BEST IN FRANCE

1. BEST IN FRANCE The American University of Paris January 2005 Presented By: Juan Castañeda François Hussenot Jennifer Miller Simon Pickard

2. Executive Summary • AUP as an Institution: History, Products & Services, Key Figures, Clients • Human Resources Operations and Value Integration • Adaptation Initiatives • Key Costs, Constraints and Benefits • Essential Advice • Bibliography and Acknowledgements

3. AUP as an Institution: History, Products & Services, Key Figures and Clients

4. AUP History in France • Founded in 1962 as a private American higher education college, only recognised in the States • Initial product was a 2-year-long education program readying students for return to college in the States • 4-year-long undergraduate degree products introduced in 1964 • Registered as French commercial employer in 1985 • Officially entitled ‘Institut Supérieur d’Etudes Libérales’, as French law forbids privately-run institutions from using the word ‘Université’ in their name

5. AUP: Why in France? • In 1962 Paris had the largest US expatriate community in Europe (circa 75,000) • France is an ideal central location between Old and New Worlds for clients wanting American education in European setting • Location, infrastructure and unique resources of Paris support commercial and academic missions and are key elements in attracting desired clientele • Financial constraints prevent international expansion, so AUP has focused on creating international diversity among client base

6. AUP Key Business • Offers fully accredited US liberal arts undergraduate education in European context and setting • Two graduate degree programs to be inaugurated in 2005 • In direct competition with French state institutions and domestic US colleges • Almost exclusive monopoly over English-speaking college-level education in France

7. AUP: Core Products I • BA undergraduate degree programs offered in 12 fields of concentration • BSc undergraduate degree programs offered in 2 fields of concentration • Clients can select from among 26 supplementary modules • Four year duration for majority of clients • Three year duration offered for those holding equivalent of European baccalaureate qualification

8. AUP: Core Products II • In 2005 AUP will launch two new products in a new sector: • MA graduate degree program in International Administration and Conflict Resolution: to be run jointly with the Institut Catholique de Paris and will unusually be accredited on both sides of the Atlantic • MSc graduate degree program in Finance: offered under the auspices of the recently-created AUP Graduate School of Business

9. AUP Clients and Expectations • Consumer insight: desire to have American education experience and valid qualification without the attendant costs and cultural obstacles of studying in the States. • Consumer expectation: international perspective, high academic product calibre, diversity of peer group, exposure and introduction to array of cultural resources

10. AUP Client Base

11. AUP Key Human Figures • 950 students from 90 nations • 64 full-time faculty, 80 % holding PhDs and having earned degrees in 2 or more countries • 40 teaching assistants • 70-80 administrative staff

12. AUP Financial Data 2001-04 Source: Market Research

13. AUP Key Figures (in euros)

14. AUP in France Today: Value Integration, HR Operations and Constraints

15. Core Values • “The mission of The American University of Paris is to educate generations of academic, social, political, intellectual and business citizens of the world and to enhance the advancement of scholarship in the arts and sciences in an international, multicultural and plural environment.” • HR Dept has recently concluded a 4-year-long General Education Orientation program to improve communication of core message and values to all employees • Communication carried out through written media, oral presentations from AUP President della Paolera or in individual review meetings

16. HR Constraints in France I • What are the principle HR constraints AUP foresaw before setting up in France? • legal status of institution and lack of state benefits • potency of unions • CompBen policies for non-Europeans • What are currently the most serious it must deal with? • work permit regulations for expatriates and families • 35 hour working week • French labour law

17. HR Constraints in France II • How do these constraints differ with operating elsewhere? • inability of employees to work according to a self-determined schedule, especially in research • level of bureaucracy surrounding work permit applications for France is extremely high • legislation regarding workforce management and outplacement is stricter than many other markets • the State bends the rules by applying more favourable rules to public university employees

18. HR Constraints in France III • Has AUP lost projects or employees as a direct result of these constraints? • occasional impact on clients (students) due to visa problems and inability to reside in France for the duration of degree programs • principal issue concerns new international (i.e., non-EEC) hires and the impact existing French immigration law has on relocating families/partners

19. Adaptation to the French Market: Evolution, Initiatives and Improvement Within the Institution

20. Adaptation: Recruitment • Academic personnel largely recruited from overseas due to English-speaking demands of positions. This is the only category for which AUP will file work permit applications with the French State • Administrative personnel exclusively recruited from domestic market: French and other EU citizens, or foreigners with full residential rights through marriage or previous visa applications

21. Adaptation: CompBen • AUP salaries are positioned between two main rivals: on average lower than for equivalent positions in US but superior to those in French universities • Introduction of new legislation and evaluation process to improve compensation parity • Benefits packages for employees are mostly based on the state model. However, AUP offers improved death/disability insurance to many of its workers

22. Adaptation: Training • In accordance with French labour regulations, AUP must offer all full-time employees 20 hours of funded training or development per annum for 6 years. AUP’s financial obligation = 1.5% of individual’s gross salary • Half of training budget spent on IT courses for admin, half on faculty research projects and expenses • All training programs must by law be outsourced to licensed contractors who manage finances and all associated paperwork

23. Adaptation: Workforce Planning • Perennially affected by annual budget constraints, as administration is often first area obliged to cut costs. • Dependent on client enrolment in various programs and courses, which dictates number of full-time and part-time contract faculty to be hired in a given year • Prolonged duration and uncertain nature of work permit applications for expatriate employees is ongoing issue • Given all above factors, no formal planning process exists

24. Adaptation: Performance Appraisal • Full-time employees are legally obliged to attend annual evaluation meeting with HR Director • Significant initiatives under way to introduce Performance Appraisal throughout administration • Widespread absence of formal job descriptions is a major impediment to HR Dept creating and implementing evaluation processes • HR goals should be helped by greater transparency in recruitment, as demand for pre-defined job descriptions will permit better appraisal in future

25. Adaptation: Communication/Motivation • Extensive recent policies to upgrade effectiveness of internal communication using various media • Need to address traditional autonomy of faculty and their resistance to communication of policy change • External communication – above all job adverts – typically directed through local government offices • Motivation policies most necessary for employees with shortest tenure and transitional attitude to role

26. Key Costs, Constraints and Benefits To Operating in France

27. Key Costs: Hiring and Compensation • Travel costs and expenses paid to any expatriate candidate invited to France for interviews, plus subsequent relocation costs if candidate is hired • Higher tax and social charges from 35 hour work week • Significant time costs associated with helping expatriate employees integrate into French social system (phones, residential contracts, local bureaucracy and paperwork) • Obligatory contribution to annual training programs • AUP spends 70% of total revenues on CompBen

28. Key Costs: Workforce and Downsizing • Long-term restrictions are created by contractual obligations to employees occupying a position for more than a year – job for life syndrome • State system for evaluating any downsizing plan can and often will generate sizeable time and legal costs • Employees targeted for outplacement remain in fully paid employment until end of legal process, with no guarantee that the State will allow their position to be eliminated

29. Key Costs: Dismissal • French judicial system is generally weighted in favour of the individual employee • As such the onus of responsibility is placed on an employer to prove merit of dismissal, which incurs considerable legal and administrative costs • Time costs of negotiations or conflicts with unions • Again, individuals affected by process remain in full-time employment until legal adjudication has occurred

30. Key Constraints: Other • Substantial Expansion of the physical organisation of AUP would be problematic given the premium for real estate in central Paris and its exorbitant cost • Relocation elsewhere in France or in Europe is unthinkable due to added value the current environment brings to AUP products • Communication presents a perennial issue for non-French speaking employees

31. Key Benefits • Product image is enhanced by association with surrounding environment and resources. • Willingness of clients to pay more for benefits of being in France translates into better salaries for employees and improved product quality. • Quality of local infrastructure superior to most other urban environments regardless of location. • AUP’s value of providing an American product in an international context gives it a strong position since inception of Lisbon Accords.

32. Essential Advice, Bibliography, Acknowledgements and Contact Information

33. Essential Advice • What advice would AUP directors offer to other companies in this sector considering France as a location? • Focus on educational service provision, not creation of new institutions (unless money is no object) as start-up costs for colleges and schools are huge • Ensure that extensive research is done into and counsel sought regarding French labour law, as it is major impediment to doing business • Look at central or eastern Europe as potential location instead for creation of new establishments

34. Bibliography • The European Higher Education Area Joint Declaration of the European Ministers of Education signed in Bologna, 19 June 1999 • AUP Financial Records 2001-2004 • AUP 2004/2005 catalogues and promotional literature

35. Our Sincere Thanks Go To: • Mme. Margaret Alluin, Director of Human Resources 102 rue Ste. Dominique, 75006 Paris margaret.alluin@aup.fr, 01.40.62.06.63 • Professor Celeste M. Schenck, Vice-President for Academics and Grant Planning 102 rue Ste. Dominique, 75006 Paris celeste.schenck@aup.fr, 01.40.20.76.59 • M. Douglas Inman, Vice President for Financial Development and Administration 6 rue du Colonel Combes, 75006 Paris douglas.inman@aup.fr, 01.40.20.75.78

36. Our Team