Public Jobs Went Private, Work Life Soured

When a meter-reader comes to your home to check your monthly electricity consumption, they wear a BC Hydro uniform, but they are, in fact, no longer employees of BC Hydro. They work for Accenture, a Bermuda-based, for-profit, multinational corporation. Similarly, when you call the Medical Services Plan with an inquiry, you are actually now speaking to an employee of Maximus, a U.S.-based multinational.

But, does it really matter? Does the shifting of the employees from the broader public service to for-profit corporations really change anything, either for the workers, or for the quality of the service?

The answer, according to a new report from the Canadian Centre for Policy Alternatives, is yes.

'Alternative Service Delivery'

Since its election in 2001, the current British Columbia government has implemented widespread neo-liberal socio-economic restructuring. Part of this process has been the establishment of an Alternative Service Delivery (ASD) plan to "contract-out" or "outsource" some public service delivery to private, for-profit companies.

The CCPA study finds that, contrary to the government's claim that "this is alternative service delivery, not privatization," ASD is a euphemism, and does indeed represent a form of privatization.

The report investigates how outsourcing has impacted government services and affected the economic security of the workers involved by focusing on two case studies:

1. Outsourcing of "back office" work at BC Hydro to Accenture, including customer services, IT services, human resources, financial systems, purchasing, and buildings services
2. Outsourcing of administration of the Medical Services Plan and PharmaCare to Maximus.

These case studies reveal a large gap between the virtues attributed to ASD and the reality of what ASD looks like on the ground

ASD is being brought in with promises of innovation, technological improvements, intelligent reorganization and re-engineering -- all of which are purportedly saving the government money while still allowing the contractor to make a profit. Yet when we look at these privatization schemes in more detail, we learn that their main tools for "innovation" are cost minimization, de-skilling staff, surveillance, increased hierarchical control, and a unilateral push by the employer to make people work harder -- hardly what most would view as "innovative."

New fears of job loss

The study finds that the economic security of the workers involved has been affected, as their bargaining power has been undermined (as workers are no longer part of a large public-sector workforce, but rather constitute relatively small bargaining units negotiating with large multinationals).

In the case of the Accenture workers, there is a fear of future job loss, as workers operate under the underlying threat that their jobs could be further outsourced to offshore low-wage jurisdictions.

At Maximus, while there was not the same threat of offshoring (due to privacy issues), there was the separation of the bargaining unit from the larger public sector workforce, substantially reducing employees' ability to compete for other jobs and move within the civil service.

Stressed and devalued

While important differences between the two cases emerged, some common themes were evident. In both outsourcing initiatives, employees indicated a sense of being valued less as a result of the outsourcing.

In the name of efficiency, there is increased employee monitoring and surveillance, which adds to job stress.

In both workplaces, respondents reported that the hierarchy is more rigid and the work environment has become tense. There is a trend towards reduced training, which is completely at odds with the notion that ASD is about innovation and making improvements.

An "employee engagement" survey at Accenture covering the financial years 2005 and 2006 showed that employee morale and job satisfaction was chronically low.

Most workers at Maximus reported no longer feeling the ownership in their work they had before. This, coupled with the stress induced by their employers' changing expectations, has resulted in a very demoralized workforce. The necessary trust between employers and employees has been undermined by the corporate practices introduced by the for-profit companies.

All of the workers interviewed had concerns that the level of customer service has deteriorated. Workers at both Maximus and Accenture reported that while the response time may be fairly quick, if information beyond "the basics" is needed, customers frequently cannot get access to the people who can actually help them.

Study interviewees felt quality was suffering at the expense of quantity, with performance measures such as volume of calls handled trumping the quality and accuracy of the information provided to the public.

The workers and their union representatives regard the cultural shift with grave concern, as they witness the core values of public service undermined by outsourcing.

Declining morale

Privatization leads to an erosion of the "intrinsic satisfaction" that public employees used to get from public service delivery. The lack of long term stability that results from on-going contract renewals and the realities of corporate culture such as corporate takeovers (there are rumours that Maximus may be bought) create uncertainty in the continuity and quality of service for both workers and the public.

The report concludes that the results of outsourcing appear to be ongoing operational problems, reduced employee engagement, and a decline in worker morale. Outsourcing changes the culture of these workplaces in subtle but important ways, which has consequences both for the workers and for the quality of public customer service.

These case studies demonstrate that ASD is not a panacea to address accountability and fiscal responsibility in governments. Rather, it is an ideologically-driven approach intended to restructure government services to serve the imperatives of ill-conceived notions of efficiency and productivity. A broader public dialogue is needed about the purported merits of outsourcing. And we need to examine whether there are other, more cooperative alternatives to enhancing government services and performance.

Related Tyee stories:

• How We Are Outsourcing BC (Series)
  
• Public Spending Behind Closed Doors
  Private contracts involving public money are insulating government business from needed public scrutiny.
• Health Contractor Maximus Fined in BC, Investigated in US
  Firm has long record of legal controversies.