Case Study: HR Outsourcing at BP Amoco
British Petroleum, or BP Amoco, is a leading international energy and petrochemicals company. Currently, it operates in more than 40 countries and has more than 80,000 employees, with an equal or greater number of retirees. Several years ago, BP decided that drilling and finding oil was its primary mission. Everything else was deemed secondary. The U.S. company Exult defined this type of full service HR outsourcing in December 1999 when it announced a $600 million, seven-year contract to create and operate a global HR services organization for 50,000 U.S. and U.K. employees of BP Amoco. The Outsourcing Framework - Creating a Contract Roadmap
Exult's initial contracts under the outsourcing agreement covered BP Amoco employees in the United Kingdom and the United States, or approximately 70% of its total employees and annuitants. Exult and BP Amoco collaborated on identifying 18 separate processes involved in BP Amoco's HR organization: training, organization development, HR strategy, labor relations, compliance, expatriate relocation and administration, information services, benefits, compensation, employee relations, vendor administration, payroll, employee development, recruiting, severance, performance management, domestic relocation, and information technology Each process was divided into component tasks or functions and responsibility for each was allocated either to BP Amoco or to Exult. In general, Exult is responsible for systems design and implementation, routine employee communications, data gathering, processing and retrieval, management reporting, vendor management, and overall administration of related HR functions. BP Amoco is accountable for strategic planning, policy decisions, employee relations, legal compliance, and professional resources. Some BP Amoco employees involved in providing the HR services became Exult employees. BP Amoco paid severance costs for its employees whose employment was terminated...
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