Staff Turnover When Outsourcing....A Simple Method To Avoid It

One of the biggest battles any user of outsourcing services can attest to is attrition. There is nothing worse than having put resources (=money) into your hires and see them walk out of the door at a rapid clip. They have to be replaced and the new hires have to be retrained. It  takes time to bring the new hires up to speed...familiarize them with what is going on. The fact of the matter is that constant attrition is a drag on the quality of the work product.

 The problem of staff turnover is  true for virtually all BPO matter if the service offered is IT (Software), Call Center or Service based.

The problem though is not necessarily the same all over the world. Some BPO / Outsourcing providers  have fostered a culture and pay environment where the talent stays around. As such it makes sense to review the attrition rates your outsourcing provider has. If they assume a staff turnover rate of 50 % and more (which is not unusual) it does provide a provide a pretty good indication that the center you are dealing with is a "mill" or "body shop". The pay is most probably less than what the local competition offers and no positive culture is fostered.

Some welcome news on this front can be found in the article below. The attrition rates of the BPO industry in the Philippines has now fallen to 20 %. A rather astonishing number considering that the number was 33 % as late as 2011.

Philippines Outsourcing BPO Staff Turnover Rates Down To 20 %

Since the 20 % number represents a blend of the entire industry it signals that you can find outsourcing providers  which have reduced staff turnover to levels which are below or close to the turnover rates we are used to see in the US.  As a comparison...the table below shows staff turnover rates (voluntary and involuntary) for the US.

2014 Turnover Rates BPO Outsourcing Philippines
Source: CompData 2014 Survey

Consequently turnover and attrition might not be the problem it used to be, at least not when you pick the right outsourcing / BPO partner....and that is some really good news.

Agile Project Management...Is Your Software Outsourcer / BPO Firm Using It ?....

One problem I frequently run into when discussing project guidelines for outsourced software development  is that most of the clients  are well familiar with Gantt charts or Waterfall charts. As such they prefer to look at the project guidelines, timelines and milestones based upon those  charts.

Nothing wrong with that of course...but the software development world has moved on and at least the better companies are now mostly using an Agile Software Development set of principles. The concept of an Agile environment is that it is much more "free flowing" and not bound to the traditional milestones and tightly defined guidelines which are being used in a Non-Agile environment.

The challenge is how to provide the accountability to the client  (the ones who pay the bill) while harvesting the advantages the Agile environment can deliver.

The Agile Development environment is based upon the following 12 principles:

  1. Customer satisfaction by early and continuous delivery of valuable software
  2. Welcome changing requirements, even in late development
  3. Working software is delivered frequently (weeks rather than months)
  4. Close, daily cooperation between business people and developers
  5. Projects are built around motivated individuals, who should be trusted
  6. Face-to-face conversation is the best form of communication (co-location)
  7. Working software is the principal measure of progress
  8. Sustainable development, able to maintain a constant pace
  9. Continuous attention to technical excellence and good design
  10. Simplicity—the art of maximizing the amount of work not done—is essential
  11. Best architectures, requirements, and designs emerge from self-organizing teams
  12. Regularly, the team reflects on how to become more effective, and adjusts accordingly

A practical problem of an Agile development is that there are really no Milestones the teams are working towards. As such there is no firm date which can be given so that the customer can review a an interim work product (milestone).   

A practical solution to this dilemma (and one we use internally) is to still provide Gantt charts but use an  Agile environment in House.  The process has to be of course managed properly...but if done well it is entirely  possible to utilize an Agile environment while also providing the form and accountability the client is looking for.  

A great article which goes into details as to the way an Agile Development Environment works can be found below.

Cyber Security And Outsourcing....Does It Make Sense ?

Recent studies show that cyber security and its associated consequences are now a clear "C" level and board room responsibility.

The consequences of an attack gone well are often times to disruptive to not aggressively confront the problem preemptively. ( No one wants to be the next SONY) If there ever was  hesitation to confront the issue on the C Level ...this is clearly not he case anymore. No self respecting CEO or board wants to get caught in a cyber attack and not have had done their  homework. 

As always....anything IT related costs money. The problem with cyber security is that it requires a lot of work in the beginning..and less once appropriate changes to the procedures and network infrastructure have been made. Staffing for such a situation is always tricky. 

Corporations trying to address the issue by using existing staff often times find that this solution is only the second best one.  

The In House staff lacks the in depth knowledge required to truly audit the existing set up and infrastructure. There is also a lack of knowledge as to the latest technology used by the hackers. As such the issue of how to properly guard the network becomes rather complex. 

One good solution is to outsource the cyber audit. Hiring an expert team which can remotely probe the network using the latest hacking technologies (white hacker) might be a much better solution. If you find the right BPO company which has a strong cyber security team the results will be better than anything your internal team might come up with. Outsourcing cyber security will be much cheaper than hiring a top level Cyber Security Officer (or a whole team).  The costs are also limited in duration. 

Another big advantage is that  you can reengage the team as needed to ensure you are up to date with your defenses. Having a top notch outsourcing company  at your disposal to revisit the network every few months to make sure that it is up to date is the equivalent to purchasing  catastrophe insurance. 

You might never need it...but you are sure happy to have it once you do.

Colombia Might Be The Outsourcing Place To Be in South America For Call Center And IT Services ....

I am a big fan of Colombia when it comes to outsourcing. We have an office there and I can speak first hand as to the talent available. Compared to other traditional outsourcing countries the big advantage is that they are more or less in the same timezone as the US. Consequently mid day meetings and continuous interactions are easy. The culture gap is non existent, making daily cooperation no problem.

A recent report released by AT Kearney makes clear why Colombia is such a good place to do business. IT service sales now rank 3rd in the region after Brazil and Mexico. When it comes to Spanish language services (call center) it ranked second, just behind Mexico. The Institute for Management Development ranked Colombia's work force as the best trained in South America.

Columbia Is A Good Place To Get Your Outsourcing Business Done