Don't allow uncertainty to breed rumours and mistrust among staff

Swansea strike shows importance of staff consultation

The acrimonious eight-week dispute at Swansea Council over a proposed IT outsourcing deal may have been settled earlier this month, after IT staff voted to end their strike. But opposition to UK and offshore deals from IT workers and unions has mounted and looks set to intensify.

Experts have warned managers that they need to pay more attention to the concerns of their staff when preparing to outsource. Meeting the requirements of Transfer of Undertakings Employment (Tupe) legislation, which guarantees terms and conditions for employees who transfer over to a supplier following an outsourcing deal, may not be enough to win over anxious staff.

Keeping staff informed of future plans for outsourcing is the first step, to prevent rumours breeding and mistrust brewing.

Staff need to be told that the current commercial climate means outsourcing is always on the agenda, even if no specific areas have yet been selected.

Staff should also be informed as soon as the business case to outsource a particular area has been made. "You then need to consult with and involve the staff who will be affected, even if the boundaries have not yet been finalised, such as whether the helpdesk goes with the desktops." said Stephen Howes, principal consultant at Socitim Consulting.

Other departments in an organisation should also be kept informed. Many IT departments will not inform HR of their outsourcing plans at an early stage.

"The outsourcing project must have a stream of activity that is lead by HR," said Bob Aylott, principal consultant at outsourcing advisory firm Orbys Consulting. "You will need about one HR person full-time for every 100 staff being outsourced."

Once negotiations with a supplier progress there should be a thorough staff consultation before the contract is signed.

This must be genuine and two-way, said Peter Skyte, national officer of union Amicus. "If the contract is already signed, then consultation is a sham," he said.

Consultation can take various forms, such as group workshops and presentations and individual consultation.

Staff concerns will also vary, particularly according to the age of the employee. Older staff have different concerns from younger staff, such as pensions and early retirement rights, said Aylott.

Involving unions can help to allay employees' fears and speeds up negotiations, as unions will have existing knowledge of what employees are worried about, and what questions they want answers to. It can also pave the way for easier future outsourcing, as Barclays' agreement on offshore outsourcing with banking union Unifi in January demonstrates.

The Barclays contract, which was the first of its kind with a trade union, agreed terms and conditions for staff affected by offshore outsourcing. One month later, HSBC signed a similar deal with Unifi, setting a benchmark for offshore outsourcing deals.

A spokesman for Barclays, which signed a £400m IT outsourcing deal with Accenture in June, described the agreement with Unifi as a "unique partnership", which was "incredibly useful".

Once a deal has been agreed, adequate time should be given to allow for the transfer of staff. "Too many companies work backwards from a transfer date, giving a fixed time, say 30 or 90 days, for employees, but they should remember that outsourcing forcibly transfers people from an employer they chose to work for to one they did not. They will be unsettled and concerned about their future. They need reassurance," said Skyte.

Finally, allow staff time to bed in to their new role, whether they have transferred to the supplier or remain in-house. "Don't just tell them to 'carry on as before'," said Howes. "They need some form of induction and to be treated as a new employee. They may be worried about what it's like to work for an outsourcer; will it be more pressured, more intense, more supervised?"
This was last published in October 2004

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