05 April 2018 | Andrew Mason
Andrew Mason, director at Tsebo Facilities Solutions, discusses how outsourcing can be efficient.
Carillion's meltdown has been felt in South Africa and used to fuel the #outsourcingmustfall argument. But as is often the case, truth has been the first casualty of war in the resulting media mêlée.
The cost-cutting race to the bottom has proved the undoing of Carillion, but we must not confuse the failure of one mismanaged firm with the failure of outsourcing. In the outsourcing of FM, all developmental roads lead to the UK, where its growth was driven by the public sector.
But in South Africa, the private sector has taken up the first mover advantage of outsourcing its operations to FM service providers.
The public sector is sceptical - mainly due to the influence of organised labour and its hold over the government, which is paranoid about the hidden agenda of the private sector, outsourcing and the perception of infringing workers' rights.
The efficiencies and commercial benefits are lost in political opportunism. The rise in global political popularism, along with clamour for nationalisation, means that outsourcing in South Africa is cast as a political issue, not a business one. For many firms to survive, they need to drive efficiencies and improve their manual ways of doing business.
Continuing to drive efficiencies could result in job losses, whether improvements are executed internally or by an outsourcing provider. Statistically, there are more employees that get retrenched because of company failures than job losses caused by outsourcing efficiencies. Outsourcing public services would benefit service delivery and make our corrupt civil institutions more efficient.
I've been involved in advising the South African Facilities Management Association on a national survey of FM. Key findings showed 87 per cent of firms retain FM in-house and outsourcing is set to grow at double-digit rates.
Protecting transferring workers' rights is enshrined in TUPE-like law, so it is encouraging to see a ripe environment for outsourcing despite government hostility.
Andrew Mason is a director at Tsebo Facilities Solutions