BP Amoco has saved $100m (£71m) in the past year by outsourcing its HR
department to Californian company Exult.
Dr Tony Hayward, group treasurer of BP Amoco, told senior HR professionals
in London last week that BP has cut its annual spend on HR support from $350m
to $250m since the deal came into operation last summer.
The HR staff-to-employee ratio fell from 1:60 to about 1:150 during the
first year of the five-year contract.
The myHR website is now the company’s second most visited Internet site
after the BP home page, receiving more than 12,000 unique hits a week. Over the
next two years, BP will spend $10m on a new website.
HR transactions are quicker to carry out as a result of the new system.
"A year ago a department wanted to send someone to Azerbijan. It took the
HR group 15 days to figure out what the correct package was," said
"Now any employee can go into it using the new web portal and get
absolute clarity on what their overseas package will be."
BP decided to outsource the transactional activity in the UK and US to Exult
although, as Hayward explained, "It is not about taking BP’s problems and
outsourcing them to someone else to fix."
The delegates at the "Tomorrow’s Organisations" conference,
organised by Create, were told that Exult had to standardise more than 150
different payroll systems and over 40 employee appraisal systems in BP, and
both partners also had to educate staff and line managers on how to use the
Hayward said, "It has been about increasing employee satisfaction.
There was a great deal of dissatisfaction among staff about the quality of
delivery of the HR function."
l Last week’s Personnel Today News Barometer showed that 54 per cent of
respondents do not believe that outsourcing is a more effective way of
Paul Brewer, HR director Europe of telecoms company ETI, said, "I
cannot see anything but trials and tribulations for any company which removes
the HR function to an 0800 number.
"You may not see it straight away but the people you employ will become
less engaged, less motivated and eventually turn-over will reflect this."
By Katie Hawkins