Threatened action over outsourcing

Union chiefs from Amicus, the trade union representing white-collar workers from the financial services industry, are considering whether to take industrial action over offshoring by banks and finance companies.

Representatives of HSBC workers are considering what action can be taken against the 3,500 job losses there. Amicus is reported as saying that HSBC are showing increasing discontent at having to rectify mistakes made by overseas workers. Anger amongst staff is soaring as they see executive pay and benefits rocketing and have paid for it with wage freezes, pension scheme cuts and the fear of potentially having their job offshored half way across the world.

National Outsourcing Association

The National Outsourcing Association, Europe's first association for 'effective business and process outsourcing', said: "There's no denying that cost is the primary driver when it comes to the decision to outsource, no matter what the financial services companies say. Having a business process done for the fraction of the cost in Mumbai can be tempting for any company trying to maximise their budgets. But it should not be done to the detriment of the company, its staff and its shareholders.

"The mistake that many companies are making are:

• Not understanding their business processes properly: when they offshore call centre work, bosses could be oversimplifying the work of their staff in the UK, if they think it's simply a matter of picking up operations here in the UK and dumping them in Bangalore.
  
• Undervaluing UK staff: not understanding UK processes correctly, means bosses are undervaluing UK workers' jobs and their contribution to the company. Companies need to realise that UK staff are part of the process - teamwork, experience, cultural understanding - these are all intrinsic values that build the service. To simply strip this away can be highly damaging to the service companies are offering. Companies have to be very careful that they are showing they value their UK teams and that they maximise this very precious resource - to risk losing it could damage their business irrevocably.
  
• Short termism: short term cost savings may well be tempting but they are not the answer, especially if the fat cats are seen to be ploughing these savings straight into their bonus schemes - this is bad for the morale of the company and can have a negative effect on level and quality of service.

"There is a place for offshoring in business and the rise in globalisation signals that it is a practice that will increase. But it must be managed correctly and damage to UK staff must be minimised. It can be highly detrimental to banks, financially and in terms of reputation, if they are to up sticks, move operations to India and then have to move back again due to poor service. Redeploying staff within the organisation, understanding cultural differences and training offshore employees to the maximum will all help to smooth the bumpy path of offshoring if it's a road the company chooses to follow."