Thursday, February 28, 2008

The Challenge of Retaining Top Talent Abroad

Source :

Mehdi Hassan, blogging for South Asia Biz, recently highlighted a Forrester report on the growing dissatisfaction with IT outsourcing in India. As Hassan points out, firms are struggling with the falling dollar, unrealistic expectations, scalability, possible tax code changes and believe it or not, scarcity of top IT talent.

I couldn’t agree more with the assertion that the correct response to this situation is to reset internal expectations. I would also add that companies should take proactive measures on what they are able to affect. While companies are not able to control or change factors such as the falling dollar and rising costs in the target country, they can do quite a bit to attract and retain top talent - one of the biggest drivers of success in an offshore initiative.

It’s interesting how many organizations overlook the significant impact the human element has on their offshore operations. If we look specifically at the establishment of an International Purchasing Office (IPO), for example, we find that many companies invest their time and efforts into building out a vision, creating a budget, and locating office space. The assumption is that they can then hire experienced professionals and the low cost story proceeds happily forward to its fairy tale ending.

The reality is that there is a lot of competition for talent in not only India, but in all of the traditional low-cost countries of the world. Therefore it’s critical that organizations develop a comprehensive plan that incorporates:

1. A well thought out recruiting framework that includes a planning phase to assess such things as the current job market, acceptable salary levels and cultural nuances (performance bonuses, benefit packages, perception of titles, etc.).
2. A strong organizational design component that provides a clear growth path for individuals and has a well established governance model. This gives new employees a sense of belonging, purpose and pride. It should also clearly outline roles, responsibilities, performance expectations and metrics - and how it all ties back to the overall mission.
3. A thorough plan on how to build out capabilities - in other words, a solid ramp-up and training plan. Most new offshore offices are comprised of >80% new hires. Additionally, a strong training plan enables an organization to hire less experienced, but talented individuals - which is a degree of flexibility that is much needed in many of the tight job markets.
4. The right tools and support network.

The real key is to ensure that you are building out a complete organization, whether it is a call center, purchasing office or something else entirely. This is something organizations can control. At the end of the day, people are people all over the world. So if you build a great organization, you’ll be able to find and, more importantly, keep great talent.

Carol Pilarski is a Consulting Manager in Ariba’s Spend Management Services group. Her current focus is on supporting customers’ LCCS (Low Cost Country Sourcing) initiatives. Carol’s unique background includes eight years with Ariba, a period in Sony Electronics’ Rotational Program, the rank of Captain in the US Army and a degree from West Point.