To think out sourcing is the devil

[1DAD2KIDS]

So the company is looking maybe to outsource the cleaners and maintenance staff. I can only see that will have a huge negative impact on that's staff wages and conditions. At the moment they get a decent fair wage, a good pension, robust terms and conditions and travel perks.

Now clearly the company is doing this to save money (for increase profits). Thus the out sourcing provider needs to provide that staff for less than it costs the company and also make a profit them self. So surely this has to come at a cost to the staff in terms of wages, pensions and terms & conditions in order to make this feasible. And possibly people losing their jobs too. In short a lot of people suffering just to make a couple of organisations a bit more money.

Not necessarily, no HR costs no management time no taxes etc plus the cleaners are unusually full time in an outsourcing company when they won't be with your company meaning they can get clean in more than one place per day. Outsourced anything usually is faster and the same amount of work can be done in a shorter time or by less people. it is sometimes much more cost and time effective to outsource.

I work for an outsourcer it's a nightmare the client company don't have to worry about us so do only what suits the business with no thought for the staff imvolved and the outsourcer has to keep the client happy so just go along with it.

Most recently we have been told we have to come for training outside our contracted hours then not given a date for it until 2 days before. If we didn't arrive we would lose our jobs. They also refused people holidays in december and attempted to get away with keeping the holiday days and not paying the staff with the reason staff shouldn't have kept so many holidays in december so they lose them.

Existing staff will be TUPE'd over .

I think that outsourcing works for everyone when the tasks require a small amount of time.

I'm essentially (very well paid) outsourced labour. I work on several projects for different universities. Any single one if them would struggle to have enough work to pay me what my qualification deserve, but working across several allows me to make a living in my niche.

So, if the cleaners are in the offices for 2/3 hours it's possible that your company will make genuine savings from outsourcing as the crew will move on to another office (possibly another 3), so the overhead of employment are shared between those 3/4 jobs.

You're right though, that outsourcing is often done unethically. On the gender pay gap thread someone posted that all canteen staff & cleaners were outsourced as they were low paid & mostly female & by taking them off the books they were able to disappear a large part of the gender pay gap for the company.

Yanbu

Outsourcing is simply about reducing cost. But people forget that cleaners are actually people who need to earn a living.

Business decisions are made with only one thing in mind. Money and how to make more of it. Forget about the fact that cleaners are people who need to earn a living. They’re just a commodity.

Yes - bad result for the cleaning stuff and for you as the time allowed/quality of cleaning will no doubt be compromised in order to do the job for less. Our outsourced cleaners stick bleach down loos, empty bins and Hoover (just about) - our inhouse cleaners would dust desks and monitors (unless instructed not to), shelves and window sills and clean the toilets properly (including tiles). We now all have cleaning wipes and spray at our desks as we end up cleaning our own, but generally the place is much muckier. Outsourcing to the cheapest supplier may save on the bottom line but it's a poor decision for staff who have to work in the environment, IMO.

I know it's maybe simplistic but say if it costs the company £70 a day to employ a clean. They want to out sourse the job to save money.

So the out sourcing company says we can do it say for £60 a day. But said company aslo needs to make a profit off this labour and keep competitive pricing against competition from other service providers. This diving the cost lower and lower of this service lower and lower at the continued cost of the staff.

How could this not have an negative affect on their current pay (which is currently better than other places), their pretty decent pensions, their robust terms and conditions (ie no flexible contracts) and maybe jobs too?

The winner in all of this two companies making bigger profits. The loser ever employee from who they profit off their labour.

And it's not little jobs here and there. The maintenance and the cleaning opperations are pretty much round the clock.

Outsourcing can also be the start of a slippery slope - when a company is looking to save money by farming out the mundane, unskilled but necessary stuff, it will often not be long before more skilled work is "contracted out" too.

Totally agree. More often than not it's the rich screwing the poor. Again.

It’s interesting that senior executives never think “how could we do our jobs for cheaper”. It’s always “how can we do the lowly jobs for cheaper”.

The reason is because they cannot fathom why anyone would think they weren’t worth their salaries yet they do it all the time to lower grades.

Like anything else, it depends on the firm doing the outsourcing. Some (like in any sector) will treat workers badly, others will treat them fairly. Outsourcing is not inherently a bad thing. There are economies of scale, cheaper costs of materials due to bulk buying, more effective use of equipment (so you don't have things sat idle most of the day). It's not all about cheaper wages. Done properly and ethically, it can be a "win win" for everyone - unfortunately it gets bad press like the NHS PFI fiasco where NHS managers haven't negotiated nor read the contracts properly!

When I was the accountant for a factory, we had an in house staff canteen which was a right fiasco, always running out, poor quality meals and cost a fortune as despite charging staff, it ran at one hell of a loss.

I was the driving force behind outsourcing it to a catering management company. We talked to several, and negotiated hard. We got an excellent deal, staff got better meals, prices were the same - it worked out really well. Mostly because it was being managed by people who knew what they were doing rather than in house by people who hadn't a clue. (It was managed by the HR department when in house who didn't understand it so the staff lurched from one crisis to another).

YADNBU. I hate to see profits being put before people. It seems to be the world we live in sadly, where money is valued above all else. Vote Jezza!

[senior execs] cannot fathom why anyone would think they weren’t worth their salaries yet they do it all the time to lower grades.

Exactly Believeitornot. Then, to continue the cleaner example, the outsourced cleaners are under great time pressures so only do basic tasks in the shared toilets and aren't paid to do the kitchenette. A vomiting bug then breaks out, knocking everyone off their feet for days (including people just pretending they have it because morale is so bad because senior execs are so poor at managing as they're too busy holding on to their roles). Then a deep clean company has to be paid to go over the whole place and loads of working hours have been lost....you know, just for example.

I get your point but sometimes it works. My main client compnay only survived through outsourcing. It would have gone under otherwise.

It is not always about money - sometimes about efficiency. I used to work for a huge multinational - thirty years ago. Everything was done in house. The company had cleaners and advertisers and drivers and mechanics and handymen and nurses and trainers and, and and... It was mad. Made much more sense to focus on core business and buy in services from specialists.

We do it at home. I "outsource" my food production, my children's educaiton and health, my hair care, my home maintenance. Many also outsource cleaning and laundry and gardening as well.

OUtsourcing is distinct from paying a fair wage for a job and providing good working conditions.

In my experience, out-sourcing results in a poorer service and eventually a higher cost if the out-sourcee wants to move back to the previous level of cost.
Once again, in my experience, this is usually down to the contract signed. The out-sourcing provider have a lot of experience in negotiating this type of contract and will offer to take on the task of drawing up the contract. To the out-sourcee, they are presented with a comprehensive document, with a schedule describing all the tasks that will be done, to what level, frequency etc. There will also be a list of costs for tasks not covered by the contract, or even worse a standard rate for doing these that is a lot higher than the rest of the deal. This will be buried away in an appendix and the client will not be encouraged to dwell on it.
The contract is signed, and for the first few weeks/months the most experienced and efficient staff will work on the contract, everyone is happy. However, after a while, these 'good' staff move on, often to the next new contract. Standards slip a bit, but the client is persuaded that things will improve.
Sometime in, the client will realise there are some things that their employees used to do, often infrequently, that are not covered by the contract. They either suck this up, or go the service provider and ask for a quote to do this work. Of course the latter is happy to do this, but at a much higher charge (see above) than the rest of the contracted work. So either the work is not done and standards slip, or the out-sourcee coughs up and ends up paying more than they used to with their own direct staff.

I realise this is a bit of a ramble, but I've seen it happen over and over again, especially in the public sector where they tend to have a weak procurement division and are easily led by the nose.

In another one of my client companies they had a maintenance guy. He was great. Paid a salary, did all the fixing and mending and was a good chap to have around. Every time the coffee machine got bunged up or the window locks jammed we'd call George. He also did the decorating on a rotating basis - once room at a time. Until somebody worked out the real cost of employing George. (Salary plus taxes plus pension plus sick plus holiday pay plus all materials). Compare that with buying in what you need when you need it - and you save thousands.

Carillion anyone? Massive outsourcing company and look how that ended...

I was one of the lucky ones, I got taken back in house middle of last year from a Carillion contract before it all blew up.

I know some people have talked of the 'virtues' of out sourcing. But these 'virtues' don't seem to include equiverlent or better working conditions, wages and job satisfaction for the labour force.

To be honest i cant see how it possible (on the whole, there will always be exceptions) for the job to be done cheaper, plus another middle man to make profit too and no body loses out? Seems to me that cost continues to be driven down the losers are quality, the staff on the shop and their families. Out sourcing is just an oppertunity for another middle man to cream profit of often the most vunrable groups of workers labour.

Outsourcing is not just for low paid. Consultants are outsourced labour. All the big accountancy or management consultancies are outsourced labour.

Working conditions are a different issue and should be considered as such - otherwise we lose sight of the real problem.

As long as the company who is employing the workforce treat them well and legally then does it matter whether the cook is employed by ABC Engineering or ABC Specialist CaterersLtd?

Is the Accountant employed by XYX Transportation necessarily treated worse than one employed by XYZ Accountancy Services Ltd?

Outsourcing in itself is not a bad thing - exploitation of the workforce is.

Outsourcing in itself is not a bad thing - exploitation of the workforce is.

Exactly right. Outsourcing, done properly with contracts properly negotiated is fine. However, a procurement officer signing a contract without looking at it properly is where the problems start (Yes, NHS, looking at you!).

Consultants and outsourced labour are different. A consultant is in a stronger bargaining position and can better set the terms.

Outsourcing is where a business uses external firms to deliver business as usual - to me there is a difference.

How many people in the lower paid and expendable work areas benefit or do equally as well when their job is out sourced?

Companies genrally treat and pay you in accordance of your value to them and the ease/cost of replacing you. Naturally if your a valuable labour comodity your looked after better than if your not. In buisness people are not people, they are commodities of various value and supply.

In the majority of cases I see employees losing out as middle men and the company that put out for out sourcing clean up.

Outsourcing the cleaning shows the top brass dont understand or value the work or the people that do it.