Staff Alert

With outsourcing on the rise, CIOs are at the center of a morale crisis. They see many of their workers battling stress on the job. The best leaders learn to help employees now-and keep them in the future.

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Brenckle was so concerned about employee reaction that in the end, 25 percent of the contract with the outsourcer addressed staff issues, such as guaranteeing that the outsourcer would retain all UPHS employees for at least a year and ensuring that turnover would be less than 2 percent. The pact kept some benefits, such as tuition reimbursement, that UPHS employees have. Still, the outsourcer saw two turnover peaks -- one at the switchover and another 18 months later when some workers transferred off the UPHS account. But Brenckle knows it could have been worse. Remaining employees, whose stress levels skyrocketed initially, eventually got used to the idea of managing staff that actually worked for another employer. "Outsourcing is the kind of thing where you have to include your staff on the journey. You have to be very open," Brenckle says. "Because the reality of it is that you have an IT department to run before you outsource, and you’re going to have an IT department to run after you outsource."

"CIOs will spend tons of money analyzing who the right outsourcer is and on which piece to outsource, but when it comes to focusing time and money on people issues, they say they can’t afford it. But that’s the one piece that really matters," says People3’s Pittenger. "Bring companies in to hire your people or have the outsourcer hire them. Take the business strategy and make it work for your employees. It doesn’t have to be a win-lose situation. Besides, you have survivors inside who aren’t going to stay if they see how you treat the people who don’t stay."

Keller Williams Realty’s Bien admits he made a mistake when he outsourced strategic development to an IT consulting group a year ago. "There’s a lot of internal skepticism when you enter into a long-term relationship like that, and the outsourcer is doing all the neat and cool stuff, and your internal staff is keeping the wires together," says Bien, who recently reinsourced that work. "As we go forward, we only outsource commodity services in the short term. And what we will keep in-house forevermore is the development of strategic platforms that differentiate us. It’s an employee satisfaction issue. And no one will understand your strategic needs better than the people whose livelihood depends on the success of the company."

Get Used to This

But what CIOs want to know more than anything is when will this period of deflated budgets, inflated stress levels and increased pressure to use outside sourcing options end? Unfortunately, there’s no solid answer to that just yet. "There’s a yearning [among IT employees] for things to go back to the way they were two or three years a go," says Pittenger. "But that period of time was so artificially inflated we’ll never get back to that."

And while budgets have begun to inch up a bit, according to Forrester’s Pohlman, IT hiring is still trailing the slight budget increases. "This problem is going to continue to get worse," he says. "Although we’re seeing some CIOs start to increase their spending, they’re not increasing their hiring [as much]."

Though not rosy, the situation does paint a clear picture of what CIOs need to do -- everything they can to take care of their workers.

In Philadelphia, city CIO Dianah Neff seeks help and understanding. She’s looking into automation tools that might help her small staff deal with bigger workloads. She’s telling her city IT governing board that there’s only so much her staff can do. And she’s communicating like crazy with her employees.

"Communication is the best stress reducer. The staff feels at least a little less stressed if they understand what is going on," Neff says. "If they aren’t worried about what management is doing, they can focus on their jobs or finding creative ways to do more with less."

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Copyright © 2003 IDG Communications, Inc.

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