Managers call for rethink on offshoring

Failure to involve human resources (HR) professionals when moving IT and business functions offshore is contributing to low staff morale at many firms that have adopted the model, according to a new survey.

Almost 600 organisations were questioned for the research, published last month by the Chartered Institute of Personnel and Development (CIPD). Forty-two percent said they did not involve their HR department when making decisions about offshoring.

Report author Ben Wilmott of the CIPD said this lack of consultation was one reason why over half of those surveyed believed offshoring lowered staff morale and 48 percent claimed it was harder to manage the performance of the offshored functions. “People management needs to be at the forefront of your mind when offshoring,”

Wilmott argued. “Issues like the state of the labour market in the offshore location or staff reaction in the UK can determine the success or failure of an offshoring project.” Wilmott added that by using HR expertise earlier in the process firms could head off potential problems by drawing up plans for redeployment of staff whose roles are offshored, identifying training needs, researching offshore job markets, and engaging in early negotiation with unions.

Samad Masood of analyst firm Ovum said underestimating the importance of staff relations when offshoring is a relatively common mistake. “We have already seen quite a few UK businesses that have offshored and then had unions turn on them because they haven’t informed staff properly,” Masood said. “This results in not only poor staff morale but also bad PR.”