Consignia to outsource OH in first step contract

Consignia is about to outsource its occupational health provision to
SchlumbergerSema in a £70m deal that represents its first step towards farming
out all HR administration.

The five-year contract will see the French conglomerate provide all
Consignia’s occupational health services, including pre-recruitment
assessments, ill-health referrals and medical retirement assessments.

SchlumbergerSema will be providing OH services within three months, assuming
that the contract is signed this week, and it will commit £5m to updating
Consignia’s occupational health systems.

It is the start of Consignia’s support services outsourcing plan, which will
culminate in the third party provision of HR administration and facilities
management. Consignia hopes to save £60m a year.

The outsourcing programme is a fundamental part of the firm’s three year
renewal plan to bring the company back in to profit. Consignia is currently
losing £1.5m a day.

The deal involves 240 OH staff who will transfer under Tupe to
SchlumbergerSema. The company’s chief medical adviser will remain employed by
Consignia to co-ordinate OH strategy.

Gerry Smith, managing director of services group at Consignia – with overall
responsibility for OH – said that the deal will improve the company’s OH
facilities as well as save money.

He said: "The principle benefit of the deal is to avoid the investment
in OH that is needed to keep it at a high level of service. A further high
level of investment is needed to update the company’s system for which
Consignia will not have to pay for.

"The move also means we can have variability in the number of OH staff
the company needs. It will also improve the staff’s skills and gives Consignia
access to OH skills that are very difficult to recruit in-house," he
added.

By Paul Nelson

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