Outsourcing leader warns of government skills shortfall

Association chief welcomes post-election outlook for outsourcers, but says government should pay its own managers more to get the best from contracts

Government needs to step up its hiring of talented managers to get the best of IT and business process outsourcing, the chief executive officer of the National Outsourcing Assocation (NOA) has told UKAuthority.

Kerry HallardKerry Hallard expressed her reservations despite issuing a positive public statement on the outlook for outsourcing following the election of the Conservative government. She welcomed a stable outlook and said that outsourcers can see plenty of scope for new business in government IT; but added that there are worries about their customers' capabilities to manage deals successfully over the long term.

"I think it's going to increase, and Cameron seems to be behind outsourcing," she said. "But from recent conversations I've had with a host of government bodies it seems they haven't got the skills to do it properly and it's a real concern.

"Whether it's IT or business process outsourcing, the government's got a significant skills deficit to get maximum value. They really need to invest to address that issue.

"The key area is that the government is lacking the ability to manage the end-to-end process of outsourcing programmes. It seems pretty good at the procurement piece and has been perfecting that, but it doesn't have the skills set for relationship management."

Hiring and salaries

Hallard said the solutions are likely to be hiring policies and salary levels. She said she had often heard that public authorities would only hire internally for relevant posts, and this can often lead to appointments of senior managers who struggle with large, more complex outsourcing contracts.

"You're using the same resource that is already thinly spread, and perhaps not up to the mark, to manage even bigger, more complex outsourcing," she said. "It doesn't make sense."

She also claimed that government needs to pay higher salaries for many of the roles as it is failing to attract the best talent. Although organisations can save tens of thousands of pounds on a senior official's salary, this can lead it to lose millions in terms of productivity and performance.

"You weigh them up and realise where the money should go," she said.

Happy with election

Despite her concerns, Hallard welcomed the general election result and predicted it will lay the ground for an increase in outsourcing for a wide range of processes.

"The NOA believes that this Conservative government will bring some welcome stability to the UK's outsourcing industry," she said. "Information Services Group's first Outsourcing Index of this year saw sourcing in the UK slow, most likely due to uncertainty surrounding the election and lack of faith in a potentia Labour government.

"Service providers will now feel more secure. Spending on public sector outsourcing almost doubled to £120 billion under the coalition, and that's a trend we expect to continue over the next five years.

"We expect to see a plethora of new outsourcing deals, both public and private, over the coming months."

She also urged the government to keep a promise to increase the proportion of procurement going to small and medium enterprises from 25% to 33%, and said it needs to be more transparent in its use of public-private contracts.

Picture: Kerry Hallard, from NOA.