Shell outsources 3.000 IT jobs

Royal Dutch Shell has the awkward distinction of being the first multinational of 2008 to cut a swathe of redundancies through its internal IT function and offshore more than 3,000 jobs worldwide, in the wake of a review of its 2005 financial results.

In many ways we can use the Shell announcement as a benchmark for how 2008 may pan out, as the company has been lambasted by trade union Amicus, not for the act of outsourcing, but for the way it has handled the redundancy packages, which currently stand at about 25% of the value of severance packages for its oil rig workers. With Rolls Royce announcing 2,300 job cuts worldwide, including in support services, 2008 could be a year in which many multinationals look to offshore providers to replace central functions at much reduced costs, particularly when those companies, like Rolls Royce, are pricing in a much-weakened dollar against the pound.

As we have explored in recent Editor’s Blogs, the key skills to acquire and deploy over the next few months when inking large-scale offshore deals, which carry widespread redundancies in their wake, are solid governance, sound management, and a constant awareness of the PR implications of mishandling announcements at a time of economic and political uncertainty.

• NOA has produced some best-practice guidelines for dealing with a strategic decision to go offshore:

Unions: the rule of thumb is to involve unions right from the start. Working together and keeping communications as trouble free as possible will provide the best results.

Watertight PR and HR procedures: These disciplines have to be well planned. If the flow of information is stemmed, staff will be left wondering and will draw their own conclusions. This can be detrimental to employee relations, especially with staff whose jobs are not outsourced.

Transparency: intentions have to be crystal clear from the outset. Rumours about intentions can be hopelessly off the mark and can cause widespread unease about job security.

Retained staff: there are often issues with retained staff, those left over in the wake of an outsourcing. How will they be feeling now that the vast majority of their colleagues have gone? The remaining workforce needs to be treated carefully and companies must ensure they have the right skills and that they have the right number.

Posted by on 01/10 at 09:41 PM

Comments

Post a Comment

Name:

Email:

Location:

URL:

Remember my personal information

Notify me of follow-up comments?

Submit the word you see below:

Next entry: Gartner predicts outsourcing growth

Previous entry: Gartner predicts 8.1% outsourcing growth in 2008