Notel Networks is to serve the HR needs of its 20,000 staff in Europe from a
call centre in north London. Mike Broad
analyses the challenges of delivering HR to 20 countries from one site
Telecoms giant Nortel Networks has taken the next step in HR outsourcing and
the HRworld is watching carefully. Earlier this month, it launched an
outsourcing deal with PricewaterhouseCoopers which will provide HR services to
20,000 Euro- pean staff (News, 12 June).
PwC has opened an HR service centre in Potters Bar, Hertfordshire, to serve
the telecoms employees in 22 countries from a single point of delivery. It is
the first outsourced contract to deliver to such a wide audience.
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 that
it can be done."
Nortel wanted to outsource its HR administration to cut costs and increase
the strategic role of its senior HR staff.
Ray Patterson, director of corporate services, relationships and performance
management at Nortel Networks, said that the company wanted to
"unleash" HR’s business contribution.
He said, "The cost element was important, but it’s also been important
to take management focus away from the supporting infrastructure.
"We wanted to focus on core competencies and when you have a large
corporation you develop large back office entities. We took a strategic
decision to move out of manufacturing on most product lines, for instance.
"It then seemed right to look at back-office functions and bring them
to a higher level of consistency we couldn’t do ourselves."
With PwC offering savings of 15 to 30 per cent, the European HR deal was
finalised in April and went live this month.
It is a significant part of a five year, $600m (£429m) global contract
between Nortel and PwC, signed last May, to provide supply management,
procurement, financial, learning and resourcing services.
The first challenge for PwC was to standardise HR processes across Europe.
It re-engineered 52 HR processes and cut them to 31 core functions. Only 15 per
cent of these now have a country-specific element, which paved the way for the
transfer of their provision to single point of delivery in the UK.
As part of the changes, Nortel Networks transferred100 HR staff to PwC’s
service centre in Potters Bar last month.
But Koch stressed that the logistics of the transfer were not the biggest
challenge. He said, "Legally, you’ve got to deal with data protection,
Tupe and those issues, but the biggest challenge is the cultural one. Can they
really deliver this service? Do I really want to let the service go
outside?"
PwC had to put time and effort into building relationships with the HR
managers in each country, to convince them that the service could be delivered
remotely.
It has also had to redefine the transferred staff’s approach to business. As
employees of PwC, they will provide HR services to Nortel – the client – and
other potential clients.
Steve Bayliffe, European director of employee services at PwC, who heads up
the HR service centre, said, "The transferred HR staff have moved from the
back room to becoming revenue earners, with greatly increased customer contact
and awareness.
"We’ll make our money by letting people go and make efficiencies and
then selling our excess capacity to other clients. The challenge at the moment
is the sales pipeline."
He has provided staff with extensive customer-awareness training, and four
ex-Nortel staff now provide HR services for 2,500 employees of Equifax, another
PwC client.
To encourage the retention of HR staff, the service centre was located
within 10 miles of the former base of Nortel’s UK HR team, in New Southgate,
North London. There has only been a 10 per cent fallout in HR staff so far.
European HR staff transferring to the UK received additional training.
Bayliffe said, "We make sure they get a thorough understanding of the
business. The Europeans spent several weeks in a Nortel facility in their home
country before they came back to the UK as part of the programme.
"The programme is aimed at employees understanding the process,
customer priorities and culture of Nortel."
Bayliffe is in the process of recruiting 23 multilingual HR administration
specialists by the end of the year to handle HR enquiries from all around
Europe.
It has provided a number of graduates with their first opportunity to work
in HR. Bayliffe said, "We thought we would get people with customer
service and language skills, and then we would have to train them up in HR.
"What we’ve found is graduates in an HR-related discipline, who were
finding it difficult to get jobs in the profession. They didn’t have enough
experience in the UK to get a job. We can provide them with that first step
up."
European staff can access the HR service centre by e-mail or phone. The
linguists are the first line of service. If it is a non-complex HR problem,
such as a change in personal details, they will deal with the call, but they
have expert HR support if the request is more complicated.
PwC has increased its management team at the service centre to five, with the
recent addition of Nigel Connolly, the former HR director of Easyjet.
Wendell Sherrell, vice-president of HR services Europe, stresses that the
200 HR staff in Europe will be retained for more complex HR support services,
such as succession planning and recruitment, in their countries. There are also
21 strategic HR business partners to advise senior managers within Nortel.
As the relationship beds down, PwC intends to increase the service levels it
is providing to Nortel and widen its customer base.
Bayliffe said, "In three or four years’ time, we’ll have a set of
processes that are off-the-shelf, easily accessible and understood and good
service levels."
For Nortel Networks, the benefits in a difficult telecoms market are a
renewed focus on its core business. Patterson said, "When we need to
induce a change, we can ask PwC to do it and it has to go through the pain. We
are now much more focused on outcomes than we were."
