BP Amoco sees HR costs rise a third on outsourcing

The
cost of HR at BP Amoco has risen by a third since the company outsourced its HR
department last year.

The
figures revealed by John Melo, vice-president of downstream digital business at
BP Amoco, raise doubts over the cost cutting benefits of outsourcing and e-HR.

The
oil giant farmed out its HR processing to Exult in mid-2000 and introduced
web-based self-service HR for all employees, but reluctance by employees to use
the new online systems has led to an expensive duplication of methods.

Melo
said long serving staff members were less likely to use the new methods. About
40 per cent of BP Amoco’s employees have been with the company for more than 20
years.

He
said, "The reason why costs are so high is because we have a culture of
operating in a certain way." He added, "We have learned change
management is important, not just e-HR."

The
multinational’s tripling in size over the last three years has led to a
profusion of different HR systems.

With
over 100,000 staff, more than 150 different payroll systems and over 40
employee appraisal systems around the world, the company also wanted to
standardise its processes.   

Melo
said, "We did it because we wanted to make our HR community more value
added, and we felt the processes would be better done by someone else.

"We
also thought the web would be a great way of doing it. In many cases it has
worked, but in many more it hasn’t."

The
company has postponed the global rollout of its self-service HR approach
following the difficulties encountered in the UK and US, and he warned
delegates not to think "too big, too fast".

By Mike Broad

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