Bank’s IT workers threaten strike over outsourcing deal

Unionized members of the Bank of Ireland’s IT department are threatening to go on strike if they aren’t involved in final negotiations with Hewlett-Packard Co. on a proposed outsourcing deal.

Officials from Dublin-based Bank of Ireland and the union that represents its IT workers met recently for their first talks since the outsourcing plans were disclosed earlier this month. HP would take over management of the bank’s networks and its desktop, midrange and mainframe systems as part of the deal, which is expected to be worth US$600 million over seven years.

The planned agreement would also include the transfer to HP of about 500 workers from the bank’s IT arm, where roughly one-third of the employees are members of the Irish Bank Officials’ Association.

On April 16, two days after the deal with HP was announced, the IBOA served Bank of Ireland with two weeks’ notice of possible “industrial action,” which includes the threat of an all-out strike. That followed a vote in which 83 per cent of the union members who took part sided with the plan to send the notice to the bank, according to a posting on the IBOA’s Web site.

Calls to IBOA general secretary Larry Broderick weren’t returned by press time, and it wasn’t clear how many bank employees actually participated in the vote. But on the union’s Web site, Broderick is quoted as saying that the vote “testifies to the huge concern and uncertainty” about the proposed outsourcing deal among IT staffers at Bank of Ireland.

The IBOA’s top priority is to prevent the bank from proceeding with the outsourcing arrangement until there are “full negotiations and agreement” with the union, Broderick said. Otherwise, IT workers at the bank “will not be cooperating with any proposal to outsource,” he warned.

Anne Mathews, a spokeswoman for Bank of Ireland, said bank officials “couldn’t have meaningful discussions” with the IBOA until a preferred outsourcing vendor had been chosen. Mathews added that the contract negotiations with HP are expected to take four to six months to complete. The union will have a voice in those discussions, she said, declining to comment about what transpired during this week’s talks with the IBOA.

Growing Unrest

In an April 18 research note about the strike threat, Gartner Inc. analyst Diane Morello wrote that she expects to see more actions by IT workers to protest “what they perceive as unsettled employment situations” as a result of job cuts and an increase in the amount of IT work being outsourced, sent offshore or farmed out to contract and temporary workers.

Morello said IT managers need to anticipate potential worker backlash against outsourcing deals, even if their IT departments aren’t unionized. Companies that don’t do so risk work slowdowns or other productivity drags, she said. “The important thing is to communicate honestly and respect your employees,” Morello added.

That’s precisely what DaimlerChrysler AG executives did before the automaker last year began outsourcing maintenance of about 150 applications that support its engineering, sales and manufacturing operations to offshore services firms Infosys Technologies Ltd. and Syntel Inc., both based in India.

DaimlerChrysler held a series of “town hall” and breakfast meetings at its facility in Auburn Hills, Mich., in an effort to do “whatever it took to answer questions and concerns” about the outsourcing plan, said CIO Sue Unger.

Unger said the meetings helped her and other IT managers convey to the 100 internal staffers and on-site contractors who had maintained the applications being outsourced that they would be redeployed to work on more strategic efforts, such as Web services and portal software projects.

The outsourcing program has been “very successful,” Unger said, adding that it has helped DaimlerChrysler cut its IT costs and provided the affected workers “with a brand-new career.”