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Outsourced and loving it

Operators that want to transfer part of their business to another company must consider how the change will affect their most important asset: employees. 3 UK left nothing to chance when it moved more than 1000 workers to Ericsson in one of the industry’s largest managed services agreements.

Neil Clark, formerly a 3 employee, is now Human Resources director for Ericsson Services Ltd, the company Ericsson created to serve 3 and other customers in the UK market. While at 3, Clark belonged to a team that worked tirelessly to make the transfer as smooth and painless as possible for everyone involved.

CLARK'S FIRST TIP: KEEP EMPLOYEES IN THE LOOP
“There’s always a balance in terms of what information you give, and at which time,” Clark says. “Telecom is a small industry and rumors get out very quickly. But the timing of communication is critical.”

In July 2005, shortly after initiating discussions with possible service providers, 3 held the first of several employee consultation forums to discuss the potential for a managed services deal.

Shortly after, employees got access to a new intranet site dedicated to the possible transfer where they could ask managers about the proposed deal.

Their inquiries reflected the anxiety many felt; “Who will I be working for?” “When will I know?” “What changes will I find in my terms and conditions of employees?” “Will they make me redundant?”

“They were very basic survival questions, and we replied to every single one,” Clark says.

CLARK'S SECOND TIP: PAY ATTENTION TO DETAIL
As 3 UK was finalizing its negotiations with Ericsson, there were many practical details to tend to beyond the technicial operation of the network. Human resource professionals at Ericsson and 3 worked closely with the incoming team at the new company to make sure nothing was missed.

Pension plans and other employee benefits had to be converted to the Ericsson benefit system; payrolls had to be transferred; paperwork had to be drawn up, spelling out how the new Ericsson employees would deliver services to their former colleagues at 3; and plans for moving offices had to be initiated.

The stakes were high.

“You just can’t underestimate how complex it is to transfer people like this,” Clark says. “You’ve got to invest to make sure the transfer is smooth, because this affects all the people who are out there running your network and IT systems – the people we depend on to deliver successful services.”

In the end, only a few of the more than 1000 employees affected by the deal left as a result of the transfer. Most said they did not want a longer commute to the new office.

CLARK'S THIRD TIP: EASE INTO THE CHANGES
The deal with Ericsson was announced December 1, 2005. Twelve days later, roughly half of 3’s employees transferred to Ericsson.

In the reception area at Ericsson Services’s new office, posters had both the Ericsson and 3 logos. Some 3 programs, including a popular employee recognition program, were also retained.

There were challenges to overcome, especially as people struggled to develop new client relationships with people who used to be their peers. Management within both companies trod carefully those first few months, mindful of the new divide.

John Vickerman, 3’s People and Property director, says technical staff in particular were buoyed by the fact that they now worked for a global technology company that offered more room for professional growth.

This is believed to be one reason why employee turnover dropped by 3 percent during the past year.

“True to say, we did not skip a beat,” Vickerman says. “Both groups of employees – those who left and those who stayed – seem to be very happy.”