HP drops outsourcing bids to avoid IT unions

Unions representing IT professionals have responded angrily to insider reports that Hewlett-Packard has tried to bypass IT trade...

Unions representing IT professionals have responded angrily to insider reports that Hewlett-Packard has tried to bypass IT trade unions when bidding for outsourcing contracts.

Computer Weekly has learned that HP has pulled out of the bidding process for two major outsourcing deals because IT staff at the potential customer's company are union members.

A senior HP source confirmed that it had recently pulled out of negotiations for a desktop outsourcing contract with Barclays, which was won by EDS, because it did not want to negotiate with union leaders at the bank.

HP, which is keen to expand into the lucrative outsourcing market, has also pulled out of the first round of the bidding process for a contract to supply part of National Grid Transco's IT operations, due partly to concerns about union representation.

Given that unions are usually an important part of the negotiating process for proposed outsourcing deals in both the private and the public sector, outsourcing experts said that HP's controversial approach could hamper its efforts to expand in the sector.

Union leaders said HP's alleged anti-union stance would alarm some IT staff faced with the prospect of transferring to the supplier. They claimed that all the leading outsourcing suppliers have a track record of working closely with unions before and after an outsourcing contract has been signed.

"This is a wake-up call to all employees faced with the prospect of being transferred to HP," said Peter Skyte, national secretary of union Amicus-MSF.

"This would imply that HP does not want to deal with unions because it feels it would not be able to impose terms and conditions if it has to go through a union."

Outsourcing experts also expressed surprise at HP's policy. "If HP's [attitude to unions] is an internal unwritten policy then it has no chance whatsoever of succeeding in the outsourcing market," said Robert Morgan, chief executive of outsourcing advisory firm Morgan Chambers. "Every supplier I have worked with will recognise any union."

Unease about HP's reported anti-union stance comes as it faces strike action over a proposed £600m seven-year outsourcing deal with the Bank of Ireland. Earlier this week, the Irish Bank Officials' Association announced its intention to take one-day strike action later this month over the proposed deal with HP unless concerns about job security are met.

Since its merger with Compaq in 2000, HP has been keen to secure a place in the premier league of outsourcing suppliers and to diversify away from its hardware roots.

HP has clinched a number of outsourcing "mega deals" over the past few years, including a contract with Procter & Gamble in April valued at £1.9bn over 10 years and a $1.5bn (£1m) outsourcing deal with the Canadian Imperial Bank of Commerce.

In the past year, IT outsourcing deals, whether in the UK or offshore in countries such as India, have become increasingly controversial. Unions are looking to boost their membership among the IT workforce, campaigning on issues of job security and pension rights for outsourced staff and ensuring that UK employers do not move IT operations offshore as an excuse to skimp on training.

A spokeswoman for HP in the UK declined to comment on the withdrawal from the Barclays and National Grid Transco outsourcing bidding but said that HP looked at each deal on its own merits and did not have a policy on unions.


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