All eyes are on the Irish outsourcing experiment

Despite rising opposition before it was even publicly announced, Independent News & Media’s decision to outsource the production of its main Irish titles has moved ahead without incident and has industry rivals watching developments carefully.

The company’s plan to outsource the majority of production for its three national titles – which was first confirmed in late February – has moved at a reasonable pace since then. Today, the majority of content from the newspapers is being subbed outside of the group’s main offices in Dublin’s Talbot Street.

The main reason for this smooth transition was undoubtedly the company’s decision to offer a generous severance package to those who chose to take voluntary redundancy. The initial package offered eight weeks’ pay per year of service, with a minimum amount of nearly £40,700 and a maximum amount of £170,000 – which compares well with the basic statutory package of two weeks per year of service.

‘The company put on the table an extraordinarily generous package,’said Séamus Dooley, the Irish secretary of the NUJ. ‘Arising from very solid union agreement, terms of employment were already very good at IN&M, and eight weeks’ pay per year of service was a significant amount.”

Initially, IN&M looked for 34 redundancies, but it said it was expecting to be over-subscribed, and could let more people go, depending on demand. With £11.5m set aside to cover the plan, it was clear that there was room for more than 34 redundancies, and while no official figure has been given, it is widely accepted to be well in excess of this.

While opposition to outsourcing had been expressed by staff at the company’s NUJ chapel meeting a week before the announcement, it was clear that the offer swayed many. When the outsourcing plan was put to a vote in April, it was rejected by three votes.

A stronger offer was soon submitted, promising a £6,800 increase on the minimum amount paid out, while simultaneously threatening to withdraw the offer entirely and go ahead with redundancies regardless. The next vote was carried by a majority of 43 votes.

‘People were not voting in favour of outsourcing – they were voting in favour of the redundancy package on offer,’said Dooley. ‘I don’t believe there’s anything contradictory about their acceptance of the deal.”

The main recipient of the outsourcing has been RE&D, which was set up by two former IN&M employees, Michael Wolseley and Graham O’Neill. Wolseley said the wages paid to staff are comparable to what they would have been paid before and are ‘above market rates”.

‘I’d say the split between entirely new staff and those coming from IN&M is around 50/50,’he said.

RE&D operates a seven-day week and has two shifts comprising around 45 full-time staff and 10 shift workers. Wolseley stressed that overall say on content and layout still rested with senior production staff in Talbot Street, who have been retained by IN&M to manage content from the main offices and proof-read outsourced copy.

As part of its operations, RE&D is networked to IN&M’s offices and staff have access to files just as they would if they were physically in the same office.

‘Our staff do the small changes that any sub would do and take instruction from production at the main office,’said Wolseley. ‘The major decisions and changes are done by the senior production staff in Talbot Street.”

But Dooley said that even if the salary is comparable, the overall work environment and opportunity to gain promotion may not be – and anecdotal evidence suggests that editorial staff are finding the change difficult to deal with.

‘Even in terms of atmosphere, things will have changed in their main offices, and now staff won’t be able to build up a relationship with subs as they would have before,’he said. Dooley added that the majority of those who have left IN&M so far have not taken up work in RE&D, but have either taken a break from journalism or gone freelance.

While RE&D looks after the ‘live’content such as news and business, a Toulouse-based company, Print Media 81, is charged with editing the lifestyle and magazine-type content for the weekly supplements. This company was set up by a former employee of the Sunday World newspaper, which is also owned by IN&M.

At present, neither of the other two big print media companies in Ireland has made any move to follow IN&M’s decision, but it is clear that they are watching to see how things pan out.

Anthony Dinan, managing director of national and regional newspaper group Thomas Crosbie Holdings said that it is not a move he would be keen to make, but it is one that a company must consider to stay competitive.

‘IN&M has made a move and we have to respond to it,’he said. ‘It’s not a decision I’d take lightly, but it’s something we have to look at and give consideration to, among other things.’

While it is still too early to say if the move has been a success, it is clear that the sector is watching to find out. Even if it is successful as a cost-cutting measure, many people remain unsure of the effect it will have on quality and, as a result, readership. IN&M’s peaceful transition came at a heavy price in terms of redundancy deals – one others may not be willing to pay.

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