HR Issues don’t belong in the Too Difficult box

Everyone has a Too Difficult box, reserved for those issues that they really don’t want to think about.  Usually, something languishes in the Too Difficult box long enough for an issue to turn into a problem, and then there’s no alternative but to sort it out.

In over 20 years of working on ICT and outsourcing projects, I’ve found that one of the issues most frequently overlooked by CIOs is the likely HR impact of proposed projects. Perhaps it’s the triumph of hope over experience that each time, maybe, the planned savings or flexibility from a project aren’t going to get eroded by constraints imposed by HR law.

It doesn’t need to be that way, however.  If you engage with the issues early enough, the HR function can become a contributor of solutions, not obstacles, to the smooth running of projects.  There are some basic structural steps which, if followed, will help to reduce the potential for HR issues to de-rail a project or get blown up into potentially deal-threatening problems.

HR issues have always loomed large in ICT services and outsourcing projects. By their very nature, such projects involve a change in the pattern of service delivery – and that service delivery depends on employees, mostly well trained and experienced, continuing to do what they have always done but ideally with better management and training and an improved subject-matter skill support network provided by the service provider.  If those employees are treated badly, at best they lack motivation or incentivisation, and at worst they may end up leaving their employment altogether, being made redundant or being left employed by the “wrong” employer when their actual job function has moved elsewhere.

Traditionally, the task for HR professionals in ICT and outsourcing projects has been to manage smoothly the issues arising from the proposed transfer of job functions.  In the UK and the rest of Europe, this means anticipating the effect of the Acquired Rights Directive and the Transfer of Undertakings Regulations which mandate that employees whose job function is transferred to a service provider follow their jobs.

Although very few proposed ICT/outsourcing projects are abandoned purely because of HR issues, projects can very easily be temporarily derailed if these issues are not dealt with appropriately and at the right time.  Best practice suggests that the more successful projects occur when HR teams are closely embedded into projects throughout their lifecycle, in order to reduce current and future HR issues.  What this means in practice is early engagement of HR professionals to scope out potential “red flag” issues.  Once the decision to proceed has been taken in principle, HR professionals should be involved pre-tender to determine the agreed position on TUPE, so that it can be made clear to prospective service providers in the tender documentation what’s going to happen as regards staff transfer.  This will allow those bidding to factor into their bid associated staffing costs, thereby avoiding unpleasant surprises for both parties down the line.

HR professionals should also help the business early on to identify key employees within their own organisation and key roles within the service provider.  HR professionals’ involvement should continue during the tender process to ensure that bids accurately reflect the customer’s position on TUPE.

During the contractual negotiations, advice from HR professionals should be sought on some of the contractual terms, such as restrictions on changes to staff terms and conditions and movement of staff in and out of scope pre-transfer, and also on the appropriate restraints to be placed on service providers post-transfer.  These often include a requirement to maintain terms and conditions or avoid redundancies for a fixed period after transfer.

Finally, and perhaps most crucially, HR must play a key role in employee communications.  This will involve both briefing managers so that the correct messages flow down to staff and also being prepared themselves to handle direct questions from staff.  This is a pivotal role and crucial to the success of any project.

At go-live, HR professionals will be responsible for overseeing the transfer of transferring employees and their data to the service provider.  HR professionals will also have an important on-going role once the services provision has started, especially during the critical early months when the project is bedding down.  This will include communicating with retained staff, as well as assisting the business in monitoring the success of the project.

Finally, at exit, HR professionals may need to assist the outgoing and incoming service providers with issues related to staff transfers and the handover of employee data.  The “fair play” role is crucial here as the customer has an overriding goal to ensure a level playing field between bidding entities and, without a steadying hand, incumbent service providers often hold back as much employee data as possible so as to secure an edge in the bidding.  Claiming that HR data cannot be released to competing bidders may be correct for some data and at certain times, but the HR professionals ought to find ways to produce a common baseline of bid-relevant data (especially HR cost data) even if the data is largely or wholly anonymised.

This level of HR involvement throughout the whole process will ensure that the HR function is a real contributor, and in some respects key facilitator, of solutions, not obstacles, to the smooth running of ICT/outsourcing projects.