Find out the pluses and minuses of joining an IT services company
What impact will outsourcing have on your career? The positive view is summed up by the human resources director at services group Capgemini, Robert Ingram, who says, "You move from an overhead to a revenue earner, and all the career opportunities are now in your field."
But there are dangers, says employment law specialist James Carmody, head of Reculver Solicitors, who advises, "If you think you could be outsourced some time, joining a union or taking out legal expenses insurance could prove to be a wise move."
For most staff, the reality will lie between these two views - and in the early days, uncertainty will colour the experience.
"When you're told you're going to be outsourced, you tend to idealise the present and demonise the future - even though the present may not be ideal and the future may be very good," says Ingram at Capgemini. "It's human nature to be nervous or even angry about people and a situation you don't know."
Concerns may go beyond IT, says Bill Grubbs, chief operating officer at the Spring recruitment company and vice-chairman of the Recruitment and Employment Confederation's IT and communications group.
"You might have joined your employer for a reason, such as employer brand, culture or the industry it's in," says Grubbs. "In such cases, being outsourced can feel almost like forced labour. Even if you're still in the same office, you might not be doing the same job and you'll be working for a different company - and you didn't choose it."
Adrian Selby, assistant manager in technical support at Lloyds TSB, had some of these feelings when his team was transferred to Fujitsu Services in May.
"I was overwhelmed by unknowns," he says. "I started at the bank straight from A-levels. What would it be like working for someone else, in a different sector? What would it mean for my pension?"
Selby says that as he found out that he would stay in Bristol, that the pension scheme was comparable, and that Fujitsu Services' range and number of clients meant career opportunities, he became increasingly comfortable about the transfer.
"Working for an IT company, especially one as big as this, means more opportunities nationally and internationally as well as close to home," says Selby. "Non-IT companies may have pockets of IT staff dotted around, which may make a major move inevitable to progress your career."
Capgemini says it provides as much detailed information as possible to staff transferring. This includes allowing the potential joiners to meet people already in the company who joined through previous contracts. It typically enables people to stay in the same town or area, if not the same office, but also provides opportunities to change career and location if they wish. It recognises three major unions: several thousand staff have brought union membership with them.
Much of this is good practice but companies are obliged under the Transfer of Undertakings (Protection of Employment) (TUPE) regulations to offer terms and conditions that match or better those of the previous employer: at Capgemini, staff can pick benefits from a list.
"We sometimes get a few people who continue to lament the old days, but the vast majority are fine," says Ingram. "We don't find people leaving after a few months."
So why is Carmody at Reculver Solicitors cautious? He even agrees that "many employees find themselves with better terms and conditions and better job prospects".
But he warns, "Your new employer is under no obligation to offer an equivalent pension under TUPE. In addition, the question of whether TUPE applies is hideously complicated. The company may deny it, resulting in redundancy. Even if everyone agrees that TUPE applies, the company may come up with a potentially fair technical or economic reason for reorganising you out of your job."
The Amicus union offers another note of caution. "Staff need to look at the longer term," says national officer Peter Skyte. "Services companies tend to make their profit towards the end of a contract - and the trend is away from megadeals to contracts of three to five years, perhaps with mid-term reviews. This means suppliers could be looking to cut costs on a contract as it progresses. They might contract out some low-margin aspects such as desktop support to another supplier, possibly a smaller company. We're now dealing with some people who have been outsourced and then onsourced three or four times in 10 years."
Skyte adds, "There is some validity in the argument that if you work for an IT company there are more opportunities, but does this apply to everyone? The market trends, especially towards shorter contracts, mean we're increasingly aware of people who have not had a pay rise for some years."
Ingram at Capgemini acknowledges the potential pitfalls, but he returns again to the opportunities. "At a non-IT company, you might be one in 50 in IT," he says. "With us you're one in 8,500 in the UK alone - and potentially you could go for any of those jobs - or 60,000 worldwide - without changing employer."
Checklist for job movers
- Know your rights, especially the TUPE provisions
- Research the supplier
- Ask about pay and conditions
- Seek assurances on job security - long-term and short-term: consider the contract length
- Ask about recognition of your union
- Ask about location and likelihood of relocation
- Look into career opportunities in the supplier
- Ask about the supplier's staff turnover rate
- Try to find out the experiences of staff who have been transferred to the supplier
- Ask for details of the contract and service level agreement
Based on Amicus union advice
Case study: the outsourcing experience
Les Lobo (right) was initially unhappy about joining services group Capgemini from RHM Foods, but he now sees it as a good career move. After looking for other jobs, he joined as a network technician and is now operations manager at the network service management centre.
He saw the benefits of working for an IT company quickly: three pay rises in a year: "I guessed my pay was being brought up to IT industry standards rather than compared with the food industry. It has increased annually in line with the industry and business needs.
"I have had five promotions, whereas at RHM Foods I might have been waiting for someone to move on."
Lobo worked on the RHM Foods contract, but that ended and he has since progressed through network management and network design and roll-out.
"There are definitely advantages in working for a services company: variety, opportunities to work on latest infrastructures, and development into non-IT disciplines such as human resources and sales," he says.
Longer hours are sometimes expected, usually around short-term peaks in client demand, he says. "There has been more stress in my senior roles, but that comes with responsibilities and the deadlines sometimes set by customers.
"In general the advantages outweigh the disadvantages, especially as the company has recognised the longer hours and stress and taken steps to address them."
He adds, "Seventeen years with one company is unusual in IT. I would not have gained all my skills working for a company with a single-vendor infrastructure and whose core business was not IT."