Nearshore Americas

How I, the Client, Cut Attrition on My Outsourced Agile Team

Retaining good talent can be difficult when working with an outsourced team, as there are so many factors out of your control. The good news is that there is a lot that can be done to retain that talent, and the better news is that in doing so you indirectly increase the effectiveness of your team.

A good retention plan begins when finding an outsourcing team. Ask the vendor to provide information on retention rates over the past few years. If you check references (which you should), ask the reference about their experiences with retention with this vendor. When making the final decision, include this in the decision-making process. Turnover costs money and requires the time of not only the people who have to be brought up to speed, but also the training and overhead of bringing them up to speed.

Retention with outsourced teams follows the same path as retention with an in-house team: personal bonds to the organization, project and other teammates; recognition; an ability to advance; attentive management and a sense of accomplishment both individually and as a group.

Keeping smaller individual teams that are cross-populated with in-house and outsourced members is perhaps the single most important component of retaining quality individuals. The small team size allows the members to feel as if they have a voice – that they are not just one in a sea of people. The blended-location approach reduces the sense of hierarchy, putting members from both locations on an equal standing. It is most effective if the in-house team is not all the leadership and the off-site team are not all “grunts.” For instance, I currently have a team in which project-management is handled in-house, but the head of testing is outsourced.

The Communication Hierarchy

Communication is the key”… ah, what a managerial phrase. It is obvious, ubiquitous and has so many meanings that it is virtually meaningless. So, I will be specific. The conducting of team meetings and sub-team meetings should be frequent, involve video when they cannot be face-to-face and be encouraged to follow the following hierarchy:

• Face-to-face: multi-day planning, final negotiation, initial introduction, proximate conversation.

Video: Issue resolution, multi-point conversation, remote white-board conversation.

• Audio: Video-like conversation where video is either unavailable or inappropriate (driving a car, after-hours at home conversations), short discussions.

• Email: Non-time-sensitive threads; multi-point, different work-hour threads.

• Instant messaging: quick questions.

I impose this hierarchy on my teams even for interpersonal conversations not only to improve communication, but because the higher levels of communication foster familiarization, making the offsite team feel more integrated with the team. Left to themselves, my experience is that people in technology rely too much on lower forms of communication, often using instant messaging to communicate with a person five feet away. Be proactive on long distance work environments to encourage higher forms of communication.

Not feeling like a cog in a machine is also important to retention – it is a well-studied fact that the more significant a person feels their contribution is to a project/team, the better their productivity and retention. I use Agile development methodologies for many reasons, one of which is because it is more ambiguous with its user stories than strict, detailed requirements found in waterfall methodology. It takes programmers from being translators of detailed documents (churning requirements into code) and instead leaves ambiguity where they can contribute their own interpretations. I have noticed that by using Agile, even when using it locally, I get more feedback about the design and direction of the project – I get more “You know what I think would be a good feature…” Make the team members feel like their contribution extends into the realm of design or the process, and you have improved retention.

Problem Solving

One of the difficulties with contract teams is their reporting hierarchy. Even if they spend the entire day working with your company, their paycheck comes from another company; their HR department is with the contracting firm and they have managers at that firm. When there is conflict within the team, such as one person not pulling their weight, or problems with the IT manager, etc., they tend to resolve it within the organization. And that is fine, as long as the organization resolves it. But, sometimes the organization doesn’t and sometimes the team needs an advocate.

I have had to go to bat for my teams to remove people from the team, change managers, procure new hardware and even to allow them to work from home. In doing so, I might have angered a few people at the outsourced company, but when a team sees that level of commitment to them individually and as a team, their loyalty to your organization increases and, by extension, so does retention. So, go to bat for your team against your vendor if need be. The vendor will get over it when you pay your next invoice, and the team will remember it.

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You can’t count on the outsourcing company for retention. The daily interaction of your team is with –or should be – with you, and you need to create an atmosphere where the individual members understand their importance to team, the project and your organization. Manage them and advocate for them as you would your own employees. And let them guide the project, not just build it. The payoff is not only retention, but also greater velocity, higher quality and lower costs. Plus, it is fun.

Chris Snyder


  • Kudos on batting for your outsourced team! One of the main reasons why there is high attrition rates on the vendor side is because there is a disconnect or not enough integration between the offshore staff and the client. Offshore staff leasing can be purely transaction based, so the offshore employee can indeed feel like another cog in the machine. Typically HR departments stop paying attention when the employee starts on the job, so talent retention is also reduced on the vendor side.

  • Good points. One thing I have seen is the outsource firms hire young college hires (“freshers”) and place them on the engagements. As soon as that young person gets a little seasoning they bolt to another company offering more money. Not sure you can do a lot about that asking the vendor to match pay.

  • Great points, Chris. Retention is a critical element of your overall velocity. It can significantly influence whether or not you meet your project goals on time, within budget, and on target with quality.

    It’s an important metric when assessing a potential development partner. At Belatrix Software, we enjoy a very high retention level. It’s something we constantly invest in keeping high. It’s crucial to the success of our client’s businesses.

    We believe that organizational culture really is an important factor in contributing to retention. It’s pure psychology 101. At Belatrix, we have an “open” culture that encourages the free exchange of ideas. Our people have a voice, and we take that seriously. Exchanging ideas, is our business so it’s important that we recruit engineers who want to share their ideas. We also ensure that at every point our people feel that they are growing, not only by formal training, but informal opportunities to grow their skills. And we even offer workshops in creativity, so that is continuously infused within the organizational culture. All this is, of course, only part of the equation, but these are important components for achieving high retention levels.