Niyamath Parveez

Not many people in Britain have trust in banks or the banking system these days but the one where they have a lot of mistrust towards is the Royal Bank of Scotland. Such is the hatred towards Sir Fred Goodwin, the former chief executive of the group, who has coined in huge bonuses despite being at the helm for the banks demise; his homes have been attacked by graffiti artists and local thugs. Goodwin has spent a lot of time out of the country but this has not dampened public anger over him and this looks set to continue for a long time to come. The bank is now majorly owned by the government, over 70% is in the hands of the government but this does not appear to be an indication that controversy surrounding it is going to die away at any point soon.

Job losses in the banking industry have come far and wide in recent years and have been the source of much unhappiness. When the pension and bonus payments claimed by the fat cats in charge of these organizations are discussed, it is inevitable that people at the bottom end of the market who have lost their job will feel angry. Given that RBS is now in the hands of the government, the news that the company may be looking to outsource a large batch of its work is not going to be met with public acclaim. In fact, a whole new degree of public hate and animosity may be on the cards with regards to this famous bank.

The company has a huge need to trim its labor costs and sees outsourcing as a fantastic way of doing this. The organization has so many backroom jobs and maintenance projects that streamlining their actions and utilizing outsourced skills at a far lower rate of pay is a solution that will be a great help. For any firm needing to rapidly and drastically reduce the amount of money it pays on labor, outsourcing to a location like India is a great solution. It just may not be a popular one with the people who lose their jobs, their friends and family or indeed the local community who will also feel the tremors of job losses. The overall aim of lower labor costs needs to be balanced out with the public needs but when you have to reduce costs by over $4m before 2011, it is hard to hear the cries and pleas of those being made unemployed.
RBS does appear to have a strategy for their outsourcing plans and they mainly revolve around the non IT elements of their business. This should allow them to keep a safe control over the data protection requirements they need to adhere to but should allow them to benefit in other areas. It is far too early to say whether RBS will be successful in cutting the costs they have aimed to but outsourcing key tasks to India is the right move for doing so, even if it is not the popular choice.