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Aer Lingus outsources payroll and HR to cut costs

Aer Lingus has outsourced its payroll and its administrative human resources functions to the Irish arm of NorthgateArinso.

The move, which had been under discussion with airline staff for the past six months, marks the single biggest contract win ever for the Irish unit of the outsourcing company.

NorthgateArinso, which is headquartered in the UK and owned by private equity giant Kohlberg Kravis Roberts, will handle all payroll functions for nearly 4,000 Aer Lingus staff.

It will also establish a shared HR services centre at Dublin Airport.

That will be based in an Aer Lingus facility, but a final location for the operation hasn't yet been identified.

Key HR decisions and functions will continue to be handled by Aer Lingus management.

The carrier's HR director is Michael Grealy, who was formerly the head of HR at Bank of Ireland.

The airline's HR administration, recruitment and staff training requirements will also be handled by NorthgateArinso, whose clients in Ireland include Ryanair, game maker Hasbro and McDonald's.

The outsourcing move by Aer Lingus is a wider part of its cost reduction bid which has seen it target about €100m a year in annual savings under its 'Greenfield' transformational plan.

A spokesman for Aer Lingus confirmed the outsourcing contract and that the move had directly affected 30 staff.

He said that 15 of those had already chosen to move to alternative roles within the company or a new structure.

The remainder have yet to decide whether they will stay within Aer Lingus itself, move to NorthgateArinso, or accept voluntary redundancy.

NorthgateArinso will officially take over the outsourced functions from January 1. Aer Lingus has previously outsourced some of its IT functions.

Irish Independent