Outsourcing helps BAe to cut HR costs

BAe Systems has significantly cut costs while improving service and its IT
capability since it outsourced its HR function a year ago, delegates heard.

Alan Bailey and Richard Houghton of HR services company Xchanging, BAe’s
outsourcing partner, believe good progress has been made in the 12 months since
the two company’s agreed an £800m, 10-year deal.

Houghton said Xchanging had helped BAe achieve a 10 per cent saving in HR
costs and a radical improvement in service in a number of key areas including
graduate recruitment, international assignments and pensions.

More than 500 BAe HR staff involved in transactional roles transferred to
Xchanging under TUPE regulations. Almost 200 HR business partners and
specialists will continue to drive the BAe’s strategy and policies and
industrial relations has also been retained within the company as this is seen
as strategically important.

Working from two centres in Farnborough and Preston the outsourced HR staff
provide services for training and development, remuneration and benefits,
recruitment and international assignments.

Most of the services are available via a self-service people portal on the
company’s intranet, which is used by 43,000 UK-based BAe staff.

The intranet has also been used for the successful introduction of the
firm’s global performance management programme for its top 6,000 managers,
including an online peer review element.

Xchanging has already spent £6.5 million in upgrading BAe’s IT systems, with
nearly £14 million of further investment in this area in the pipeline.

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