BEST IN FRANCE
January 2005
The American University of Paris
Presented By:Juan CastañedaFrançois HussenotJennifer MillerSimon Pickard
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
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
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
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
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
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
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
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
AUP Financial Data 2001-04
AUP Revenues in K Euros
1638516869 16840
10000
12000
14000
16000
18000
20000
2001-2002 2002-2003 2003-2004
Revenues
Source: Market Research
AUP Key Figures (in euros)
Year 2001-2002 2002-2003 2003-2004
Total Revenue 16,385,000 16,869,000 16,840,000
Base Tuition 16,500 18,500 19,240
Financial Aid 1,249,000 1,248,000 1,709,000
Net Margins -11,000 34,000 -16,000
Endowment 650,000 650,000 650,000
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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.
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
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
Our Sincere Thanks Go To: Mme. Margaret Alluin, Director of Human Resources
102 rue Ste. Dominique, 75006 Paris [email protected], 01.40.62.06.63
Professor Celeste M. Schenck, Vice-President for Academics and Grant Planning102 rue Ste. Dominique, 75006 Paris [email protected], 01.40.20.76.59
M. Douglas Inman, Vice President for Financial Development and Administration6 rue du Colonel Combes, 75006 Paris [email protected], 01.40.20.75.78
Our Team
Juan CASTANEDA
(Sept 2004 MBA Intake)
Residence Expansiel #147
1 rue de la Libération
78350 Jouy-en-Josas
Jennifer MILLER
(Sept 2004 MBA Intake)
Residence Expansiel #12
1 rue de la Libération
78350 Jouy-en-Josas
François HUSSENOT
(Sept 2004 MBA Intake)
Residence Expansiel #155
1 rue de la Libération
78350 Jouy-en-Josas
Simon PICKARD
(Sept 2004 MBA Intake)
Residence Expansiel #115
1 rue de la Libération
78350 Jouy-en-Josas