Global Outsourcing

>> Managing Attrition in Outsourcing

The decision to outsource work to another geographic location is often predicated on the expectation of large potential cost savings and access to scalable talent pools.  Whilst both goals are achievable, they can be severely impacted on by high levels of attrition at the outsourced destination (and even at home.)  Without wanting to sound alarmist, your approach to managing attrition could make or break your plan in the medium to long-term.

All the evidence shows that rates of attrition are higher in the outsourcing world than in other areas of business and there are a number of factors which contribute to these disappointing statistics:

  • Competition for talent in the outsource market
  • Lack of promotional opportunities because of flat corporate structures
  • Wage inflation in-country and an unwillingness to keep pace with this
  • The nature of the work which is outsourced – which is often quite boring
  • Recruiting overly qualified staff for mundane tasks
  • Lack of a sense of inclusion within outsourced teams
  • Outsourced partners moving their own staff around as new clients are onboarded (you wanted their best people but so does everybody else)

Any outsourcing project needs to have the management of attrition at its core.  It might sound pessimistic to start the process by assuming that many of the people you recruit will leave but unfortunately experience proves that is exactly what happens.

Ask yourselves a series of basic questions:

  • What is the cost of attrition to my business and how might that offset any cost benefits you are expecting (include in this calculation recruitment, training, opportunity cost, impact on clients and the home teams etc.)
  • At what level of attrition do I lose any cost savings I am expecting from the transition process?
  • Why would people want to work for us?
  • Why would they want to stay long-term once they have joined?
  • What is the clear career path I can show new joiners?
  • What incentives can I offer to make retention more likely (things other than cash often go a long way)?
  • How will we manage at a distance and promote an atmosphere of inclusion?

Unfortunately, attrition is often treated as an HR issue and fingers are pointed if attrition rates are high.  The management of attrition is a whole organisation priority and senior leaders need a laser-like focus on this throughout the lifetime of the project.  If fingers are to be pointed over this issue then they should be firmly pointed at senior leaders.

We have many years’ experience of managing these issues and would love to work with you to develop processes to help you though this potentially challenging area.

Latest version updated 16th November 2017

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