Cuts must not be at the expense of HR

The outsourcing bandwagon picked up speed this week when Nortel Networks
jumped on by launching a deal with PricewaterhouseCoopers. The contract will
see 100 HR staff move to a service centre covering all of Nortel’s 20,000
European employees.

The deal is the latest in a series of outsourcing contracts that are
changing the landscape of HR, and all the signs are that many other
organisations are likely to take the same route.

Like other outsourcing projects, the objectives of the Nortel deal were cost
efficiencies and freeing up HR to act strategically. This is fine in principle,
but it is important to monitor whether any cracks appear in the outsourcing
movement’s façade in the months to come. Among employees in those companies
that have grasped the nettle, there are already grumbles about how the new HR
is too impersonal and remote. There is also a danger that line managers on the
receiving end of e-enabled HR and call centre helplines might feel too much of
the grunge of traditional HR is being passed their way.

In this issue of Personnel Today, Chris Matchan, HR director of the Pentland
Group, makes the point that outsourced HR may not be the solution when
companies are going through mergers or acquisitions.

As Matchen says, it is just at this time when people want to address their
concerns to a human face rather than dial an 0800 number in a service centre.

It is up to those who remain in core HR roles to use their new strategic
remit to ensure that such quibbles remain teething problems of the outsourcing
revolution. If they do not, outsourcing will be simply buying cost savings at
the expense of good HR.

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