Outsourcing: no fun for the soon forgotten

In today’s sourcing business, many people just love to evangelize on the realities of the cut-throat global business climate to greedy executives, eager to hit profitability targets.

However, the one time I can truly tell you this is a highly sensitive and (often) harsh business, is when I have had to trawl the offices of organizations to spend time with staff whose jobs were clearly on the line.  I had to reassure them they had to “get on the train” and go through a detailed activity analysis of their day-to-day job, so we could document how to replicate some (or all) of their tasks for someone to conduct in some lower-wage location.  I can honestly tell you my experiences in the field will stay with me thoughout my career… and beyond.   It’s one thing actually firing someone – that’s a 15 minute cut-and-dried conversation –  however, convincing someone they have to help train their potential offshore replacement is another conversation entirely!

Our new contributing analyst, Deborah Kops (visit her website at www.sourcingchange.com), gives us some practical advice on how to tackle these change management issues with sensitivity and practicality.  Over to you, Debs:

Outsourcing Change Management: No fun for the soon forgotten

Most religions have a name for the deliberate avoidance of association with, and the habitual isolation of, an individual or group. Jehovah’s Witnesses call it disfellowshipping; Jews call it cherem; Wiccans call it reculement, and the Amish call it medung, or avoidance.  Whatever it’s called, the implicit ostracism that those who are politely called “affected staff” feel as a result of outsourcing is destructive—to them, to the retained staff, and ultimately to the success of the sourcing.

Deborah Kops, HfS Contributing Analyst

Deborah Kops, Contributing Analyst, HfS Research (click for bio)

Whether our jobs have been outsourced or not, many of us have experienced the workplace version of shunning. The scenarios look something like this: you’re on someone’s list for termination; or Sally got the promotion rather than you; or the organization’s being downsized and there is not an easily identifiable role for you. Sometimes we know intuitively because the boss and his henchmen become less cordial, or cannot look you in the eye, or omit to invite you to the weekly meeting; in other situations, you’ve been told you might be restructured but the jury’s still out. In any event, if you show any distress or your performance declines, management quickly uses your behavior to justify whatever decision they have made about your future. And that very same management writes you off their proverbial books, already moving on to the next business challenge.

Outsourcing is the only business change I know where employees are told their jobs are moving offshore, yet they are expected be good really sports and continue to process checks/answer calls/manage claims until the day they are escorted out the door, personal effects in arms. And our managers think their “restructuring” tasks are over, and it’s on to making sure the transition doesn’t go pear-shaped.

While we all sympathize with the pain of the affected staff, few organizations train their managers to deal with the fine art of making teams redundant and keeping productivity high in preparation for a change in business architecture like outsourcing.  And the task isn’t something we can toss over the transom to our HR partners, which is the common outsourcing change management technique. They are not walking the office each and every day, dealing with visible angst, dwindling morale, loads of coffee room chitchat and challenging knowledge transfer.

Without the right approach to redundancy, transformation leaders are drained of emotional energy, and respond inappropriately. The retained team closely watches  management’s behavior, and develops a lack of trust. The departing staff demoralizes those who are staying, and trash the corporate brand. And processes have the potential to break down, performance declines and knowledge transfer is subpar. But by following a few simple rules, the pressures on all parties can be reduced.

Want to do a better job? Click here to download your freemium copy of “Outsourcing Change Management – No fun for the soon forgotten

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8 Comments

  1. Paul McCullough
    Posted November 18, 2010 at 12:44 pm | Permalink

    What a fantastic article, Deborah. You hit on probably the most important issue in sourcing. Your comments about honesty, personalization and setting expectations are the best pieces of advice anyone can give to a company going through this process,

    Paul

  2. Amanda Hare
    Posted November 18, 2010 at 12:49 pm | Permalink

    Deborah,

    I really enjoyed the research article, and thoroughly recommend everyone read it. Keeping doors open, as you suggest, is especially important. We’ve had several episides where we’ve ended up biting off more than we can chew and ended up keeping staff on, who we had initially planned to transition out. It’s all about treating people honestly and respectfully throughout a very sensitive and difficult time for any organization,

    Amanda

  3. Gary Schneider
    Posted November 18, 2010 at 1:04 pm | Permalink

    Deborah,

    Enjoyed the article. However, the scenario comes across very similarly to that of a merger/acquisition situation – there’s uncertainty, then establishment of the “retained” team, and then the counselling-out of the unlucky ones. In fact with outsourcing, there seems to be more clarity in the early stages regarding who’s being retained and who will be moved out – the challenge is getting them to stick around to help transition,

    Gary Schneider

  4. Scott Esposito
    Posted November 18, 2010 at 4:31 pm | Permalink

    The best approach is open communications. I know many companies try to cover, mask or contain restructuring / closings and outsourcings events, but the bottom line is that it should never be a surprise to the workforce that certain possibilities exist in the context of competing in global markets. Regular business updates, the performance of the company and what’s on the horizon should all be incorporated into consistent and fully deployed communications. Front line supervisors should be developed to carry these messages and understand the meaning and implications. They should also be the conduit back up the chain on what the issues and concerns are. The alternative is to let the grape vine, leaked communications and management behavior broadcast the coming events. In addition, companies should develop strategies to deal with displaced workers – what other employment alternatives exist at the company; putting measures in place to counsel employees, assist with their outplacement and coming up with creative ways to incentivize continued quality execution. Most of all, companies need to tell employees what will happen and when — to provide a plan with helpful resources and choices.

    Scott Esposito

  5. Posted November 18, 2010 at 5:11 pm | Permalink

    Deborah,
    Having had to be ‘the boss’ back in 1985 and having to notify my employees of a downsizing was painful since they were not the problem they were the solution, from a business perspective. At least in this situation it wasn’t a case of where the jobs were going to go, it was that they were simple going away. The only thing I could to as their boss was to provide them with an exit solution and help. Today we have been too sterile in making everything so “matter-of-fact”. Layoffs can come at anytime but it seems that its always in q4, just a great holiday gift to provide. I guess my takeaway from all of this is that it is a painful exercise and I would want EVERY boss to put themselves in the person’s shoes and to be man/woman enough to act as a human being and stop holding yourself apart from those that make you a success or failure story. Please don’t Twitter or email the notice, have an action plan/program for those affected, and give a bit of advance warning as opposed to a surprise gift.

  6. Maureen Sullivan
    Posted November 18, 2010 at 9:27 pm | Permalink

    Great article. I agree with Scott, as I look back over my career, it seems that I have been involved with Outsorcing, RIF’s etc.. since 1997. The one constant in keeping up the moral of the employees is communication. The most successful transition I have seen is when the CEO would hold weekly meetings with all employees and speak about the progress of the change and take questions to address these changes. This same company did give out a stay on bonus, (This didn’t work so well) Since the structure of the company was changing, HR provided training on/ coaching for job searching to all employees. We also provided training to supervisors and managers on techniques to maintain a productive workforce and keeping up moral. There was nothing more important at that time for HR as to support and assit all employees effected in the change. HR still managed day to day activities.

    Employee engagement is also a great tool. Ask the employees what the company should look like after the change. The people left behind are the ones we need to be concerned about as far as keeping employees positive, productive, and involved,

    Maureen Sullivan

  7. Cristina Falcão
    Posted November 19, 2010 at 7:39 am | Permalink

    Be clear about it, the worst is to leave people in doubt. However you cannot, humanly speaking, ask for a great job from people who know they are losing the job. The best thing you should do is to have your HR figure out some solution, some possibilities of work for those people affected.

    Cristina Falcão

  8. Posted November 21, 2010 at 8:54 am | Permalink

    All good comments. Vehemently agree with the communications theme; however I’ve seen managers overcommunicate and communicate wrongly because of guilt, discomfort, etc. The trick is to balance humanity with the fact that unfortunately it is business.

    And Gary, agree with your comment about mergers…however I think there is one subtle twist. Mergers and acquisitions have a slightly different more positive subtext, especially in so called “mergers of equals, or mega mergers. The “sale” to employees has a bit more positive spin, and with slughtly more care about exiting employees because the change is often in the public realm.

    Considerations about brand and shareholder reactions then weigh in, perhaps heightening concerns about the soon forgotten slightly.

One Trackback

  1. By Best of HfS in 2010 | Constellation Research on December 29, 2010 at 11:15 am

    [...] And while we were busy examining various forms of animal deposits with Vineet, Deborah Kops, delightful doyenne and describer, was joining the HfS research family to bolster our contributing analyst talent.  Debs took little time to wax lyrical about all issues sourcing change with two perceptively poetic and pragmatic pieces:  ”Imperfect Arbitrage: The implications of generational shift resulting from the globalization of work” and “Outsourcing: no fun for the soon forgotten”. [...]

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