The BBC is one of my favourite organisations – and not just because it strives to be the most creative organisation in the world. People care about the BBC. Just about every household in the UK is a stakeholder. The brand is synonymous with being British. It is part of our national DNA, be it EastEnders, Newsnight, Choral Evensong or Steve Wright in the Afternoon.
This unique position represents a major challenge to the BBC’s HR function. So Stephen Dando, chief executive of the BBC’s People function, has decided to partner with a major HR outsourcing player to drive the HR offering of the BBC up the value chain. This is expected to be his last major contribution to the BBC before leaving for Reuters. The new director of people will step into a very fast car known as HR outsourcing. The probability of the inexperienced crashing at the first bend is high. Crucially, he or she will be driving with a set-up not of their choosing, unless the BBC recruits in-house.
Making sure that stars get paid and hotels and flights are booked can all be handled by today’s sophisticated technology platforms at a fraction of the in-house costs and are certainly not things the new incumbent will need to worry about. But if the new director of people really wants to make an impact it will be in engaging the BBC’s staff to undertake yet another change programme against the backdrop of more projected cuts: £20m has already been taken off HR’s cost base of £80m in the past three years, a 20% reduction of BBC People employees bringing the total down to 1,000. In the next three years this is set to fall to just 450, with about 260 people being outsourced, and 180 jobs going in redundancies or redeployment.
The organisations that reached the outsourcing shortlist may be indicative of the BBC’s thinking. One is a major player in outsourcing with more than 100,000 employees, many housed in administration centres in Eastern Europe and Asia. Another is a large-scale public sector-focused supplier. Both will offer huge economies of scale. Whether the BBC’s own distinctive culture will survive such a transition is, however, a moot point. Do we really want to see the department that is critical to developing the people who construct the BBC’s world-class offering subjected to the short sightedness of cost-cutting?
If I were the new director of people, I would probably hope the contract would go to the smallest of the shortlisted firms. At just five years old and with only 3,000 employees, its offering would be shaped by the BBC’s HR team, who might otherwise simply be obliterated by it in the name of improving the bottom line.
Transformation can, and has, taken place in HR outsourcing deals. Although many suppliers do not allow independent scrutiny of their offerings, I have spoken to HR professionals at this smaller organisation. Their experiences do appear to be comprehensively distinctive from those of the other shortlisted suppliers. Transferred employees said that they wished HR had been like this 25 years ago.
I know there are few things worse than the evangelical ramblings of those who have undergone a spiritual conversion so I have spent the past 30 months researching the performance underpinning the claims behind this organisation’s “service first” premise. The results have been promising. Our data has detected a genuine financial contribution to the business performance of client businesses in multiple contracts through this release of the entrepreneurial energy of transferred employees. What might be the peripheral back office to some is the meaning of life to others.
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A failure on the part of the new director of people would be tantamount to missing the HR out of HR outsourcing.
Anthony Hesketh, Lancaster University Management School
