Outsourcing connects BT with better and cheaper HRM

Purpose – This paper aims to trace the history of the BT‐Accenture e‐peopleserve joint venture, which provides HR services not only for BT but also for other clients. Design/methodology/approach – Examines the changes to HR at BT post‐privatization, the factors that gave rise to the joint venture and the way in which it has developed. Describes some of the factors that need to be considered for an outsourcing deal to be successful. Findings – Reveals that initially, costs went up, and that the transferred workforce took time to adjust to their role as a service provider. This has been addressed through self‐development and process improvement. By outsourcing, BT has rationalized its training catalogue by 50 percent, reduced training waiting lists by 26 percent and saved $2.2 million in time and money lost because of sickness. It has also increased employee‐satisfaction ratings across training and counseling. Other benefits of the deal include: one telephone number for BT staff to contact HR; a single Peoplesoft HR information system that provides enhanced HR reporting capability and employee self‐service; and a company‐wide learning‐management system. Practical implications – Emphasizes that, while outsourcing might seem to be a simple cost‐reduction option, there are significant challenges to getting it right. Originality/value – Reveals that BT now has one HR specialist to every 200 employees, which is well ahead of the benchmarks in its sector.