One giant leap...
Last summer, Unilever and Accenture signed one of the biggest global HR outsourcing deals. Reg Bull and Malcolm Howard, who are implementing the contract, face up to the challenges ahead
Date:
22 February 2007
Source:
Guide to HR outsourcing
Page:
16
Every week, in an unremarkable three-storey office block in Walton-on-Thames, history is being made.
Here, from Tuesday to Thursday, 80 HR professionals and IT specialists from Unilever and its new partner, Accenture HR Services, sit cheek by jowl and work through the software being designed to support colleagues in 88 countries.
At the same time, an army of HR managers around the world is on red alert to drop everything and come to the phone to be consulted on fine-tuning the process for their country or region.
This massive international effort is the reality of embedding what is almost certainly the biggest and most complex HR outsourcing (HRO) agreement ever to have been conceived, let alone agreed. Priced at nearly $1 billion over seven years, the contract, signed last summer, will cover varying degrees of outsourced delivery of HR services in nearly 100 countries when Unilever’s Latin American sites switch to Accenture next summer.
The group’s global HR workforce is expected to reduce by two-thirds from around 3,200 people to roughly 900. Numbers are approximate, but the company is aiming at a ratio of one HR professional to 210 people. And in every corner of the globe, the function will be transformed.
Managing this vast project are Reg Bull, Unilever’s senior vice-president for global HR transformation, and Malcolm Howard, who delivered the deal for Accenture. Bull is a down-to-earth character with a background in organisation development, given to dressing down, wearing colourful shirts and littering his speech with jokey hyperbole (like telling a recent conference that Unilever was taking a “Machiavellian” approach to internal communications).
Howard has years of outsourcing experience with Accenture, including setting up e-peopleserve, the company’s pioneering joint venture with BT, and managing the tricky contract with Cable & Wireless, whose workforce shrank until HRO was considered no longer viable.
The Unilever deal should be easier in at least one respect: Howard says it will double the number of countries in which Accenture’s outsourcing business works.
However, it’s incredibly complex. Accenture is providing a fully outsourced service for Unilever in half of the 100 countries. In the other half, the in-house HR team will remain but will be trained to use the software that Accenture is hosting to enable Unilever to produce global HR metrics.
But before HR jobs are handed over anywhere, the function is first being reshaped throughout Unilever into the business partners/experts/service centre model. Countries like the UK have half-shifted to that model already and now have to shift further. Others aren’t there yet. The usual approach to outsourcing is to hand over the HR administration first and then transform what remains.
With such variation, the contract has to cope with the certainty that the group’s business will grow in some countries and shrink in others. Each country has its own schedule within a master services agreement. Both sides can agree changes to a schedule. “Provided that the countries don’t all shrink, we should remain happy,” says Howard.
To govern the contract there is an executive leadership committee at director level and a global management committee led by Bull and Howard. There are also regional bodies that escalate issues they can’t manage themselves.
“We worked really hard to put in place a governance structure that won’t lead to us sinking under the weight of bureaucracy but where there’s still a global hand on the tiller,” says Howard.
How is it for you?
But Bull is somewhat impatient with contractual detail and prefers to discuss the informal contacts binding the partnership.
“We spend a considerable amount of time just talking about the relationship. For instance, this afternoon, I will be talking to a couple of senior Accenture people about how it’s going. We have probably done this 10 times since June or July. This is a meeting without an agenda and we don’t do it over dinner and it’s not minuted and not referrable. So people can’t quote your words back at you.”
Bull adds that, on an irregular basis, they ask each other “How is it for you?” round the water cooler.
What comes out of these informal contacts, he says, is general information about how people work.
He gives the example of a recent misunderstanding between an Accenture employee and a Unilever employee about an aspect of learning delivery, which led to a whole week’s worth of emails flying around. Bull put the issue to one of his unminuted meetings – and got it back on track: “Someone had alighted on something and converted it into a possible problem.”
Misunderstandings
Bull speculates that such misunderstandings may sometimes be deliberate. Not everyone at Unilever is happy about the transformation. Most line managers surveyed were opposed to it. Then there are the inevitable redundancies in the HR function – for instance, among the 100 people currently in Unilever’s HR service centre at Walton-on-Thames. Although some are temps and a few will transfer to Accenture, which is keeping a service centre there partly for that reason, a lot of work will disappear.
Howard says that up to 70 per cent of the HR transactional work currently carried out in the UK will move to Accenture’s service centre in Bangalore. Some “high contact” work, such as specialist recruitment, will continue to be done at a local level.
For those who stay in Unilever HR, the job will be very different. Bull says he has talked tough to get home to people the extent of the change. But Tim Palmer, from outsourcing consultancy EquaTerra, who advised on the contract, adds that Bull’s personality has been critical in gaining acceptance of change: “He has real leadership qualities – people will follow him over the edge,” he says.
It helps that Unilever is taking an integrated view of HR talent management, mapping careers and designing new programmes.
For most people, Bull explains, the concern is “What’s in it for me?”. He believes that the integrated approach is proving successful: “We presented it last week to the HR team in the Netherlands and we were almost carried out of the room on a wave of adulation.”
Many people recognise that the experience is helping their careers, he adds.
So the message is plain – it may be painful, but, far from messing up your career, transformation on this scale could give it a boost.