During my work in the IT sector, I have talked with hundreds of CEOs, CTOs, and Engineering/Development Heads, etc, about their views, fears, and hopes for outsourcing. Their knowledge level and perception of outsourcing have greatly varied, depending on the size of the company they represent (we support both 30-people start-ups and corporations with 250,000 employees worldwide) and their general experience.
One of the most common fears (in terms of outsourcing) mentioned by the decision-makers is the ability to keep the knowledge within the organization and, associated with that, losing remote employees after they have invested a great amount of time and effort into them.
In other words, they are afraid of rotation.
Admittedly, this is a valid fear to have. After all, you do need to invest time and effort to bring an engineer up to speed before he reaches the desired performance (in reality it takes up to 2 months). What if he leaves just after that? And why is high rotation often associated with outsourcing?
From my experience, the average rotation among IT outsourcing companies can be as high as 30-35%. That means that each year 3-4 people out of 10 that work for you, will leave and will have to be replaced by others. The impact on the whole team can be great but will vary depending on the situation.
When a complete team of 5-6 engineers is supporting you, the change will be visible in the performance – so, in other words, there will be a clear cost for you, but the actual onboarding of the new employees will be done by existing teammates – so, the outsourcing supplier.
In case you are working in a mixed-team scenario (the team consists of your employees and those of your partner), you will also have to invest the time of your engineers to bring the newcomer onboard.
And yes, the knowledge transfer by the partner will take place, but it will never be perfect. So, the obvious idea is to avoid rotation in the first place. But how can you do this, and is everyone actually paying attention to this?
Actually, it is a quite common practice among providers to rotate employees between projects even by design. Sometimes, the best people are used as “openers” for new clients and are then moved to a new engagement after the initial phase of the project.
Sometimes such changes are described as: bringing “fresh blood”, a “new perspective”, causing “productive disruption”.
To me, they are all one big pile of rubbish!
After all, when working with an external partner, and investing time in new and talented people, wouldn’t you expect them to stay with you for the foreseeable future?
That’s how we perceive it at j-labs. We strive to select the engineers who will stay with the client even for years to come and will actually become your remote “employees”.
We have created an elaborate process to build long–lasting & stable cooperation:
1. Business Development Manager – the first person to contact you – will also be the same person who will oversee all business-related aspects for the whole cooperation (so NO handing over clients after closing them).
2. Delivery Manager – a crucial role as the Technical Manager:
- Discusses your expectations and needs before starting the cooperation (what your best practices are etc.).
- Discusses the kind of engineers you require both from a technical perspective, as well as the mindset aspect (leader/ forward thinker/ follower who is precise in carrying out the described tasks, etc.).
- Manages the team locally – serving as the technical support, and ensuring the team stays motivated and dedicated to the project.
- It is the same dedicated person during the whole engagement – from the initial technical call, throughout the whole cooperation.
3. Recruitment Expert.
4. Preparing for engineer selection:
- A team of Business Development Manager – Delivery Manager – Recruitment Expert is created.
- A description of the project is created so the potential engineers know all the ins and outs of their future project.
- A description of the perfect engineer is made to know exactly who to look for.
5. Selecting engineers – 3–stage verification process:
- HR interview to determine their character traits.
- Technical verification – performed by our trusted engineers.
- Delivery Manager interview – final decision if the engineer is the right fit for the project, and the project the right fit for the engineer.
- Only at that point will the candidate be sent to the client for consideration.
- An optional, but commonly used, an additional interview between the candidate and the client.
Having all of the above in mind, we make sure that the right people will be placed in the right place. This greatly influences their motivation, and engagement for the project and the client.
There are also other daily aspects of working at j-labs that translate into low rotation:
1. Company Security & Quality:
- j-labs is 100% privately owned by 2 owners (CEO & CTO), without any foreign investment or credit – which translates into great predictability on the ever-changing IT market.
- All engineers are our employees.
- Each engineer is solely dedicated to a single client.
- There is a clear career path.
- Work is carried out on brand–new Dell or Apple equipment (depending on the project needs, and the engineer’s preference).
- We have a stable network environment guaranteed by the Fortinet Security Fabric platform.
2. Company benefits:
- Dedicated training budget for each employee (there is no pre–approved set of courses).
- Sports & medical package.
- Access to 2 kinds of massages.
- Working in a brand–new class A office.
3. Other activities:
- Possibility to organize and lead Meetups in the office.
- Possibility to be a speaker at j-labs Academy (in cooperation with universities).
- Internal knowledge sharing activities (mini-academies).
- Sports (volleyball and football).
- Frequent after–work activities.
All of the above has a few main goals:
- ensuring that, by placing the right engineers in the right projects, they will deliver the quality and value expected,
- listening to the engineers to place them in projects in which they will be engaged and motivated,
- ensuring engineers have a clear career path, to allow them to grow together with the company,
- creating an open and friendly environment to ensure that j-labs is actually a really good place to be in.
Are there any cons of having such a complex selection process? Of course! Although the typical time to build a team for a new project is 6 weeks, there are times when the needs of the partner are more specific and we definitely need more time to look for the right engineers. That being said, we have situations when we have 3-4 potential candidates, but as they do not make a good fit, we do not recommend them. Yes, it is a different approach than the “I’ll give you 5 guys in 5 days” that many companies have. Yet after 10 years on the market, we know what kind of company we want to build. And we have committed to quality and predictability.
We have committed to the low rotation.
Author: Martin Konieczny, Business Development Manager @j-labs
If there are any other specific topics connected to outsourcing you are interested in, please contact me – firstname.lastname@example.org.