

In short, I recommend that the Board changes its decision from early 2015
and now opts for option 4 in the original proposal
<https://docs.google.com/document/d/1WBMm5TvvfJMQl42LsXwmYoCmz_rG2-XBJt1vwLYpPUo/edit>:
“Employment in ‘key countries’ (UK, Netherlands, Germany – where we have
multiple people and a desire to retain/ accommodate)”.

These “key countries” would be UK, NL and DE right now, with the option to
expand to more countries in the future.
Risks

As has been pointed out in the paper from early 2015, each scenario has its
own risks. For the option I propose, I see the following risks:

   1.

   We will have to adhere to different labour laws, of which some require
   more employee benefits than the UK laws;
   2.

   We increase our administrative burden;
   3.

   We add significant liability around termination, and around sick leave,
   for 2 Netherlands-based staffers (Jonathan and Sander), and some additional
   liability compared to a UK base for German staffers (currently Pavel);
   4.

   We also face the risk of backlash from current staff, who could argue
   that it would be unfair to offer employment to people in Germany and the
   Netherlands, but not in other countries.

The first two risks can be contained by working together with a competent
payroll processor and/or HR outsourcing companies. They not only process
payroll but also issue work contracts based on current national law, and
offer advice about changes in local labour laws.

The third risk cannot be changed or contained. Compared to the UK, both NL
and DE have significantly more rights and benefits for employees. We will
of course seek advice from local experts and set up the best possible
setup. Weighing up these risks, I would say that they are worth taking,
given the overall advantages for OKI.

The fourth risk can be addressed by good communications:

   -

   We would point out that this is a first step in international
   employment, and other countries may follow at a later stage;
   -

   We would also point out that the solution is not only available to
   current staff members in NL and DE (Jonathan, Sander, Pavel), but to
   everybody in the organisation. For both employees and contractors it would
   be mandatory to secure agreement from OKI prior to a relocation;
   -

   We would also make sure that it is understood that there will be no
   other countries following within the next 6 months or so, until we have
   gathered experience with NL and DE;
   -

   Finally, I would point out that future decisions for or against a
   particular country are made on a case-by-case basis, and that we would take
   strategic aspects for OKI into consideration, not only employee wishes (or,
   to put it more bluntly: we will offer employment in other countries only if
   OKI wants to retain the person in question and the costs of this are
   outweighed by the benefits for the organisation).

This communication would happen in person during the next Summit, to be at
the end of February 2016 in Brighton.
Costs

The direct costs of these services are moderate, as has been investigated
<https://docs.google.com/document/d/1g52DWW93cKtqSrAjXuKgIwMfZdSwZ_62vWTE3q4X2W4/edit#heading=h.ogdz6p89dly0>
early last year. We face set-up costs in NL and DE of up to 1,000 €, and
monthly costs of about 30 € per employee. In both instances, we will seek
direct employment, ie. Open Knowledge International will employ the people
directly, not through an outsourced professional employment organisation.

Other costs (social security, health insurance, etc.) and benefits (minimum
holiday allowance, sick leave, etc.) will be dependent on individual
contracts. Different benefits and costs will be reflected in the individual
compensations.
Advantages

Moving to a more flexible international employment model would give us a
number of advantages:

   1.

   Being able to employ people in Berlin will allow us to hire talent that
   is currently not available to us. Berlin is one of the global centres of
   Openness, with a lot of organisations and community members based here;
   2.

   We will significantly lower our risk of contracting with people who are
   then assessed as having had employee status all along. Particularly in
   Germany and the Netherlands, it is a real risk that people who contract
   with OKI for a long period of time (and/or on full-time basis) may be
   considered de-facto employees of Open Knowledge International, which would
   then lead to significant costs for the organisation. The same is true for
   other countries as well, but in DE and NL we would face this immediately,
   given Sanders and my position within the organisation.
   3.

   We will give people flexibility by enabling them to move to the
   Netherlands or to Germany while remaining an employee; several staff
   members have expressed the wish to move to Berlin in the past. This will
   enable OKI to retain talent;
   4.

   We will offer a more appealing prospect to potential applicants who are
   looking for geographic flexibility in their careers.?

Conclusion

I understand the discussion and decision-making process around
international employment in 2014 / 2015 was not easy for Open Knowledge
International. A lot of effort has been put into coming to the current
arrangement. We should not give it up lightly.

But it is not only the current situation, with three key staff members who
are based outside of the UK, that makes it necessary for us to act; we also
can bring much wanted and needed flexibility to our working environment,
which will have a positive impact on staff morale. We will also be able to
open up new labour markets which have been closed for us in the past,
especially in Berlin, attracting people with the additional flexibility we
offer. This will enable us to hire even more great talent.

These advantages have led me to the conclusion that we can and should
change the decision from early 2015. There are risks and costs of doing
this, but they are manageable. And Open Knowledge International is now in a
position to manage them effectively.
_________________________
-- 
Kind regards

Pavel Richter
CEO
Open Knowledge International
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