The Importance of Personnel DevelopmentIn Outsourcing?

Successful Outsourcing

But First - A Basic Question…• What is the value of

personnel development in tech companies?• If we’re not onboard with

the idea in the first place – why do we care what our outsourcing partners do internally?

Let’s Be Clear• The Big Idea is personnel retention!• Finding top talent in any field takes time and effort• But in technology, finding stable, driven engineers who are

at the top of their field is a real battle• Costs can be high. • Once you have them, it can take four to six months to

integrate them into your team and get good productivity• And – since you know they left their previous position in

search of something – retaining them over the long run and gaining a solid return is somewhat risky…

Let’s Be Clear• Retention means you can grow and nurture the talent

you have• You know their strengths and weaknesses, where they excel

and languish• You know how they fit in your team and their experience

base• You can assess where they stand in their soft skills

• They may not have every attribute and skill you would like but• They are known quantities• If you can motivate them to fill the gaps in their skills

inventory, their value to the organization will only increase

But…• Personnel development is a

many-edged sword• If you don’t have a program, or

your team is not motivated and incentivized to participate, your team members may become complacent and bored. • They will look for more challenging

opportunities where they can be active in new technologies

• Software developers want to try new things for both career development & to satisfy personal passions

But…• If you have a strong HR-led program• Structured and biased toward skills and technologies you

want to develop in the organization – you may find yourself promoting development in areas no one wants to pursue• Your team may go through the motions, but not really

absorb new skills or bring value back to the team• If your team is not really onboard, it won’t have a

measurable impact on retention, may actually create negatives and a net loss.

But…• A strong, self-motivated program generally has higher

participation• If it is balanced with some allotted time and reward for skills

advancement• But it may not always contribute directly to needed skills in

the organization• If it provides a higher sense of investment &

involvement in individual growth and career satisfaction to team members that may be enough• Individuals who feel the organization cares about their

personal growth and gives them opportunities for advancement tend to want to remain with the team over a longer period

So, Let’s Say We Buy the Argument• Why would it follow that we should be concerned

about personnel development practices within our outsourcing partners? • What do their internal personnel practices have to do with

the quality of services they offer?• Two questions• What is the value of personnel development within

outsourced software development vendors – to their customers?• What points should you look for in personnel development

programs within your outsourced software development teams?

The Value for Customers• Service providers that provide outsourced software development

compete for talent in the market just like everyone else• Talent retention in the field is as much or more important as it is across

tech industries• However, not all service providers are in a position to take

advantage of programs internally• Many are in markets and environments where their margins are under

constant attack• Only senior staff members may be able to take advantage of programs

with the theory that retaining them is the highest priority and they might be able to help knowledge “trickle-down” to other team members• Predictably this has much less effect and requires direct action – which may not be

supported

What Can You Look For?• Your vendor says they have a

strong personnel development program. Their team is motivated and fully involved. Value to you?• Lower turnover, higher

productivity across the project lifecycle• When your vendor’s staff

retention is higher, staff turnover (loss & replacement) will be lower and productivity will be higher

What Can You Look For?• Lower turnover, higher productivity across the project

lifecycle• You will be less likely to experience project delays because

of the loss or absence of team members and less likely to have productivity drops due to problems with team dynamics• Fluctuations in team dynamics cost money and time

• Teams with higher levels of satisfaction & motivation are less likely to have short-term absences too• If teams are constantly having to re-prioritize tasks – it will hit the

project timeline

What Can You Look For?• Higher involvement and knowledge transfer• Team members with a broader knowledge base and higher

personal satisfaction in their career are more likely to be positive and forward in their contributions to team collaboration & knowledge transfer• They are more likely to take on work that requires research

and evaluation of alternatives• Team will have a bias to positive involvement, contribute

ideas without being asked• Key behavior in agile and DevOps implementations with a

high reliance on individual responsibility and engagement

What Can You Look For?• Cross-domain knowledge• Strong programs include

opportunities for members to widen their knowledge base outside their usual focus• Can be implemented

directly and/or indirectly• Informal programs insure

team members participate in a wide range of projects across technologies and business verticals

What Can You Look For?• Cross-domain knowledge• Team members will bring to

the table a wider range of experience and insight into alternative solutions• Particularly important in

product development• Provides value in any agile &

scrum-based project where collaboration and responsibility are key

• As a client, you are paying for an amount of completed work & experience

What Can You Look For?• Soft skill impact• Covers a range of attributes including communication,

negotiation, problem solving (creativity) and strategic thinking• Not all programs will include soft skills

• But when they do, they will improve the team working environment and satisfaction within your team in working together with the outsourced team

• Communication and inter-personal collaboration, especially when English is not the native tongue of the outsourced team, can be greatly improved by investment in the vendor organization• If your outsourced team is not confident in their soft skills

and abilities – collaboration and communication fidelity will suffer

But…• Personnel development programs aren’t inexpensive

for a vendor to implement and maintain• They require a long-term investment in the programs and

the culture of their organization• They require a serious commitment of senior staff members

to run the programs and “participate by example” – modeling the behavior directly

• You won’t get the advantages of a properly-run program when you focus on hourly cost as the most important factor in vendor selection• But in that case, your project will suffer in other ways too.

You Can Ask• Before you approach prospective vendors with

questions – realize:• Some vendors may say, “It’s none of your

business” (directly or indirectly)• Vendors are in the service business. How they

manage their employee costs is part of their business m0del.

You Can Ask• Before you approach prospective vendors with

questions – realize:• But – customer experience is (or should be) a big

part of the value they deliver• If it isn’t, perhaps you should just go out and find a bunch

of casual contractors yourself• (Again) You won’t find fully implemented programs

when you are shopping for the lowest price• But in those cases, you are probably only looking for

short-term, quick-fix solutions for low-risk projects where you can’t bargain on the basis of longer engagements, higher skills, or dedicated teams

Winning, Quality Points• Broad, self-directed &

motivated programs• Enforced programs with a

narrow range of technology goals may be necessary to help a team ramp-up quickly but if they are the rule, they can become negative and lower morale

So, when you are more focused on quality & success than cost, points to look for in strong personnel development programs in your vendor’s organization include:

Winning, Quality Points• Broad, self-directed & motivated

programs• If there is a high focus on testing &

measurement with high overhead and hoops for members to jump through – programs will be less attractive, participation lower.• Not an easy balance. Every

organization wants proof its initiatives provide value

• The basic goal is still talent retention• If the program doesn’t build a culture

of self-directed improvement and motivation it is a required education program – a different animal with different structure & goals

Winning, Quality Points• An equal commitment to

technical & soft skills• In any consulting organization

technical skills are important whether they are specifically technical or operational like scrum

• Soft skills impact team effectiveness

• Without a focus on both areas, actual value may not come back to the team – because they may not have confidence in their ability to communicate what they have learned

Winning, Quality Points• Broad experience as a training ground• Cultures that enforce narrow roles and disciplines may

improve individuals responses to specific situations but they lower the ability of a team to respond to a range of problems with creative solutions• Agile teams stress cross functionality, personal involvement

and responsibility• The best teams will have members with experience in a

wide range of business verticals and technical environments. They will augment the domain specific knowledge of your in-house team rather than supplant them.

Winning, Quality, Points• Time commitment• A balanced and fair program should reward successful

participation with both an allowance of paid time and rewards for the devotion of effort • Requires a balance between reward and being an

embedded, natural part of organizational culture• Rewards don’t have to be directly monetary

• Tuition repayment for successfully completed programs, movie tickets, books, certifications and any number of other ideas work

• The point is for the organization to show it values a team member’s participation and achievement

Bottom Line• These points do not include a recommended group of

subjects – that is for the organization to decide. • They are directional – the subjects don’t matter as much as

the way the program operates• Will you profit from working with a vendor who has

invested in a good program? • You may not be able to measure it in terms of profit or loss. • But you will gain a more engaged and collaborative team• You will lower your risk that the project will go off the rails

with unexpected complications

We’re Scio• Scio is a provider of

nearshore, outsourced software development services for our clients in North America• Our team members are part of

our personnel development programs and a culture of improvement that impacts our customer experience positively

• If that fits a model of a partner you would like to work with – Contact Us