Wednesday, January 30, 2013

Has Outsourcing killed Employee Loyalty?

Outsourcing has been the industry norm for sometime now.  Outsourcing is the fuel on which countries like India and China  are propelling towards development.  I personally have been a part of IT industry working on Outsourced projects for the past 8 years. Outsourcing is a win-win situation for both the company that outsources the work and for the company that bags the work.  But ever imagined how Outsourcing has impacted the Employees and their behavior? 

I am trying to do that in this article...

What happens in Outsourcing?

Not always but typically Outsourcing results in ramp down or transfer of resources I.e employees at the company that outsources . The Outsourcing Organization doesn’t need such a big workforce as the work has been outsourced and somebody else it doing now for them at a better price and with a better quality.



On the other hand, the company that bags the deal typically absorbs the transferred employees and may also ramp up its workforce. 

In both the cases, there is a new fear that is born in the employees, this fear had never touched the employees earlier and this fear it not sensed by the management and remedied immediately will impact the overall Delivery of the Organization.

What is this fear? 

Its the fear of losing the job, the concern about Job Security. 

Irrespective of the kind of skills you poses and the productivity you bring to the table, there is a possibility that you will be given the pink slip or transferred to a company that is absorbing you just because it’s a part of the signed the Outsourcing deal.  Either given a pink slip or transferred, your significance is overnight at rock bottom and you have to start the journey all over again, you have to prove your worth again. Imagine, somebody who has been with the organization for a decade is transferred to the Company that has bagged the deal. He knows nobody and nobody knows him.  

So how does it impact the way the Employees think, the way the Employees behave?

This fear being in 2 changes in the way the Employee works...

  1. Do whatever it takes to keep the Job secure

Because there is a fear about Job security, typical to all human being, the survival mode kicks-in. You start doing whatever is takes to ensure your name doesn’t appear in the list that will be awarded the pink-slip. This "Whatever it takes" is often about keeping the boss happy and sadly it doesn’t necessarily mean being productive. 

Also often the situation is that the people whose job is being outsourced are not assigned any new tasks. They are merely asked to keep an eye on the people in the outsourced Organization. This often results in people suddenly becoming team less, often becoming mere co-coordinators from being an expert. This change plunges people into the Survival mode and so the priority shifts from completing the Work at hand to making sure your presence is felt, the management is realized that you are needed to keep the things running. And the result is that the end objective of OutSourcing is never achieved.

  1. Jump the job

The characteristic highlighted in the point no 1 is mostly of the senior people who are settled and do not want to take the risk of Job change. But the younger lot, the soldiers will simply jump the jobs as they are not so matured to understand the corporate politics. Rather they say, the company doesn’t care for me so why should I? Somebody offers me a better deal, I will grab it.  To hell with Loyalty…


The summary is that if the Outsourcing Project is not executed with a human spirit in place, it will hamper the employee loyalty.  The juniors jumping the job is still manageable but the Seniors resorting to the option of Doing whatever it takes to secure their jobs simply kills the culture of the organization. The corporate politics starts growing bigger an bigger and reaches a stage where people are actually working to ensure that work doesn’t happen….


  The Outsourcing Handbook: How to Implement a Successful Outsourcing Process

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siddharth joshi A thinking soul

Writing to clear my mind...

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