We need to address the cause rather than just band-aiding the symptoms.  Update on earlier Blog on Outsourcing

ABC 4-Corners has reported on many cases of privatisation or outsourcing of government community services including:

  1. November 2016 ABC 4-Corners reported on the abuse and neglect of displaced children in residential care which I am sure left a number of the viewers feeling angry and disgusted.
  2. Prior to that we saw the report on the outsourcing of some tertiary “TAFE” level education courses to the private sector referring to rip-off’s and abuse that negatively impacted vulnerable people’s lives.  Whether these abuses where legal or illegal is not for me to judge but regardless, it was immoral and left me feeling disgusted.
  3. 27th March 2017 4 – Corners again reported on abuse and neglect but this time it was in disability group homes a similar story to the children in residential care and again was disgusting and sad.

The common threads in each of these stories is the outsourcing government services to providers where some were taking advantage of vulnerable people in the community not to mention the waste of tax payer’s money.  The worrying thing with this is that the outsourcing systems, as they exist, seem to accommodate the unethical and abusive activities without accountability.  I am sure there are also the ethical providers doing the right things.

In the 1990’s we reviewed a portion of the government disability services where abuse and neglect was common place, which may have contributed to the outsourcing of the disadvantaged and disabled assimilation into the community.  However, the “outsourcing” or “privatisation” needs fundamental controls as if these services were provided in-house so there is a clear understanding of the service outcomes.  This is not that difficult as there is a community expectation that government/community data must be accessible and transparent on the provider (say department) and any third persons monitoring such as audits/inspection services.

For some reason, in Australia, we like to provide the “recipe” which specifies how it is to be done rather than define the “outcome” which specifies the end result.  The outcome based approach empowers the deliverer, encourages initiative and innovation while ensuring we get the measurable outcome we needed including the standard required.  The recipe approach is prescriptive and more difficult to measure and control while providing opportunities for the contractor/deliverer to interpret the recipe as suites them and therefore enables the system to be manipulate in their favour – “but I just followed your instructions”.  The outcome approach is easier to specify especially the inclusion of quantifiable checks and balances as an assurance of the delivery.

In the disability and children in care areas we have organisations with the social discipline professionals, like in a number of not-for-profits, which could provide the independent random audit services at minimal costs – it is common place for financial audits so why not audit the core of the service.

It is so frustrating that government and private sector implements so many outsourcings, privatisations, sub-contracting without outcomes clearly defines and no basic checks and balances.  It seems it is easier to take an out of sight out of mind approach?  The 4-Corners programs allege neglect and routing of the system has gone undetected for long periods, even years, then it is clear the organisational checks and balances were obviously never in place.

Does the Human Resources department have a responsibility when the organisation decides to outsources or sub contract services? 

It is our opinion that a good Human Resource team would take responsibility to ensure the checks and balances are in place whether the services are in-house or outsourced.  Outsourced or contracted services are the government department’s core business or at least will be contributing to the organisations core purpose and therefore this contribution needs to be measured.  The unfortunate issue is that organisations have not integrated the organisational development and human resource management.  If this was a combined function it could play a proactive role in providing guidance and support in developing, monitoring and controlling performance measures as well as insuring programs are integrated and supportive:

  1. HR policies and procedures, together with the monitoring is clearly a HR responsibility.  However there is a wider responsibility for overseeing the development and maintenance of the wider organisations policy and procedure framework;
  2. The performance management system monitors the organisations success in the delivery of the strategic direction and the corresponding operational plans.  A component of the performance measures deal with the “proof of compliance” to procedures and processes.  This proof of compliance will involve operational audits that measure the compliance to the policies, procedures and processes.

A number of the organisations operational performance measures relies on the policies, procedures and proof of compliance (operational audits) together with the financial and operational delivery measures.

In all the cases the ABC 4-Corners programs exposed, there does not seem to be anyone taking responsibility for the outcomes.   Therefore HR has to take a degree of responsibility for the disasters and in these cases the impact on the “clients” and their families.  While we sit in front of the TV and watch these horror stories I am sure there are nice stories as well.

In Conclusion

If the tertiary education, “resi-care” and disability group homes had been outsourced using an outcome-based approach that includes a comprehensive performance management system, these situations would be less likely to have occurred and fewer opportunities for shocking stories.  The performance measures would need to incorporate operational audits, then the reported disasters could have been minimised if not eliminated.

Outsourced services must be managed as well as, if not better than, if the services were delivered in house.  An appropriate performance management system must include measures that are supported by the policies, procedures and proof of compliance.  The talk over the past couple of days about installing cameras in the group homes may assist in gathering “evidence” and may reduce the opportunity for the abuse but this is not an ideal outcome approach and certainly will not protect all the clients.  This is a symptom band-aide and not a cure for the cause which goes back to the approach to the outsourcing or privatisation of the services.  The correct solution is the establishment of the proper checks and balances on each stakeholder’s outcomes – whether the provider, the “clients”, the family or the government.

The sad aspect of all of these programs is that, if basic good governance and sound management practices had been applied, then the disastrous situations that have impacted on so many people’s lives could have been avoided or at least minimised.  If this article can make the slightest difference in any of these outsourced community services then we will have been some contribution.

Max Underhill

Managing Director

Maxumise Consulting Pty Ltd