Welcome Guest. | Log In| Register | Membership Benefits


Employees Find There's Life After Outsourcing

After initial shock, IS workers find new opportunities
By Bruce Caldwell
Issue date: March 31, 1997

Rusty Harris still owns the Buick Reatta he had when his IS job at Cummins Engine Co. in Indianapolis was outsourced to EDS in 1989. But the Toyota Camry is gone-replaced by a Cadillac Seville and an Oldsmobile Bravada at his home in Danville, Calif., where he can seriously contemplate his dream of retiring at 50, nine years from now.

When C ummins outsourced its computer operations, Harris pursued an opening in EDS's sales organization and began living "on a risk-reward scale that I never knew existed as a data-center manager." The rewards have been good, generated by Harris' strong performance: On Feb. 27, EDS named him sales professional of the year for bringing in $600 million in new business in 1996.

While Harris' success may be exceptional, it appears that having your job outsourced isn't necessarily bad news for IS employees, at least in the long run. Most such employees appear to be at least as well off as before.

For example, people who transfer to outsourcing companies tend to earn more and have more responsibility than they would have otherwise, says Adam Kohn, a VP with Christian & Timbers Inc., an executive search firm in Cleveland.

However, the transition is often difficult, says Rolfe Schroeder, VP of human resources at Computer Sciences Corp., an IS outsourcing company in El Segundo, Calif. "You have shock, denial, and despair, then optimism and genuine excitement" over new opportunities, he says.

"We get 95% of the employees whom we make offers to," Schroeder says, adding that turnover among those employees is about 9.5% a year, compared with 11% for all of CSC. Half of the VPs in CSC's outsourcing organization were once IS employees of outsourcing clients.

While professionals at services firms tend to be more mobile than their counterparts at the companies that hire such firms, an unwillingness to relocate isn't necessarily a bar to promotion after outsourcing. Steve Whelan, for example, was a project manager at J.P. Morgan & Co. before it outsourced last year to Pinnacle Alliance, which includes Andersen Consulting, AT&T Solutions, Bell Atlantic Network Integration, CSC, and J.P. Morgan. In July, he was hired by AT&T as a technical services manager for the alliance. In January, he became a director of new services at CSC. All this time he's continued to work in the same office he used as a Morgan employee.

To be sure, the aftermath of outsourcing isn't always so benign. Union employees of New York's Westchester County have filed lawsuits challenging the county's seven-year, $84 million outsourcing contract with IBM Global Services, which began in January. The employees say the deal has cost them some pension rights and sick days. About 30 of the 92 employees affected by the contract didn't seek jobs with IBM.

Karen D'Ambrosio, a project manager in Westchester with eight years as a county employee, agreed to transfer to IBM as an IT specialist. The pay and benefits were comparable, she says, but her job was moved 45 minutes away and "it didn't feel right for me." So last month, she took a year-2000 project management position closer to home with Cap Gemini America.

Most IS employees affected by outsourcing agree that it delivers a heavy jolt to one's career outlook. But after getting sufficient information and time to adjust, the employee can choose whether the jolt is a catastrophe, an op portunity, or a temporary interruption.

Comments?

http://www.informationweek.com