High street bank Abbey is negotiating with a US firm to
outsource back-office work from its Scottish-based insurance
business to India, in a move that it said will cut costs but
preserve jobs.
The bank is in the final stages of talks with US firm MsourcE,
on a deal to transfer data entry work from Edinburgh and Glasgow to
Bangalore. Abbey intends to pilot the programme with 100 staff by
the end of the year, before considering whether to expand off-shore
data entry to other areas.
The move will free administration staff in Scotland to focus on
other areas of work, improve customer service and reduce costs,
Abbey said.
Under the scheme, UK staff will scan application forms for
insurance cover and forward them to India, where staff will re-key
the data into Abbey's IT systems.
The bank said there would be no redundancies and no jobs lost
through natural wastage as a result of the move. But trade union
Amicus said it had called an immediate meeting with Abbey
management to seek reassurances for its members.
Roger Lyons, Amicus' joint general secretary, said he was
concerned that the UK's service industries could follow the UK's
manufacturing industry offshore.
Increasing numbers of UK companies are moving their software
development offshore in a bid to reduce costs by using cheap,
highly skilled labour in countries such as India.
Earlier this year, for instance, Honda UK announced plans to
develop a major software project in Vietnam.
The motor manufacturer's decision to develop a new staff
training and personnel system overseas was driven by the low labour
costs and strong IT skills of the Vietnamese workforce. The new
system will help Honda to meet its target of providing 12,000
man-days of technical and commercial training for staff every
year.
Honda's learning management system will be managed in the UK,
with software development and testing carried out by consultancy
Harvey Nash in Vietnam.
Analyst firm Gartner has predicted the European market for
offshore outsourcing will grow by more than 40% this year. And
analyst firm Ovum Holway predicted up to 25,000 UK IT jobs would be
lost in the next four years through offshore deals. Most job losses
to offshore outsourcing so far have been in call centres but UK IT
leaders warn that more senior staff will be at risk.
Union leaders have warned that they will call for strikes if
offshore deals result in compulsory redundancies for IT staff.