That's the kind of morning memo that can give employees whiplash and put a CIO out of the running for Boss of the Year. When a company sends a portion of itself, such as the IT department, to work for another enterprise as part of an outsourcing deal, employees necessarily enter uncertain territory. To help them as much as possible, CIOs need to make sure someone is guiding them every step of the way until they safely complete the transition. If you send the emotional equivalent of the above memo, you may find your hallways littered with employee roadkill.
The key to orchestrating a successful transition for the IT staff from old company to new is being straightforward about what is going to happen and providing support for employees who are affected. Everything from preparation to the big goodbye should be done with the knowledge that whatever you do will inevitably cause stress within the department -- and that those same folks will still be working for your organisation, only under a different flag.
"Even though they will not be your employees, they will continue to do your work," says Gwen Barker, human resources consultant and principal of Logenii, a Minneapolis company that provides IT workforce transformation support to Fortune 500 companies. And no company wants to send bitter employees to an outsourcer.
In any outsourcing deal there are bound to be glitches, but advance planning can help minimise the problems. Rick Sayers, a managing director of human resources for business process outsourcing at Price Waterhouse LLP in Cleveland, works with companies to keep their loyal troops happy as they send them off to toil for another. He recommends holding a mock Q&A session to help the CIO and his or her boss anticipate questions that will come up when management decides to break the news about an outsourcing deal and working to formulate the thoughtful answers employees deserve. Sometimes, he says, he runs into a corporate mind-set that wants to clamp down on the information going to employees before anything is signed because "it's not a deal till it's a deal".
That's just the kind of mind-set that makes employees edgy, says Rita Terdiman, vice president and research director for the Gartner Group's External Service Providers practice in the US. "Don't think that you can keep it a secret at all," she says. It's best to avoid the "surprise party" method of breaking the news, mostly because attempts at hiding the news will be unsuccessful. Someone will have a friend whose sister is involved with the deal, and word is bound to slip. Terdiman recalls that employees at one company learned some behind-the-scenes information after one vendor -- oops -- left the original of a critical document in the photocopier.
Ideally, the same day the company selects an outsourcer, employees affected by the deal should be told a deal has been made. People will figure that something is up when the rumour mill lets out that a parade of lawyers was seen heading into the conference room. "You have to at least move at the letter-of-intent stage," Sayers says. At that point, company officials need to let employees know how the outsourcing process works and provide them with a rough timetable of what comes next, even if the vision of the future remains uncertain.
Choosing an outsourcer to supply services should take no more than about nine months, Barker says. Assuming that most employers let their staff know that outsourcers are being considered, nine months is about the point at which employees get antsy. No one wants to wait around staring at the writing on the mouse pad. With a strong economy and great job market, valuable employees will take control of their own destinies and bolt. CIOs should keep an eye on their calendars, or they're likely to find themselves in an empty office.
Once the deal has been sprung, the transition period officially begins, and dispensing information -- complete, accurate information -- becomes vital.
Bethlehem Steel for example, made a point of being open about the details of its outsourcing deal with Electronic Data Systems from day one. About six years ago, the Pennsylvania-based company began a 10-year, $700 million outsourcing contract with Texas-based EDS not only to save money and streamline its IT department but also to expose its IT people to better training and a wider variety of technologies. Roughly 400 company IT employees and 250 contract workers were affected by the decision, and the deal had a ripple effect on dozens of other Bethlehem departments, such as public affairs, legal, labour relations and consulting, as well as the company's suppliers and customers.
From the beginning, employees yearn for clarity. They will be clamouring for any morsel of information that transition managers can offer them, and companies typically use everything in their pantry to sate this craving. The proven style of the company will decide how that information gets to them, whether it's via e-mail, meetings or carrier pigeon. "The culture is really the driver of what's going to succeed," says Logenii's Barker.
Bethlehem Steel used both a structured and an ad hoc approach to keeping employees up to date during its initial transition and afterward, says Thomas Conarty, director of IT. Meetings represented the structured approach. A general meeting hosted early on by current managers for affected employees addressed issues like benefits and insurance that were common to everyone.
Within two weeks, similar scenes played out on increasingly smaller scales, first with the subgroups of different employee categories and finally with separate teams, small working units and even individual employees. At these meetings employees and their managers talked about transition issues specific to their own departments.
The ad hoc approach covered the "lesser" concerns of the information spectrum.
The transition team set up an internal telephone number that workers could call to leave messages about issues great and small or to access the latest information about timetables or their new jobs. People were also invited to send their questions and concerns to an e-mail service. Open-door management sessions and a program that paired old managers with new ones taught managers all they needed to know, giving them information about major issues like new company policies as well as advice about finer points such as how to order a pencil. Employees had periodic town hall meetings with both Bethlehem and EDS execs, and employees even published a four-issue mini newspaper that dealt solely with transition topics.
At Bethlehem, managers "certainly wanted to eliminate unhealthy forms of conflict," Conarty says. Translation: stifling the dreaded rumour mill that invariably accompanies any outsourcing deal. That's when Betty from operations knows someone in her carpool who overheard someone say that for sure the new company will cut benefits, make people do more work and require employee ID tags to be tattooed on everyone's forehead.
Everyone knows that rumours are always more interesting than facts. Through communal e-mail postings and voice mail, Bethlehem's transition team made sure they flushed out as many juicy rumours as possible and then either confirmed or denied them.
Other companies have found ways to make the rumour mill actually work to their benefit, Barker says with a certain delight. In one company, rumours were running rampant that a particular vendor had been selected. When focus groups met, coordinators would talk pointedly in general terms about the pros and cons of the various vendors still being considered, knowing full well that their ambiguous comments would circulate and give workers the truthful impression that no decision had yet been made. "It was a way to work through the rumour mill," Barker says. "But it was factual." Answer the Questions Once an approach for distributing information has been established, Sayers says CIOs can begin addressing their employees' most basic concerns: Do I have a job, and for how long? What are my benefits? What is my compensation? After that come the "softer" but no less important issues that vary from person to person: Does the new employer offer day care? Will we work in offices, open spaces or cubicles? When dealing with the onslaught of questions, CIOs should be committed to honesty. Never fudge an answer that you don't know or that hasn't been determined, Sayers says. Instead, give the questioner a timetable for when an answer will be available and track those to-be-answered questions to make sure none gets neglected. Ignoring even one question can be damaging. "Credibility is certainly more important than an expedient answer," Sayers says. "When we give an answer, it's etched in stone."No matter how frivolous they may sound, all questions should be taken seriously. Terdiman once received a phone call from a couple of employees who had a question about the host of companies that were lined up as potential employers: "They wanted to know who would allow them to dress down on Fridays," she says. Such seemingly superficial concerns should never be trivialised because if that's what's important to employees, then that's what CIOs need to make sure the company that wins the outsourcing contract addresses. And if an outsourcing deal involves 500 people, then be prepared for 500 different combinations of issues. "If a vendor doesn't get that that's important," Barker says, "it can really put a twist into how people view that outsourcer." Confidence Building Employees need consistent in-person support from the CIO and his or her delegates in the early stages of the outsourcing deal to remind employees that someone is available to help them. For example, CIOs at the old company can invest in events designed to foster trust and camaraderie in the new managers.
Special get-to-know-us affairs or off-site happenings with both the new and old companies remind employees that they're still a team during the transition process.
Once major topics have been hashed out and comparatively minor announcements are not likely to spark a flurry of new questions, both company and contractor still need to monitor any changes in the effectiveness of the way employees receive their information. If new information seems to be emerging hourly, photocopied memos likely won't keep up with word-of-mouth and could signal that it's time for a move to e-mail or some other instant delivery system. The sure-fire information-delivery method that works just fine today may be the wrong approach for tomorrow. "It's hard to categorise any one silver bullet because the silver bullet for weeks one or two might not be the best thing for years one or two," Bethlehem's Conarty says.
CIOs can raise workers' confidence levels by stressing the positive aspects of the transition and reinforcing just how significant their new jobs will be. At the old company they were just one important cog in a giant machine. Now, they are the machine. That's a big selling point in getting people to switch, says Sayers, and one new employers can use to rally their adopted workforce: "You've never been on the front line. You've always been in the back office. This is the front line of this company. This is what we do." CIOs should also make sure the IS staff doesn't have any major surprises on the first day at their new jobs. Continuity of work is key: on the first day at the new company, employees should do exactly what they did for the old company.
"Whatever [they did] yesterday, they're doing today," Sayers says.
After that, the new employer can build on the employees' confidence to add new skills and training until they get to the point where they're serving more clients than just their old employer. On top of that, employees will notice that these new skills make them more marketable and therefore more valuable.
Back at the old company, the job for the CIOs and the other top managers is far from over. They must be careful not to neglect the people who are left behind after the outsourced folks take off, whether they're in the same department or another. "The remaining organisation flips into shock mode," Barker says.
"They're going to be thinking, 'Are we next?'" Maybe, maybe not. The employees will be focused on the recent past, but CIOs can refocus them on their current work and keep them posted about any future changes.
Sometimes people forget that even under the most uncertain and stressful times, employees still have a business to run. No matter what the terms of the outsourcing deal, keeping people informed benefits employers in ways they might not have realised initially. The outsourcer also benefits when its future staff has a flood of timely, accurate information because it imparts a confidence that will help build an energised, enthusiastic workforce.