BP figures cast doubt on budget benefits of outsourcing

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

The
figures, revealed by John Melo, vice-president of downstream digital business
at BP Amoco, at the CIPD’s conference in Harrogate, 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 line managers
to use the new online systems has led to an expensive duplication of methods.

Melo
said long-serving staff members were more reluctant 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 more history and baggage a company has, the more difficult it
is to complete the transition. People are accustomed to doing things in a
certain way.

"We
have learned that it is change management that is important, not just
e-HR."

By Mike Broad

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