3 Outsourcing Trends to Consider When Building Your Team
Note from the editor: This article is the second in a two-part series focused on assisting procurement professionals and IT leaders avoid the hidden costs often associated with outsourcing. Read Part 1 here.
According to independent sources such as Gartner and NASSCOM, since 2015 the growth of dedicated GIC or Global Insource Centers has outpaced service providers in India primarily due to the India engineers wanting to provide direct value to US organizations instead of billable hours or margin to their India service provider.
What does this mean? The talent wants to be measured and make an impact!
As remote and hybrid work environments are making it more difficult for employers to recruit and attain high-quality digital talent, we asked SVP of Global Services and Co-Founder of SMC Squared Steven Stephan to share his thoughts on how to rethink the approach to scaling global teams while minimizing additional hidden costs.
- Scale and optimize your talent ratios and retention. There’s a built-in employee maturity timeline in the India IT culture that leverages mentoring. Also, it’s important to understand the entry-level training and bonding which is much different than in the US. The highest level of attrition is at the 3-year mark when the bond expires. Unknown to most, this is why US companies that leverage traditional IT service providers see abnormally high attrition compared to what is quoted.
- Traditional India IT service providers rely heavily on < 3-year experienced resources. They have extensive college hiring and training programs, “freshers,” where they can bond for 3 years as they gain their first project experience and deeper technical training. Known to US companies as “shadow” resources, they are waiting for attrition to become billable.A common IT Services company ratio is 1:2:10 (leader:mentor:doer or architect:tech lead:developer). This puts a heavy burden on the leads and is optimized for margin, not results to the client.
- Foster Employee Development. SMC Squared and GICs (dedicated company resources) typically leverage a 1:4:8 ratio, where it inherently has a 1:2 mentor to doer ratio. These building blocks of 3 FTEs with the right architect as necessary make up the core resource mapping to scale and deliver optimal results. Retention is much better in this model as there’s significantly less dependency on the bonded, under 3-year resource (if any) and a more realistic mentor load on the leads. Plus it fosters internal employee development and career paths.
Build a team of fully engaged global employees who can more effectively tackle your business’ demands. To learn more about how we can help your company avoid hidden costs and accelerate digital capabilities click here.
Many Global Insourcing Center RFPs ask for hourly rates as a selection criterion to support cost control or optimization. Hourly rates themselves are easy to compare but do not accurately reflect the actual costs to deliver services or projects. Fixed bids make an attempt at solving this issue, but are often laced with caveats and take a significant effort to understand the scope.
Why are companies still sourcing talent from a bench? In the race for talent, there seems to be a huge frustration to find team members that even vaguely meet the requirements. That doesn’t even begin to consider company culture, soft skills, and retention.
Last month, Ecolab Digital Center and SMC Squared joined together to raise funds to support our community in India. On April 25, the country crossed the 350,000 mark of new single-day Covid-19 cases, the highest number of daily cases in the world since the beginning of the pandemic. As a result of the significant increase of daily cases, India is experiencing a shortage of equipment to help Covid-19 patients breathe.
We’re proud to announce the recipients of the inaugural Marcella A Connolly Scholarship Award or “MAC” Scholarship, for the 2020-2021 academic school year. Each year, the MAC Scholarship Award, established by SMC Squared and the Connolly family, will recognize remarkable young women who are working to achieve an education in a STEM-related program.
Scale Your Tech Output: Step 1
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