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Annie Hayes



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Feature: HR’s role in outsourcing


By Tim Bradley, managing director, Pecaso UK

Earlier this month, government officials at Swansea city council came to blows with Unison, the public sector union when it ordered 100 IT staff from the council to strike over a proposed outsourcing deal. Members of Unison voted 97% in favour of strike action, claiming that the council had refused to consult and negotiate over its plans to outsource its IT work to either Cap Gemini or IT Net as part of an estimated £100 million contract.

At Bradford city council this year, government officials narrowly headed off strike action from 135 staff in their IT department, following months of unease over an impending outsourcing contract. The rumour mill at Bradford had kicked into effect and when hearsay about outsourcing whole departments and resultant job losses became rife, staff almost walked out.

Last minute crisis talks between the council and unions managed to avert any predicament, but this could all have been avoided had Bradford city council involved HR outsourcing expertise at a much earlier stage. Tim Bradley outlines the HR considerations.

Whether staff like the idea of outsourcing or not, organisations are increasingly swayed by the prospect of being able to outsource costly processes. The common bugbear amongst staff is that under TUPE (Transfer of Undertakings Protection of Employment) regulations, many staff are required to switch work location, and become employees of the outsourcing company.

This often means relinquishing the benefits enjoyed by the public sector. Bradford city council staff, quite understandably, wanted the option of continuing to work for the council, with the associated benefits.

HR departments are often sidelined in strategic decision-making, but where outsourcing is concerned, it is a staff issue and they can’t afford not to involve their HR people. Good advice is essential in order to minimise staff disgruntlement.

Successful outsourcing requires stringent management to ensure service levels are maintained, or, ideally, improved and that the job satisfaction of staff is kept at an optimum. Lack of effective management can cause issues with the staff involved in the outsourcing process.

In Bradford’s case, consultants working with the council cited lack of communication and HR involvement as the reason the council was nearly brought to its knees over threatened strike action and pointed out that winning staff support for an outsourcing deal is paramount to its success.

All organisations considering outsourcing need to involve HR from the outset and should be addressing communications and change management issues when looking at the outsourcing conundrum. Outlined below are a number of considerations that can help councils to tackle outsourcing HR issues head on:

• First rule of thumb is that the HR and communications process has to be airtight from the outset – there should be no room for ambiguity or misunderstanding
• It is paramount that HR works in close conjunction with the internal
communications team – if this process is flawed, it can have dire
consequences. At Bradford, the situation was exacerbated through lack of HR involvement and communication strategy – if handled effectively from the start, damage is minimised
• If staff are going to be transferred under TUPE legislation then it has to be communicated effectively from the beginning and employee reaction to the different possibilities should be assessed. If employees are unhappy then other avenues should be investigated
• Adherence to TUPE regulations – this communicates that the organisation has the interests of its staff at heart, despite the reasons behind deciding to outsource in the first place. The horror stories in the media would have people believe that they can be sacked and their jobs shifted to Bangalore at the drop of a hat – in truth, TUPE regulations ensure that employees are protected to a certain extent and are at the very least, entitled to redundancy (in the US, there are no such protectionist measures in place)
• Redeployment of staff within the organisation – training levels of staff
and their qualifications should be monitored to see if there are any other openings within the organisation and HR departments can do this effectively with the right tools
• Union involvement: UK trade unions are fully aware of outsourcing implications and most are becoming experienced in outsourcing negotiations – there have been lots of cases recently where the unions are working in close conjunction with companies and trade and government bodies alike in order to minimise impact on staff and make the transition to an outsourcing environment. It is important to involve unions in the process from an early stage in order to reach a suitable agreement for everyone involved
• Seek advice: there are trade bodies such as the National Outsourcing Association that offer advice to companies on HR issues around outsourcing. Drafting specialist advice from HR consultancies like Pecaso can also help to stem the damage and manage outsourcing in the most effective way possible
Outsourcing proposals often cause ripples of consternation among staff. The management of the whole process must be handled with pinpoint precision and, in some cases, a kid-glove approach.

In order to do this effectively, councils need to draft in HR professionals, and consider using external specialist help. HR can really help to soften the blow and add a people dimension to what is otherwise a fairly hard-nosed, business decision.

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Annie Hayes


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