Outsourcing: more questions than answers

When she was Prime Minister, Margaret Thatcher singled out Lord Young, one-time Secretary of State at the DTI, as the person who came to her with solutions rather than problems. At the Labour Party Conference, three trade unions clearly identified the problems associated with outsourcing and the solutions which would not be acceptable - but were lacking when it came to offering a real solution to what they now perceive to be a growing problem.

Roger Lyons from Amicus-MSF, Ed Sweeney from UNIFI and Jeannie Drake from the Communication Workers Union shared their concerns in a fringe meeting 'The UK call centre industry - threats or opportunities?'.

Problems

The problems were clearly identifiable:

• working in and with emerging economies was cheaper than in the UK and other Western nations;
  
• there is a supply of well-educated, technically literate people in the emerging economies;
  
• big companies were looking for short term savings;
  
• advances in technology meant that thousands of jobs and entire sectors of industry could be relocated;
  
• time and geography were no longer barriers;
  
• just as manufacturing was relocated to the cheapest area in the past - so the 'new' industries were following;
  
• this was a growing problem - while India currently dominated the outsourcing industry, it was expected that China and other nations would follow;
  
• the emerging nations were aggressively marketing the benefits of relocating call centres and many other IT functions;
  
• corporate organisations were not only 'shipping out' existing functions - but were planning new projects and expansions overseas, creating a situation where future jobs are 'lost' to the UK before they ever exist.

Not the answer

The panel had no difficulties in identifying what they did not believe were workable solutions:

• the UK could not be protectionist;
  
• the UK must abide by 'fair' international laws;
  
• it was impossible to attempt, King Canute-style, to stem the tide of globalisation.

CWU

Jeannie Drake from the CWU spoke at length about the frustration at being unable to enter meaningful discussion with big companies before they had already reached a decision to outsource. She felt that large companies presented the unions with a 'fait accompli' after the decision had been taken to opt for, what she described as 'the low road' - without giving due consideration to 'the high road', including retraining.

She said: "If they don't talk to us, we can't offer solutions. They do not embrace us in the dialogue. They take unilateral decisions about outsourcing existing streams of work and jobs - as well as new areas of work we are hoping to get into.

"We need to challenge some of the fundamentals. Global competition has undergone a step change. New technology makes many areas of work relocatable to anywhere in the world at, literally, the switch of a button. We now face a different competitive model than we thought.

"But this isn't going to fade away. Nor is it restricted to low-skilled work. It is wrong to think this is just a challenge at a low skilled level.

"The challenge for us as unions, and for Government, is how do we compete to maintain growth? All economies, including developing nations are entitled to compete. Protectionism is not the answer.

"Raising the skills level is essential and necessary, but it is not in itself enough. We need to challenge the business model so companies can't unilaterally decide to follow the lowest cost route. We don't accept that it is inevitable."

"This is not just happening in India. The challenge will also be from China, Africa and Asia - anywhere that can establish technology and a workforce.

Amicus

Roger Lyons from Amicus saw problems ahead with the practicalities of shipping work overseas. He said: "These countries can provide bright young graduates who work for less, but they have to work at nights to meet the time issues and they will find themselves in a position with a high turnover of staff.

"We need to fight to stop redundancies in the UK and find ways to skill up people. Together we can do so much better than we can apart."

UNIFI

Ed Sweeney from UNIFI described outsourcing as a 'double whammy' for some groups already under pressure, such as 'heartland' areas where there were already job shortages and for women who wanted to do this type of work, particularly in call centres.

Your chance to have your say to the Trade and Industry Select Committee

UKTECH is co-ordinating a response from members of its network of freelancers to an inquiry into outsourcing currently being undertaken by the Trade and Industry Select Committee.

More information about how to participate in the consultation is available here:

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