Expert stresses need for careful planning from HR: 'Are we outsourcing because of business continuity plans or better efficiency?'
Recently, Australia’s third-biggest bank announced that it planned to outsource nearly 200 Australian jobs to its operations in the Philippines – a move that could potentially impact customer experience and future workflows, according to one expert.
“Often, organizations will offshore something, and they won't really understand how they're operating in that current state. So, they've got this beautiful future state, these new processes - but they haven't really understood how people in the organization or even customers are interacting with them,” said Caroline Mills, Managing Director of Allegra Consulting.
“Of course, in a situation like that, all of a sudden things can get a little bit awry. Things might not align with the future operating model straight away and that can cause some serious issues. People have very primitive brains – they don’t like uncertainty.”
The decision from Westpac, reported in February, came less than a year since the bank made a similar move with 130 roles outsourced to both the Philippines and India, including 62 roles in the risk department.
The move was condemned by National Secretary of the Finance Sector Union, Julia Angrisano, saying: ““Westpac made $7 billion in profit in the last financial year, a result the CEO said would 'set Westpac up for growth and success’. Is this what ‘growth and success’ looks like for Westpac workers?”
There are a number of things to consider when deciding when to outsource jobs – none bigger than what jobs are getting the chop.
“HR functions are vital in this instance. I’ve never met a team where there isn’t a well-thought-out plan. Are we outsourcing because of business continuity plans or better efficiency? Are we looking for better talent globally that we currently don’t have access to?” Mills told HRD.
It’s also about redeployment plans, she said.
“It’s all about reskilling and giving opportunities to staff and having really strong lines of communication. People underestimate how many times something will have to be repeated. Executives might’ve had 10, 15, 20 conversations about the decision, so it’s important these conversations are sent down to everyone.”
Communication is arguably the most critical aspect of outsourcing and subsequently ensuring all other employees are on-track and aware of new opportunities and expectations, Mills added.
“People love certainty about the future. Outsourcing can sometimes throw that out the window because, if truth be told, we can’t always see what’s going to happen until it’s happened. It can impact people’s psychological safety.”
Mills added that most businesses look at their bottom line when defining success following outsourcing - but measuring skill development and workforce redeployment is much more important.
“I'll be honest, I've seen it work and not work, right? I've been involved in some that have worked and some that haven't,” she said.
“Imagine you're a bank. There's going to be stuff around your projected cost savings, your efficiency, maybe your automation. But there has to be some stuff around service and customer impact – ultimately, it’s all about people.”
Culture and values could be different when you outsource, so it’s important to find the right balance, Mills said.
“Another thing to note is retention both internally and externally as well as where those outsourced jobs are being redeployed. These are all ways that can make the whole process successful as a whole.”
