Interserve in administration: Workforce lessons to be learnt from large service providers

Interserve

Following the heavily-publicised liquidation of FM giant Carillion last year, serious questions were raised about the outsourcing industry, and particularly the government’s reliance on the outsourcing of important public services. It seems these fundamental questions may be asked again with the recent news that the support services titan Interserve has gone into administration. Razor thin profit margins; opaqueness of construction and outsourced contracts, and a high cost base are amongst the many reasons cited for Interserve’s demise, however coming from a recruiter’s perspective we often see different red flags coming from the staff on the ground of major service providers.

 

Bidding wars

One of the key characteristics the majority of FM professionals share is a sincere desire to provide the best service possible for their customers, whoever they may be. In the outsourcing world, particularly in the public sector, quality of service is often trumped by cost efficiencies. Bidding wars tend to drive contract values down to the point where delivering a high-quality service becomes impossible. These cost-cutting tactics have a range of knock-on effects such as reduced staffing levels which often result in one person doing the job of two or three. This budget approach is obviously important for winning contracts, however from a recruiter’s point of view it is a sure-fire way to generate frustration and negative word-of-mouth within the workforce.

 

Top talent steer clear

Building on the previous point, employee negativity tends to spread like wildfire throughout the industry. As specialist recruiters we are acutely aware of how candidate’s perceptions of an organisation can impact their decision to apply, and peer word-of-mouth is one of the most influential sources of information when they are developing these perceptions. We come across this quite often, with candidates becoming immediately disengaged as soon as an organisation is mentioned. This obviously makes recruiting difficult, particularly when recruiting the top talent who are often spoilt for choice.

 

Who’s the Boss?

A regular complaint we hear from disgruntled employees within some large service providers is that there is not a clear management structure in place. In certain organisations, the outsourced contract sector brings with it a high level of staff turnover, which is a perfect breeding ground for hierarchical confusion. Not knowing who to report to, strangers coming and going, feeling like a number and not a person, and a lack of liability are common grievances we hear on a daily basis. In addition to the obvious organisational failures which can arise, high levels of workforce turnover mean that building an effective and professional team can be very difficult if not impossible.

 

Although these issues may not be direct and tangible KPIs that Senior Management closely monitor, in our experience they often signify the difference between success and failure. It is vital that employees feel they are part of a community, a valued piece of a larger puzzle – not just another replaceable cog in a profit-making machine.