As new age industries scale up and the era of entrepreneurial enablement takes shape ; business school options range from start ups, deeply funded e-commerce companies to outsourcing companies, one element that’s fallen on the roadside is the understanding of Industrial Relations Risks. Business Schools over a period too have shifted focus from honing ER skills and sharing cases which relate to true collective bargaining scenarios or even simulating what the new age collective bargaining can mean.

Changing Language does not derisk

While corporate language and management theory, all have transformed the once not so cool IR function to the more engaging and cooler Employee Engagement and similarly christened functions, these usually get defined for people who are directly engaged and employed by the company. Taking this to the outsourced service provider is always hit with the need for Arms Length approach.

The Dark Glasses Of Outsourcing

Outsourcing non core activities to other startups who now specialise in logistics, cleaning, almost anything is the norm. Yet, the definition of core and when does non core become core and over a period, how much scale you outsource is what impacts derisking.

I remember attending an awards function where the sharp, young HR Leader of a newly funded e-Commerce company on the dias, when asked, what were his three top priorities, answered “Employee Engagement, Driving a Customer focussed environment and enhancing revenue”. In a business that depends essentially on the last mile of Delivery capability, positive ER scenarios must have featured, but then, ER is the unspoken, the not visible part in the new age economies.

It’s already here : look around

1. A global Major BPO planning to shift from Cabs to Metro as mode of transport for staff came to a screeching halt when transporters and their drivers who would have lost livelihood came and sat in the Reception area. A settlement and a phased approach worked after much fire fighting.

2. The collective defiance of delivery Boys for a large E Commerce Major which made headlines was around working conditions (read washrooms) and benefits (Health benefits, Insurance for Bikes).

3. Deep pocket invested Delivery Companies have had significant challenges with core operations, as employment terms have been changed multiple times. From Guaranteed cash flows, to a per kilometre and a survival cash to a minimum delivery guarantee sought from the “Associate” ( calling them employees would create risks). This industry has seen some of the recent collective protest and collective bargaining, impacting multiple small food startups. Some of these disputes around compensation were even violent and even had external Unions trying to create space.

All these are here and now collective bargaining scenarios. More and more HR practitioners, while focussing on Employee Engagement, Training, Budgets for Managers to take teams out, etc have to wake up to this external yet internal reality their business models have created. Any aggregation can create risks, if people feel they are not handled fairly, inside or outside an organisation. In a scaling economic sector, there will always be fly by night vendors and there will also be opportunist Unions. The accountability is with the Principal Employer. Please remember, the laws have not changed, fairness and engagement is expected at all levels. Outsourcing does not take away accountability. Scale defines risk.

– Sandeep Bidani

All opinions are personal and do not represent the views of organisation/organisations I work for or have worked with.

Sandeep.Bidani@positivemomentum.com
Follow me on twitter @Sbidani

The author has over 25 years of extensive experience in CHRO roles in multinational companies in the BFSI, IT and ITES sectors, including Amex, KPMG & IBM with Extensive Shared Services Experience across multiple geographies. He has cross-cultural experience as a CHRO and a Management Consultant , having lived and worked across India and the Middle East, managing projects in India, Middle East, Philippines and UK. He was recently named amongst the Top 100 HR Influencers in India on Twitter,with views on leadership diversity & work environments widely published on social media.