Surviving Outsourcing?

An anonymous reader writes "As some of you may know, HP is negotiating with DPWN, parent company of DHL, to take on outsourced parts of DPWN's global IT Services business unit. As a worker in that business unit, I and my colleagues are part of what HP is negotiating for. I moved into my current position fresh out of university and so far haven't experienced corporate shake-ups or outsourcing initiatives. I enjoy my work and the opportunities that go with it, which is why this announcement was so distressing to me at first. Then I began hearing about the opportunities HP has internally. If you've been through a similar experience, what advice would you give for someone being outsourced? Should I 'ride the wave' and join the new company and culture, or dust off the old CV/resume?"

Why not try it?

It's always a good idea to have the CV up to date, but I don't see why you shouldn't ride the wave for a while until you can determine just how good the surf is.

If you don't like them, you can always leave then.

Re:Why not try it? Its experience

You get an opportunity there! Write down the differences of both. Learn as much as you can. Take good old common sense to see what was good in the one and whats good in the other place. And also note what was bad in the old and what is bad in the new place. Then after some time look at your CV, add your new experience and rethink if you are better off at a different place.

Re:Why not try it?

Just what I was thinking - do both!

I went through something similar a couple of times within a few months a little while ago. First time round I got a lot of reassuring "we want your expertise" noises, then a payoff and a goodbye. Then I got a new job at a small company and it happened again.

Second time it was another big company (let's call them "large indigo") and we had all the same talks and speeches and the same reassurances, only they actually meant it. Unfortunately it's very hard to tell this. Anyway,I'm still with them and am not only very happy (and in the same job) but it's kinda cool having the opportunity to move around the company and the world once you're on the inside.

So, YMMV, but don't be too pessimistic.

Re:Why not try it?

This would seem to be the obvious thing to do.

I got outsourced a couple of years ago, (not to HP) and I couldn't say it's any better or worse than it was before. I do have the advantage of UK employment law on my side, which in theory ensures I remain on cmparable terms and conditions. I ended up with a poorer pension scheme but a higher salary to make up for it, and a few minor changes in other benefits - mostly good.

Not everybody stayed on, but most people did. One guy left, then got re-hired because he was too valuable to lose. Most of us are doing pretty much the same job as we were before, although those in leadership roles probably have more responsibility than they did before.

In theory there are more opportunities for me. A lot of that is going to depend on me seeking them out. At the least, I shall end up doing work for other customers besides my original employer which gives me exposure to different ways of doing things.

In my limited experience - I got sort-of outsourced once before: massive reorganization which involved setting up a new company to handle IT for the whole group - it needn't be bad for you. I certainly think that some of the other posters are being needlessly alarmist and cynical. Go with it, and try to be involved in the changes.

From my experience

You should do both. Face it. The reason the shake up is there in the first place is because someone in the food chain isn't making enough money and wants to change things around so that they make more.

This likely will result in a possibility you come on to the new company... or not. Remember a lot depends on how much you are willing to accept as a reduction in pay which ultimately will happen at some point.

In the event that they don't want to pay you what you believe your worth, they will go for the lesser costing options (other people), and you would ultimately be out looking elsewhere.

Been there; done that.

Not necessarily

"Remember a lot depends on how much you are willing to accept as a reduction in pay which ultimately will happen at some point."

Not necessarily.
Been through 2. First ended in a payoff and redundancy, the second resulted in more money as they realised how useful I can be when properly motivated :)

Been there - Survived that

Here's how it works when you get outsourced:
1. You have your job and you do it.
2. You/Your section get outsourced.
3. You have your new job, which is the same as your old job, and .. you do it.

If you weren't dusting off your CV/Resume at your current job, why would you suddenly do it now? You're going to get the same money for doing the same tasks that your currently doing. If nothing is broke, most likely no-one is going to try and "fix it". You're likely to see less change than if your bosses boss resigned and was replaced by someone new.

Disclaimer: I worked in IT and my area was outsourced. After a little bit in the new company, I moved away from maint/support roles into development roles that just weren't available in my old company. YMMV

Re:Been there - Survived that

You're going to get the same money for doing the same tasks that your currently doing.

That might be true in some states, and it is certainly true in the UK where TUPE regulations protect employees' packages when transferring to a new company, but my impression from other discussions is that in general US workers don't enjoy many rights, and a pay cut or redundancy with little/no compensation and immediate hiring of someone cheaper could well be on the table.

Re:Been there - Survived that

"UK where TUPE regulations protect employees' packages when transferring to a new company"

I'm certainly glad my package is protected, otherwise new managers could be real ball-breakers :)

Except it rarely makes sense

"If nothing is broke, most likely no-one is going to try and "fix it"," is a good principle, but obviously doesn't apply when the whole deal is aimed at fixing it. If nothing were broke, DHL wouldn't "fix it" by pawning off the whole department.

Anyway, the fact is, DHL thinks it can save some money by passing these guys off to HP. Going by your scenario, it means that, basically we have two sums:

X = how much DHL pays for these guys, managing them, computers, electricity, building rent, overhead, etc

Y = how much DHL would pay HP for the same results

Now DHL thinks X > Y, and HP must think that Y includes a profit margin for itself _and_ pay for whatever they bought that department for. (It's not signing this just to subsidize DHL.) It makes no sense for Y to be the exact same old X plus a positive profit. Basically for your scenario, you have simultaneously X > Y, Y = X + P _and_ P > 0. Something doesn't add up, according to the maths as I know it.

One possibility that happens rather often, is that actually HP will end up fleecing DHL. I.e., that (maybe after a short time) actually Y > X. Quite a few companies found themselves at the bad end of that kind of a deal. (Though in the short term HP takes a small loss to sweeten the deal, the new CEO/beancounte/PHB can show some positive financial results in that quarter, and the shareholders cheer.)

The other possibility is that HP _will_ reduce the costs somehow. Maybe they'll force everyone to do more projects in the same time, so it's not going to be really the same job for the same money. Maybe they'll phase some people out after a while and move some of those jobs to Elbonia. Or maybe after a while they figure out that they can't make that much money there, gut the department and keep just some maintenance or service contract with DHL. Or whatever.

There _are_ a few such outsourcing or privatizing deals done just so someone else gets to fire those people, or ask them to take a pay cut.

So basically indeed YMMV. I'm glad it worked out well for you. Sometimes it does. In some other places it doesn't work like that.

No brainer.

Join the new company, there's more opportunity for you being 'an IT guy in an IT company' than 'An IT guy in a widget company.'

India or Bust!

You could move to India, the land of opportunity.

Re:India or Bust!

Not so much anymore. I work for a big company who a few years ago did a lot of off shoring (not outsourcing, they were employees of the company) to India. We learned a few lessons, including that it's not really the bargain management expected. There's good, there's bad, but it's no free lunch. Now Romania is the new India. I expect the outcome to be the same.

what should you do...

Should I 'ride the wave' and join the new company and culture, or dust off the old CV/resume?"

1) You should always have an up to date resume. Especially when there is some kind of "restructuring" going on.

2) You can do both. Try on the new company. If you don't like it, you can always leave. You can even spin it to new employers as "I stayed on to ensure a smooth transition" to make you look like a team player. This is a great way to get into a new company without having to wade through the throngs of HR drones trying to screen you out of new-hire interviews.

Jumping ship before the move is kinda dumb -- as long as they don't make you sign anything ridiculous. It could be a much better place. Why would you leave when you don't have a reason to? What would you leave for? An unknown new company? Then you are no better off then where you are right now.

Re:what should you do...

1) You should always have an up to date resume. Especially when there is some kind of "restructuring" going on.

2) You can do both. Try on the new company. If you don't like it, you can always leave. You can even spin it to new employers as "I stayed on to ensure a smooth transition" to make you look like a team player. This is a great way to get into a new company without having to wade through the throngs of HR drones trying to screen you out of new-hire interviews.

3) I collect job adverts from newspapers. I know this sounds dumb, who uses newspaper adverts to find personnel these days? well some employers do and I find it is useful to do this. Even if it is only to find out who in my locality is doing .Net, Java C/C++, Web development, App development, Embedded etc.... I also like to keep regular track of what is on offer at online job centers/forums even if I am not in danger of being laid off or thinking about moving, for much the same purpose. At the very least it results in me being able to target my job search more accurately.

Jumping ship before the move is kinda dumb -- as long as they don't make you sign anything ridiculous. It could be a much better place. Why would you leave when you don't have a reason to? What would you leave for? An unknown new company? Then you are no better off then where you are right now.

In my experience when a merger or a wholesale outsourcing happens, the PHBs/corporate-weasels running the transition will either lay off the entire complement of people employed by the 'victim' or they will pick and choose. They will keep the best employees from either side and lay off a whole bunch of others. Few things get a PHB more brownie points than saving personnel/wage costs for the company. The employees that will qualify for the great "...opportunities HP has internally..." are the best and most experienced ones except maybe if this happens during an economic boom period, then you may have a better chance if you are young and less experienced. If there is one thing new arrivals on the job market should learn quickly is that companies will demand loyalty and hard work from you but reserve the right to drop you from the payroll the instant it takes their fancy do pep up their quarterly profit returns by reducing costs. Get used to being stabbed in the back a lot, recover quickly and be prepared to find a new job even before it happens. Choosing carefully what jobs you take is important not only because of the wages you will get but also because of the experience you will get. They pay may be good but can you market that experience easily next time you are looking for a job? I know a few people who fell into the trap of considering only the money.

Hope for the best, prepare for the worst.

Some outsourcing insights

Outsourcing is always done for one thing and one thing only. To save money. What this means is that those who get outsourced are expected to do the same work or more work for less cost. It wont be apparent immediately, often you move over to your new organization with your salary and most of your benefits intact. What happens over time is salary increases and bonuses become smaller than they would have been had you not been outsourced. Also your new employer may not backfill workers who retire or quit. Other places they start to pinch would be training and travel budgets, maybe even redo your 401k contributions to give you less, etc. Over time they will reduce costs one way or another. Hard to give advice on this since its a very personal decision. How confident are you that you can move to another job? Do you like your current job and coworkers? You need to factor these things in when deciding to move over or find a new employer. You may want to ask if you would be entitled to a severance package if you decline to move. If severance is a sizable chunk of money its another component to factor in. Best of luck!

Based on my experience

I've been on one side or the other of 35 acquisitions. My experience is that the only people absolutely guaranteed of a job when it's all done are those who are have a written retention offer as an incentive to keep them in place and not bail prior to the merger closing. Many people will keep their jobs, some will lose them, and no one other than the aforementioned can be certain of either.

If you are uncomfortable with the uncertainty around your continued employment, then there are two options: live with that stress and all of the potential negatives and positives continued employment or sudden termination bring -OR- take your fate into your own hands and go in search of employment elsewhere ahead of time and on your own terms. No one can really tell you which is better, as you have to determine what your threshold for uncertainty and stress is.

I have known many people who have done both, and have had it work out better or worse for them. Some can handle the stress of uncertainty, some really can't. For those latter ones, taking the initiative to determine their own fate was far better for them health-wise. I have always stayed on through the acquisitions, and it has always worked out well for me personally.

One last word of advice I have for everyone I have ever worked with, for, or over: always keep your resume up to date! Don't wait until you are in fear of your job or suddenly terminated to get it out and "dust it off." Changing jobs is stressful, and this is one thing you can do in happier times to help see yourself through the rough ones. Also, it's great to update it with accomplishments when they are fresh in your mind.

I always encourage my employees and peers to get out their resumes and update them no less than yearly, but ideally as often as quarterly. At the successful completion of any large project, I let my teams know "that is resume-worthy, and these are the points you should include" and list the things I think they should be proud of accomplishing.

Don't let your resume get stale, or when you're out of a job it's one more roadblock to getting yourself back in the saddle.

Good luck with the acquisition, whatever you choose to do!

Lie like you have never lied before

Although many factors are beyond your control, you can give the impression that you are really positive about the whole thing. Cooperate enthusiastically about the whole process. You can't stop it, or even slow it down, your goal should be to ensure that management think you are "part of the team" and "have the right attitude".
You need to do wholly BS stuff like ask those controlling this mess if there is some way you can help.
As a techie turned CIO turned headhunter I laugh openly at the "great opportunities" at HP or any outsourcer. My former colleague at PC Magazine Guy Kewney refers to these as "Industry Standard Lies".
They have as much credibility as the many fine offers I get in emails from Nigeria and China for wealth and health.
But you must not share my laughter.
You must sound impressed with these fake offers, maybe even apply for some. This is best done as innocent questions, like asking the new management about them, and how you could apply. They will be selling them to you, so we now have both of you faking it to each other. That will look good when they decide who to dump.
You may wonder if they will be taken in by this fake enthusiasm. The odds are better than you think, unless you have already met some HP managers, and then been amazed that people like this are allowed to be in charge of anything.
They're not exactly very bright are they ?
You will want to leave of course. Anyone who has seen outsourcing knows that the good people will want to walk.
But in any market, you want to be the one who decides when you leave. Buy some time and maybe the horse will learn to sing.

Don't be easily boxed

I.e, don't be just a programmer; learn server management too (if nothing else, you should know how servers work to help you be a better programmer), and get involved in areas outside your job scope as much as possible. That way they can't containerise you easily and therefore know fully the impact of you not being there any more. Not to mention it's more interesting to have a broader skill-set.

Don't panic

A comparable thing happened to my wife. When she told me, I started mirroring her fears and it turns out that wasn't a good idea. I gave her the advice to look around. That was just one possible advice, fueled by anxiety. She basically had to solicit for her own position. We did so, but actually aimed higher. Turns out in the new situation she's much better off.

Now I'm not saying that's going to happen here. First, take the FUD out of your head and put it besides you on the couch. Then, ask around. It's better to find out more from your manager and HR if possible. In the new situation, what kind of jobs are availailable. For young people there are often opportunities here. Keep all options open, but shop around internally as well.

Enjoy

Just to be sure: Your company/department is being bought by HP, right? I don't how HP works at all, but it is my impression that they aren't all that bad; though, there was a rough patch some years back.

Some 5 years ago I was in a small, but successful company that was bought by Informatica - I'm still here, in case you wonder. I think for the first year or so we all hated it; we really felt like we were pariahs - part of that was our fault; we we resented the whole thing, for a large part because nobody asked our opinion, and I think we all felt rather betrayed. Since then we have worked out our differences, but it didn't happens automatically - management, from the very top, understood that there was a serious problem, and they have consistently tried to do all the right things and address the real problems (as opposed to just trying to look good).

It is very important to feel welcome in a new company, and to feel that you and the way you do things enjoy respect and are valuable. In the beginning I would have left, given half a chance; now I would be very reluctant to change job.

It is very important that feel confident in yourself if you stay in your new company - they have bought you guys because they believe in your product, but also because they believe in you guys. Where the problems can come in is when the lower to middle managers aren't willing to give an inch; they have more direct influence over your daily lives than upper management.

Read your new contract carefully

One reason to outsource people for large companies here is to circumvent work councils. Many large companies here have pretty good social plans for their workers, good pension plans, good health plans, and a key incentive to move your workforce into some subsidiary is to cut those costs.

So read your new contract very, very carefully. Just because something was a given in your old contract doesn't mean it will be in your new contract. If it's not there, consider it gone. This can include things like a cafeteria that was free for the workers (i.e. part of the social plan) suddenly charging you for your meal.

Always Dust The Resume

Should I 'ride the wave' and join the new company and culture, or dust off the old CV/resume?"

Dust off the resume! *Always* dust off the resume. Keep that baby dusted even when you're happy and foresee no imminent change. I'd ride the wave for now. You'll know when the time is right. But keep the resume dusted.

I know the feeling.

Happened to me. I learned that if you are not considered a 'revenue center' you will likely be the first to go - IT Departments, internal audit, accounting are all 'cost centers', and since businesses live to minimize costs...

Given what you do, moving to HP or one of their ilk (Accenture, etc.) will make you such a revenue center, and thus less likely to be laid off. In those environments (where I currently work) if you do good work and have a good senior manager (director level, selling work to clients) you will remain chargeable, and therefore, employed. It can work out well. One thing I do recommend, though, to someone straight from University - don't fall in love with your job, because it won't love you back, and it may break your heart. Good luck!

Some tips from the "other side"

It seems that I am on the other side of the story (dark side?) since I actually work in an outsourcing company. I work in Serbia, and we provide some programming for one company in USA.

It may be that we are not a typical example, but in our case there are about 60 employees in USA and 20 here in Serbia.

Complete R&D, marketing, and all top-jobs in IT are done in USA. Here in Serbia we do very basic tasks only.

In our particular case, we are not doing the job very well. Successful outsourcing requires very good communication channels. Due to geographical difference and esp. if there is time zone difference (like USA - India) communication must be perfect. This is very hard to achieve. That would require trained people in USA to write good specs, to know how to handle tasks and everything. For a beginning, just to know what they want as a product. In practice, that would mean that good managers will do some good work and bad managers will do some bad work, just as if there was no outsourcing. Outsourcing will just make existing communication problems bigger.

In our particular case, since we work in extremely regulated industry, things are even harder. Everything in the process has to be double-checked, documented and so on. In theory, this makes things more easy to outsource, but in practice, as major job has to be done in USA, outsourcing does not seem too beneficial. In our case, only thing you can outsource are junior jobs. But they have problems figuring this, and they try over and over to send us any tasks they find "labor intensive". This won't work. Outsourcing company is not a cavalry you call when you are in trouble. If you want to treat it like a cheap labor for boring tasks, you'll be in a huge problem.

As a complete surprise to a geniuses who believe that outsourcing is a solution for poor business practices, people that work in outsourcing companies are human, too. When treated as junk, they treat their employers as junk, so they tend to leave for small increases in salaries, since their job satisfaction is low and salary in only measure. Even more surprisingly, if treated as humans, outsources tend to behave just every normal employee. They learn about their jobs, they are ready to spend some time there when salaries are not the highest in the city and so on.

It's a bit different story when large company, like HP decides to outsource entire department. I don't see how this could be efficient. It's not a problem to replace junior John Doe with Asok in Delhi, but if you need to replace every trained team-leader, every mid-manager with the Indian counter-part, it seems to me like a recipe for disaster.