As we look at the subject of “personnel development” in outsourcing – we first have to attack a basic question:

What is the value of personnel development in technical companies?

Afterall, if we’re not on board with the idea in the first place – why do we care what our outsourcing partners do internally?

employee involvement -Personnel Development

How important is employee retention over the long run?

Let’s be clear: The big idea behind personnel development initiatives in business is personnel retention. Finding top talent in any field takes effort, but in technology, finding stable, driven engineers who are at the top of their field is a constant battle. If you find them, the acquisition costs can be daunting. Once you have them, it can take four to six months for them to integrate into your team and to contribute fully and productively. And, since you know they left their previous position in search of something – retaining them over the long run and gaining a solid return on your talent investment is already somewhat risky.

So, with that in mind, it should be easy to see the value of retaining and developing the team members you have. You know their strengths and weaknesses, where they perform and languish. You know how they fit in your team and their in-house experience in technology. You can assess where they stand in their soft skills. They may not have every attribute you would like and they may not be where they should be in some technical areas – but they are known quantities. If you can motivate them to fill in the gaps in their skills inventory, their value will only increase to your organization.

But of course, personnel development is a many-edged sword.  If you don’t have a personnel development program, or your team is not motivated (even incentivized) to participate, your team members may become complacent and bored – and retention can suffer as people look for more challenging opportunities elsewhere. This is especially true of people with a drive to participate in technology. For people in fields like software development, reaching out to try new things is part of both career advancement and personal passions. Having the time to spend learning new things, advancing skills and feeling the glow of new accomplishments in new areas is very personally rewarding.

If you have a strong, HR-led personnel development program that is structured and biased toward skills and technologies you want to grow within the organization, you may find yourself promoting development in areas no one really wants to pursue. If they are not committed to advancing in the areas your organization supports, they may go through the motions but never really absorb new skills or display new knowledge within their team. Again, if your team is not fully onboard with your initiative, it won’t have a measurable impact on retention and if the pressure to participate is high, it may actually be a net contributor to lost talent.

success get - Personnel DevelopmentA strong, self-motivated program for personnel development 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 skills needed within the organization. However, if it provides a higher sense of investment and involvement in individual growth and career satisfaction to team members, that may be enough in itself to provide a real payback to the organization. Individuals who feel the organization cares about their personal growth and give them opportunities for advancement tend to want to remain with the team over a longer period.

Ok – let’s say we buy the argument that personnel development is a critical part of the battle to retain talent in technical teams and that it can provide a return-on-investment that is worth the effort. Why would it follow that we should be looking at the personnel development practices of our outsourcing partners? What do their internal personnel practices have to do with the quality of services they offer?

So let’s look at two questions:

  • What is the value of personnel development within outsourced software development vendors – to their customers?
  • What points you should look for in personnel development programs within your outsourced software development teams?

The Value of Personnel Development for Customers

dollar-signs -Personnel DevelopmentSince companies that provide outsourced services for software development compete for talent just like everyone else, it should be apparent that talent retention is as much or more of an issue for them as it is across the tech industry. However, that doesn’t mean they are in a position to take advantage of personnel development initiatives in a solid way. Many are in environments so competitive that their margins and talent availability are under constant attack. In these cases, only their most senior team members may be able to participate in personnel development programs with the theory that retaining them is of the highest priority and they may be able to help less-senior members with a kind of “trickle-down” knowledge management. Predictably, this has much less effect than direct participation by all team members, but if the intention is followed up with direct action (instead of just good intentions) it can be helpful to a degree.

So, if your vendor has a personnel development program and their team is fully motivated and involved – what can you look for in value on your side of the equation?

  • Lower turnover, higher productivity across the project lifecycle – When staff retention is higher on your outsourced team, turnover (loss and replacement of staff) will be lower and productivity will be higher and more consistent. This means that you are less likely to experience project delays because of loss or absence of team members and less likely to experience productivity drops due to team dynamics during the change of members and “reforming” while new members are integrated into the team. This is a serious issue because in the end it will cost you both money and elapsed time if your outsourced team cannot quickly recover from fluctuations in its membership. As you can imagine, this issue isn’t limited to the loss of team members. Teams with higher levels of member satisfaction and motivation are less likely to have problems with short-term absences too. If team members are having to frequently reprioritize tasks and work additional hours to meet project deadlines, it will eventually hit productivity – no matter how committed the rest of the team may be.
  • Higher involvement and knowledge transfer –  Team with members who have a broader knowledge base and a higher level of personal satisfaction in their career are more likely to be forward in their contributions to team collaboration and knowledge transfer. They are also more likely to take on work that requires a level of research and evaluation of alternatives, because they are comfortable with their ability to learn and apply new concepts. Personnel development programs are only part of an improved attitude towards self-learning and advancement of course, but if they are part of a positive, self-motivated culture of improvement within their organization, they can provide great value to teams. Instead of waiting to contribute ideas or needing to be asked, they tend to be more involved and positive in their contributions. This is a key behavior in successful implementations of agile and even more important in DevOps because, in both cases, there is is a high reliance on individual responsibility and engagement.
  • knowledge - Personnel DevelopmentCross-domain knowledge – Strong professional development programs include opportunities for widening member knowledge in areas outside their usual focus. If your vendor team participates in this kind of program, whether they do it directly and formally, or more informally by giving staff members the opportunity to participate in a variety of projects across different technical and business verticals, they will bring to the table a wider range of experience and more ways to apply their insight into solutions. This is particularly important in product development situations, but the practice provides value in any project where agile and scrum methodologies are fully applied and team member responsibility is highly valued. As a client, you are paying for team expertise as well as an amount of completed work.
  • Soft skill impact – The term soft skill covers a range of attributes but at a high level includes communication, negotiation, problem solving (creativity), and strategic thinking. Not all personnel development programs will include a soft skill focus, but when they do they can greatly improve the working environment and satisfaction in working with your outsourced team. Communication, especially in situations where team member’s native language is not English, can be improved a great deal by the investment in language and inter-personal communications by your vendor. If your team members are not confident in their ability to communicate with the members of client teams – they won’t and the loss of collaboration and information fidelity will suffer. Soft skill training requires a level of strategic thinking on the part of the vendor organization because it is “outside the box” of strict technical focus, but it can improve career satisfaction for team members and their involvement in your project to a great extent.

Of course, programs like these aren’t inexpensive for a vendor to implement and maintain. They require a long-term investment in both the programs themselves and the cultural dimensions that drive staff participation. They require a serious commitment by senior staff members and management to both run the programs and “participate-by-example” and model the program themselves. You won’t get the advantages of a properly-run program when you focus on price as the most important factor in vendor selection. But in that case, you will suffer in other ways too, so it may be hard to differentiate.

So, do you see the value? If you do and you want a vendor with successful programs that will make a difference – what should you look for?

Points to Look For

Personnel DevelopmentBefore we list some points to ask about, let’s clear up one misconception that may come up – some vendors may say (directly or indirectly), “It is none of your business.” when you ask about their personnel development programs. After all, they are in the service business, how their manage their employee costs is part of their business model. But, that said, they are in the service business and customer experience is (or should be) part of their value-added to you. If it is not, you might as well just go out and bring in some casual contractors yourself. Again, you won’t find fully-implemented programs in situations where the lowest price is always the winning factor. But, in those cases, hopefully, you are only looking for short-term, quick-fix solutions to low-risk projects where you can’t bargain on the basis of higher skills, longer engagements or dedicated teams.

So, when you are more focused on quality and success than cost, what points should you look for in strong personnel development programs within your vendor’s organization?

  • Broad, self-directed and motivated programs – Enforced programs, focused on a narrow range of technologies may be necessary when a team needs to ramp up to meet a specific challenge quickly, but if they are the rule, they will quickly become a negative experience and lower team morale. The same can be said of situations where a lot of focus is put on testing and measuring changes in performance. The more “overhead” a program requires, the more “hoops” it requires participants to jump through, the less attractive it will become. It is a difficult balance because every organization wants proof its initiatives have value, but too strong a focus on measurement forgets one of the basic goals of this type of program – to improve talent retention. It is important to evaluate organizational strengths and incent strategic skills properly, but if it doesn’t build a culture of self-directed involvement and motivation for personal improvement – it is a required education program – a different animal, requiring a different structure and management.
  • An equal commitment to technical and soft skills – In any consulting organization, technical skills are important – whether they are specifically technical in nature or operational (scrum is an example of an operational skill that most developers learn early in their professional development) – but soft skills impact how effective the team and its team members are in their work. Without a focus on improvement in both areas for all team members, general improvement will be hard to chart. Are they not learning their technical skills or are they unable to communicate what they have learned in the context of a working team?
  • Wow -Personnel DevelopmentBroad experience as a training ground – Cultures that enforce narrow roles and disciplines may improve the ability of some individuals to provide expertise in specific situations but they lower the ability of teams to respond to a range of problems with creative solutions. Modern software development teams, using agile principles, stress cross-functionality, personal involvement and a broad view of project goals. Team members on outsourced teams should generally have experience in a wider range of business verticals and technical environments than your in-house team because that should be part of the value they can bring to the table and contribute to the project. They should be able to build on the contributions of your subject matter experts without talking down to them or feeling they don’t have a role as a collaborator.
  • Time commitment – If a program is balanced and fair it should reward successful participation with both an allowance of paid time and rewards for the successful devotion of personal time to goals. Again, if the program is properly self-directed and motivated, it has to walk a fine line if it is going to reward devotion and accomplishment but it is part of developing a program that is fully embedded in organizational culture. Rewards don’t have to be a direct monetary reward – they can be tuition for successfully completed education programs, movie tickets, books, certifications, and any number of other ideas that provide recognition of achievements. The point is for the organization to show it values its team member’s involvement in the program and the achievement of individual goals.

No, these points do not include a list of subjects, programs or organizational structures you might ask about. Those are all individual details of implementations that don’t really matter if they meet the basic tenets of a good program.

Bottom line – Will you profit from working with a vendor who has invested in a good program of personnel development? You may not be able to measure it as pure profit or loss, but you will gain from a more engaged and collaborative team and you will lower your risk that a project will go off the rails with unexpected losses and complications.

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 an outsourced team you would like to work with, contact us. We would be glad to discuss your project and how we can help.