With 2008 set to be a big year for the profession, outsourcing will be high on every human resources director’s list of things to do, according to Capita’s managing director Wayne Story.
Like global warming, falling house prices and blogging, HR outsourcing is no longer the next big thing – it is part of everyday business life.
Provider Capita HR Solutions laid much of the hype, speculation and counter-arguments over the take-off of third-party people management to rest in 2007 with a record set of annual results, bolstered by deals with the BBC, Fujitsu, and Dixons’ parent company DSG International.
Culture of success
The man behind it all, the firm’s managing director Wayne Story, is not surprised. In fact, he believes this year’s results will be even better. “There is a culture of success at Capita,” he said. “2008 will be bigger than 2007 for the HR businesses. HR outsourcing is on every HR director’s list of things to do. It has to be driven by the business case though – the right partner at the right time, for the right reasons.”
All the companies in the FTSE 250 are looking to get these key ingredients in place, according to Story. But it is not only the private sector that is attracted to the proposition, he said.
In 2007, Capita was named preferred bidder for contracts at three government departments.
This outsourcing wave, now a multi-billion pound industry worldwide, is driven by a desire to minimise costs, allow the in-house HR team to concentrate on proactive rather than reactive policy, and – critically – better measure outcomes, Story believes.
“People want expertise and consistency,” he said. “All outsourcing contracts are measured. There is a degree of transparency with service levels and financial rewards and penalties. It is much more difficult to measure performance internally and put in penalties.”
Story believes Capita is in a prime position to take advantage of this growing market because of the culture it has created among its staff. “We treat people as entrepreneurs,” the former management trainer said. “We value their contribution, and that is a big driver for behaviour. We are focused on performance and enthusiasm – the culture is very good and we manage the business to drive that culture.”
Of course, it has not all been plain sailing. The BBC contract caused a great deal of negative publicity, with trade union protests against moving HR jobs from England and Wales to Northern Ireland.
“We took 250 employees from the BBC and centralised them to Belfast, but we left a local presence in the regions, with all client-facing jobs still there,” Story said. “Everyone had the same opportunities and a number have left Capita and returned to the BBC.”
It was claimed earlier this year that none of the staff Capita took from the BBC were still working on the contract in Belfast. “That’s not true,” said Story. “Some people we transferred from London are still on that contract. But many people joined the BBC in HR positions to get into jobs outside HR, and have returned to the BBC.”
Story stopped short of hailing the controversial contract as a success, however. “It is improving over time,” he said. “It is a big change for both organisations. When you take on an outsourcing contract, it takes a long time to bed down.”
Nonetheless, Story is delighted to be heading up Capita’s HR outsourcing business at this time. His career is firmly rooted in the banking industry, although it has a strong people management thread running through it. “I left school at 16 and took a job as a cashier in the local branch of TSB,” he said. “I did not have a career in mind, but my sister worked in the bank and an opportunity came up and it led into a career.”
In his 16 years at TSB, Story moved up the ranks and eventually became manager. In 1986, he moved to London as a relief manager, and 18 months later, he was sales and management trainer at the bank’s training college.
“I became a people manager at the time when banks were changing, and TSB was changing its staff into proactive retail staff rather than reactive cashiers,” he said.
Story then followed a more HR-focused career path, which saw him training ex-NHS dentists in a new way of working at private healthcare firm Axa PPP, and spending substantial periods in Hong Kong and Thailand as a consultant. Finally, a stint at Blue Arrow recruitment led to a contract supplying staff to Capita, eventually leading to his current job in 2005.
“I reflect on all these periods all the time,” he said. “Every organisation is different and it all helps with the current challenges at Capita. The more you understand difference, the easier you can get the best out of people and manage change.”
May 2005 to present – Managing director, Capita HR Solutions
February 2002 to March 2005 – Managing director, Blue Arrow
November 1998 to February 2002 – Managing consultant, PA Consulting
November 1994 to November 1997 – Director of sales, service and marketing, AXA PPP Healthcare Dental Division
1978 to November 1994 – Various roles, TSB