Partnership will turn HR into company subsidiary

Aircraft manufacturer BAE Systems is to turn its HR function into a joint partnership with a company claiming to offer an alternative to outsourcing.

BAE will form a partnership with Xchanging, which specialises in turning administrative functions of major groups into “entrepreneurial enterprises”.

The deal will create a new company – yet to be named – providing a full HR service to BAE.

Under the new deal, the HR function will be converted into a majority-owned subsidiary. BAE, which employs more than 100,000 people worldwide, will retain control of overall HR strategy.

The deal will revolve around an Internet-based HR service provided by Xchanging called peopleportal.

Terry Morgan, BAE’s group HR director, said, “After a comprehensive study on transforming the way we deliver HR services to our employees and to the company, we decided that Xchanging has the most compelling vision and deep understanding of how this service can be improved.

“This new enterprise provides a real opportunity to give clear HR support to the key business drivers while creating career opportunities for our HR professionals.”

Xchanging is a start-up company founded last year by David Andrews, a former Andersen Consulting president for Western Europe. For every partnership signed with the administrative department of a large group Xchanging invests more than £6m and receives 25 per cent of the profit from the new subsidiary.

Andrews also claims his secure Internet-based systems are more efficient and produce fewer delays than conventional office systems.

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