The Human Side of Outsourcing - Managing People Change

In an earlier article I discussed my research intoI have had some people ask me why they should
managing the transition of people in an outsourcingbother about how people feel if they are no
situation. I highlighted the problems peoplelonger working in their organisation.
experience, anxiety, lack of control, resistanceFor most companies who outsource, the staff will
and reduced performance. Many also found itstill be required to carry out work for them, albeit
very difficult to treat their previous employer asunder the management of the outsourcing
a client, and were not able to feel a part of thecompany. It is also possible that at some stage
new company to which they had beenthe organization will wish to back-source (bring
transferred.people back in house). My ongoing research
An outsourcing transfer can be viewed as a formindicates that organizations will experience
of transition. This change process involvesproblems if they do not attend to the needs of
involuntary movement from one company totheir staff during the transfer process. To
another, with possible similarities, from the staffmanage justice perceptions it is important to
point of view, to mergers and acquisitions. Theensure you do communicate and that the process
transfer may also include staff reductions oris viewed as fair.
'downsizing', and the new organization will makeSome of the practical considerations for the
some effort to develop a relationship with theirtransfer itself therefore include; effective and
new staff in the form of organizationalongoing communication of the business rationale, a
socialization. All of these transition processes arefocus on procedural and distributive justice,
likely to impact upon perceptions of justice - intraining of managers to ensure open two-way
other words, whether people feel they have beencommunication and interactional justice is enabled,
treated fairly or not. These perceptions areand accepting and working with the emotional
important as there is substantial evidence that ifaspects of the transfer rather than pretending it
people feel they have been treated unfairly theydoes not exist.
are far less likely to perform well. However, ofAn aspect not often considered at all by
specific interest here is the repeated finding thatorganizations is after the transfer. It will be
good attention to procedural justice concerns canimportant to ensure remaining staff receive clear
increase perceptions of fairness even if thecommunications regarding the changing roles (their
outcomes are unfavourable. If we assume that,own and their ex-colleagues). A balance will need
at least initially, staff will view the likely outcometo be made between letting go, so that
of being forcibly transferred to anothertransferred staff do not feel they cannot move
organization as unfair, it may be possible thaton, and creating barriers to communication. Most
procedural justice will reduce their perceptions ofimportantly, consider how the contract influences
unfairness.your relationship with them. In the UK for
What do we mean by Justice? Distributive justiceexample if the tupe agreement includes a
considers perceptions of fairness of outcomesmapping-on of salary increases or other awards it
(equity, equality, and needs). Procedural justiceis vital that a process is put in place to ensure this
emphasises the importance of fairness of thehappens, rather than forcing the transferred staff
methods or procedures used (decision criteria,to continually monitor the situation.
voice, control of the process), and InteractionalSo do think about the people side of the transfer
justice is based on the perceived fairness of theif you are outsourcing, and remember that you
interpersonal treatment received, whether thoseneed them to be motivated and to continue to
involved are treated wish sensitivity, dignity andperform. Achieving this will be difficult and should
respect, and also the nature of the explanationsnot just be left to the company you have chosen
given.to outsource to.