Nortel outsources HR in pan-European deal

Nortel
Networks launched a landmark outsourcing deal with Pricewaterhouse-Coopers last
week which will provide HR services to 20,000 European staff.

PwC opened a bespoke HR service centre in Potters Bar, Hertfordshire, as
part of the £50m contract, and will provide compensation and benefits,
resourcing, training, and payroll services for the telecoms giant. It has taken
on over 100 of Nortel’s HR staff.

The five-year contract is the first to offer such a multinational HR
service, which will serve employees in 22 countries, from a single point of
delivery.

Ray Patterson, director of corporate services, relationships and performance
management of Nortel Networks, explained that the company wanted to cut costs
and increase the strategic role of senior HR managers.

Patterson said, "We wanted to focus on core competencies, so we took a
strategic decision to move out of manufacturing on most product lines, for
instance.

"It also seemed right to look at back-office functions and bring them
to a level of professionalism we could not do ourselves. We are now more
focused on outcomes."

PwC is offering Nortel HR savings of 15 to 30 per cent. It is a significant
part of a $600m global contract signed last May to provide supply management,
procurement, financial, learning and resourcing services.

David Koch, director of business process outsourcing at PwC, said,
"Employers all ask the question, ‘How can I deliver services from a single
call centre?’ It is the European dilemma; with this deal we are showing this
can be done."

The company has retained 21 strategic HR business partners to advise senior
managers, said Wendell Sherrell, Nortel’s vice-president of HR services Europe.

Nortel has 300 HR staff in Europe. It is going through a period of
assessment, and Sherrell anticipates further "efficiencies" will be
made. He believes there has been only a 10 per cent fall-out in HR staff so
far.

To encourage the retention of HR staff, the new service centre was located
within 10 miles of the former base for Nortel’s UK HR team, in New Southgate,
north London.

By Mike Broad

Big HR outsourcing deals

BP Amoco/Exult
$600m HR contract that includes the provision of HR services and employee
development, for BP Amoco in both the US and UK. The five-year contract was
signed in mid-2000.

BAE Systems/Xchanging
£100m contract per year, which supplies HR services in the UK through an
alliance company. Operational since July 2000, the specialist company will sell
services to third parties.

BT/Accenture
Created e-peopleserve to supply HR services to 120,000 BT staff and 220,000
pensioners. It offers other clients equity in the joint venture company and was
launched June 2000.

To be announced/Andersen
Andersen has been working with an as yet unnamed global service provision
partner for two years to develop a new outsourcing model.

More on BP Amoco/Exult in Employers’ Law magazine

The BP Amoco outsourcing deal will be covered in detail in the July 2001 edition
of Employers’ Law in an article written by Margaret Harvey who led
the HR function to Exult. To subscribe to Employers’ Law click here.

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