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Trends in dealing with employee resistance to outsourcing
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Trends in dealing with employee resistance to outsourcing
Time changes most things, but one thing that doesn`t change is people`s actions based on their fear of the unknown. That fear arises among employees when companies announce they are planning to implement an outsourcing arrangement. Jobs are often in jeopardy. And even in cases where people have been told their jobs are not going away, they often think: "This is just the first step; more outsourcing will occur later. Will my job be outsourced the next time?" At the very least, there is anxiety, if not fear.
Outsourcing Center has studied hundreds of such situations through interviews with buyers participating in its annual Outsourcing Excellence Awards program. Reactions to actual or feared job loss range from passive resistance to outright sabotage. Absenteeism due to "illness" increases at such times. Some employees with valuable knowledge quit unexpectedly. Others make the process of knowledge transfer difficult or hinder the setting up of the support structures necessary for outsourcing. Production slows.
Companies must deploy strategies to deal with the resistance and "noise" of unhappy employees in order to prevent hindrances to successfully achieving their goals. In 2004 we published a white paper ("The Fearsome `O` Word") with the findings of our study on the strategies companies were using at that time.
Since the adoption of outsourcing has increased exponentially in nearly all industries and business processes since that time, and offshoring has also become prevalent since 2004, we recently undertook another study to determine the trends in dealing with employee resistance today.
We studied 249 outsourcing relationships participating in the Outsourcing Excellence Awards program from 2005-2009 that were willing to answer survey questions about employee resistance. The study looked at deals where the number of employees whose jobs were impacted ranged from 15 to more than 400 people per company. We found some significant changes in the way companies handle employee resistance today from the way they handled it up to 2004.
Finding #1: Experience makes a difference
Our recent study found that, in companies that had outsourced before, there is less obvious and vocal resistance, and the resistance lasts for a shorter period of time. This is because the company has experience from its prior outsourcing initiatives in dealing with the fears/apprehensions surrounding job security. Moreover, many companies have established an outsourcing center of excellence or project management office that uses lessons learned from prior outsourcing deals to help forge success in future deals.
In companies lacking any prior experience in outsourcing, the study found that the executives were well aware that employee resistance can greatly impact outsourcing success. These companies began researching and/or retaining outsourcing consultants for best practices in dealing with resistance.
Buyers in the study revealed that even if they experienced success in outsourcing IT before, there was still employee (and executive) apprehension when the company undertook its first BPO initiative. Similarly, companies that experienced ITO and BPO successes faced renewed resistance the first time they announced service delivery would be sourced offshore. Then, again, even if they had experienced success with a large offshore provider located in a country such as India, the company faced renewed apprehension from employees and managers or business unit leaders if it planned a subsequent outsourcing arrangement offshore with a small company or one located in a region just emerging as an outsourcing service-delivery locale.
In each of these instances, the buyers stated that an essential component in dealing with the resistance was presenting a clear and robust explanation as to why it chose the particular service provider and presenting evidence that the provider had a proven track record of success.
A significant change since 2004 is a trend for buyers to include among their provider selection criteria the provider`s transition methodology and proof of the provider`s experience in successfully helping other clients manage resistance and similar transitions to outsourcing.
Finding #2: Education facilitates change
Among the strategies that companies use in dealing with employee resistance, there is now a trend toward educating more internal leaders at the buyer organization. This is a step beyond the strategies around communicating the announcement of an impending outsourcing arrangement and is focused on risk mitigation.
Some companies, for example, set up a project management team dedicated to change management associated with their outsourcing initiative. Business process owners and key management personnel comprise the team. The company -- sometimes with the assistance of the provider`s team -- educates the project management team in employee "handholding" through the transition process.......
Source:
http://itonews.eu/en/news/global-news/trends-in-dealing-with-employee/index.html
Outsourcing Center has studied hundreds of such situations through interviews with buyers participating in its annual Outsourcing Excellence Awards program. Reactions to actual or feared job loss range from passive resistance to outright sabotage. Absenteeism due to "illness" increases at such times. Some employees with valuable knowledge quit unexpectedly. Others make the process of knowledge transfer difficult or hinder the setting up of the support structures necessary for outsourcing. Production slows.
Companies must deploy strategies to deal with the resistance and "noise" of unhappy employees in order to prevent hindrances to successfully achieving their goals. In 2004 we published a white paper ("The Fearsome `O` Word") with the findings of our study on the strategies companies were using at that time.
Since the adoption of outsourcing has increased exponentially in nearly all industries and business processes since that time, and offshoring has also become prevalent since 2004, we recently undertook another study to determine the trends in dealing with employee resistance today.
We studied 249 outsourcing relationships participating in the Outsourcing Excellence Awards program from 2005-2009 that were willing to answer survey questions about employee resistance. The study looked at deals where the number of employees whose jobs were impacted ranged from 15 to more than 400 people per company. We found some significant changes in the way companies handle employee resistance today from the way they handled it up to 2004.
Finding #1: Experience makes a difference
Our recent study found that, in companies that had outsourced before, there is less obvious and vocal resistance, and the resistance lasts for a shorter period of time. This is because the company has experience from its prior outsourcing initiatives in dealing with the fears/apprehensions surrounding job security. Moreover, many companies have established an outsourcing center of excellence or project management office that uses lessons learned from prior outsourcing deals to help forge success in future deals.
In companies lacking any prior experience in outsourcing, the study found that the executives were well aware that employee resistance can greatly impact outsourcing success. These companies began researching and/or retaining outsourcing consultants for best practices in dealing with resistance.
Buyers in the study revealed that even if they experienced success in outsourcing IT before, there was still employee (and executive) apprehension when the company undertook its first BPO initiative. Similarly, companies that experienced ITO and BPO successes faced renewed resistance the first time they announced service delivery would be sourced offshore. Then, again, even if they had experienced success with a large offshore provider located in a country such as India, the company faced renewed apprehension from employees and managers or business unit leaders if it planned a subsequent outsourcing arrangement offshore with a small company or one located in a region just emerging as an outsourcing service-delivery locale.
In each of these instances, the buyers stated that an essential component in dealing with the resistance was presenting a clear and robust explanation as to why it chose the particular service provider and presenting evidence that the provider had a proven track record of success.
A significant change since 2004 is a trend for buyers to include among their provider selection criteria the provider`s transition methodology and proof of the provider`s experience in successfully helping other clients manage resistance and similar transitions to outsourcing.
Finding #2: Education facilitates change
Among the strategies that companies use in dealing with employee resistance, there is now a trend toward educating more internal leaders at the buyer organization. This is a step beyond the strategies around communicating the announcement of an impending outsourcing arrangement and is focused on risk mitigation.
Some companies, for example, set up a project management team dedicated to change management associated with their outsourcing initiative. Business process owners and key management personnel comprise the team. The company -- sometimes with the assistance of the provider`s team -- educates the project management team in employee "handholding" through the transition process.......
Source:
http://itonews.eu/en/news/global-news/trends-in-dealing-with-employee/index.html