Government urged to promote outsourcing

IT suppliers and customers are calling on the government to promote the benefits of outsourcing to employees, in order to help UK outsourcing companies better compete with their overseas rivals.

Supplier and customer body the National Outsourcing Association (NOA) said that changes to employee-related legislation are needed to address widespread concerns from staff about the implications of being transferred to an outsourcing supplier.

NOA chairman Nigel Roxburgh told vnunet.com that embracing the trend towards outsourcing, rather than introducing protectionist measures, would be key to a thriving UK economy.

"The government needs to be aware of the potential of outsourcing for the UK economy. We should see this as a trend rather than being the machine breakers of the knowledge economy," he said.

The call comes as banking giant HSBC Holdings announced plans to move 4,000 call centre and back-office processing jobs to India, Malaysia and China over the next two and a half years.

HSBC will close five back-office processing centres around the country by the end of 2005, enraging unions which have pledged to fight the plans.

Employee concerns, and the emotional reaction provoked by outsourcing, have tainted the industry's reputation.

Roxburgh believes that extending TUPE, the legislation to protect employees' rights when a business is sold or merged, to include pension rights would go some way to addressing fears.

The knock-on effect would be to bolster support for, and investments in, outsourcing.

"We would be better at this if we had a tight, regulatory environment and less fear about being displaced by an outsourcer," said Roxburgh.

"Constant learning, re-skilling and redeployment also need to be priorities for the UK government. Having strong outsourcing companies will bring employment back to the UK."

But Lee Whitehill, a spokesman for union Amicus MSF, said: "We have to move the UK into an ideas economy, and training and education definitely have a role to play.

"But I don't think anyone in their right mind would say that encouraging outsourcing, which has led to the loss of 4,000 jobs at HSBC, can be good for the UK economy."

The union has called on the government to set up an independent commission to examine the likely effects on the economy and levels of unemployment.

Analysts and consultants predict that 200,000 UK jobs are likely to be lost to offshore firms as the trend towards outsourcing gathers pace.

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