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Utility sets IT department on path to self-destruction

Patrick Thibodeau and Jaikumar Vijayan | Sept. 24, 2013
Northeast Utilities in New England tells IT employees it may shift work to overseas firm, but hasn't set deal or severance plan if it comes to it

Northeast Utilities has told IT employees that is considering outsourcing IT work to India-based offshore firms, putting as many as 400 IT jobs at risk.

That's a scary thing for any employee to deal with, but the company is also saying that a final decision has not been made. Everything is up in the air. Where does that leave the utility's IT employees and IT department?

With this move, NU may be prompting its best IT employees to head to the exits, creating a risk that key positions will become vacant. It's a morale crushing announcement, making it difficult to lead an IT organization.

It also creates IT security risks, since disgruntled employees are considered a top threat in any organization.

When you consider all the risks that NU is inviting, this heads-up to employees in advance of a firm plan is "kind of mind bogglingly stupid," said David Lewis, who heads a Connecticut-based human resources consulting firm OperationsInc, especially "since this is IT of all places."

But Lewis and others aren't discounting the idea that NU's internal announcement to IT employees is deliberate and calculated. Keeping details incomplete and uncertain is destabilizing. Employees will begin job hunts and contact recruiters, said Christine Santacroce business development manager for Modis IT Staffing in Hartford. She has already heard from some NU developers.

As IT workers leave in advance of the outsourcing threat, it may reduce the number of severance packages that NU has to offer to employees, saving the company some money. But this destabilization "also becomes self-fulfilling," said Santacroce. With the IT department falling apart, NU might say that "we really need to do something to secure the business" and bring in the outsourcers, she said.

Lewis calls its "artificial attrition," where "you are creating a run to the door before anything is announced." That is the only strategy that he can see to NU's handling of its outsourcing moves, barring some legal disclosure requirement in that industry. "I'm not saying it makes any sense, but you can see it as a strategy," he said.

NU's plans are triggering a backlash. The state attorney general has asked for information and meetings, and political leaders, in particular State Rep and House majority leader Joe Aresimowicz, are urging NU not to eliminate the jobs. But Aresimowicz is uncertain how much success the state will have.

"I think, at this point, I really do feel it's a done deal," said Aresimowicz of NU's outsourcing intentions. But he's still holding out hope that something can be done to prevent or limit the IT outsourcing.

Other than to confirm the possibility of outsourcing the IT department, a utility spokesman declined to discuss any details concerning its outsourcing plans.

 

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