How big are attrition rates in offshore or nearshore teams?Hoe is het personeelsverloop in offshore en nearshore teams?Hur stor är personalomsättningen i offshore- och nearshore-team?Wie hoch sind die Ausfallraten bei offshore oder nearshore Teams?

I frequently hear from people that an aspect which affects the effectiveness of their offshore team is high attrition. It is commonly understood that attrition rates in India are in the range of 20-40% per year which means that if you start building an offshore team, you’ll have a fresh team every 2-3 years. Not good news. But is this always true?

Ik hoor vaak van mensen dat hoog personeelsverloop een aspect is dat bepalend is voor de effectiviteit van  hun offshore team. Men denkt vaak dat het personeelsverloop in India tussen de 20-40%  per jaar ligt, wat betekent dat als u een nieuw offshore team samenstelt, u elke 2-3 jaar een nieuw team heeft. Dat is geen goed nieuws. Maar is het altijd waar?

Jag hör ofta från folk att en aspekt som påverkar effektiviteten hos deras offshoring-team är hög personalomsättning. Det är vidare känt att personalomsättningsgraden i Inden ligger mellan 20-40% per år vilket innebär att om du sätter ihop ett offshore-team så kommer du att ha ett helt ny uppsättning personal vartannat till var tredje år. Inga bra nyheter. Men är detta alltid fallet?

Ich höre regelmäßig von Leuten, dass der Ausfall von Teams ein Aspekt ist, der stark die Effektivität Ihrer offshore Teams beeinflusst.

Es wird allgemein angenommen, dass die Ausfallquote für Indien zwischen 20-40% pro Jahr liegt. Das bedeutet, wenn Sie ein Team aufbauen, müssen Sie alle zwei bis drei Jahre ein neues Team bilden. Das sind keine guten Nachrichten. Doch entspricht es immer der Wahrheit?

My experience is that there are some big influencers of attrition (this list is not exhaustive):

A. In which country do you build a team?

I have built teams in Ukraine, Moldova and India. If I look at the CV’s of programmers in India, it leads me to the conclusion that attrition rates there are bigger. 2-3 years is the average stay of a programmer in India. In Ukraine and Moldova CV’s look different, people tend to stay longer. But that’s the CV’s. Somehow people do stay longer.

B. In which town do you locate the team?

I have established my offices in the smaller cities. In India, I chose Cochin instead of one of the metropolis like Bangalore. In the big cities, there are opportunities for a better paid or more interesting job around every corner. HR people are hunting for talent all day long. In Ukraine I choose Odessa, and in Moldova Chisinau. In both cases, there is also less attrition because people have different reasons for working there. Usually it is their native place and their family is there, so they do not want to move to a big city just to get a better (paid) job.

C. How big is the company in which the team is working?

The bigger the company, the less bonding there will be between an employee and the company. This is obviously not always true, but often it is. Companies like TCS and Infosys with over 100.000 employees experience much more difficulties keeping people long term as each is one small element of the big picture. Smaller companies give more of a ‘family’ feeling where people fight to fulfill the company’s mission and goals.

D. What kind of people do you take on board?

I often ask ‘how long do you plan to stay with our company’ when I do interviews in India. And surprisingly enough, there are people who reply ‘well, maximum two years’! That makes the choice easy. Another indicator of high attrition chances are people who move from city to city. That probably means they look for a high paid job continuously until they get a better offer. I always prefer people who are looking for an interesting job that gives more rewards than only money and have at least the intention to stay on board.

E. How well do you take care of personal development of the team members?

Especially in a global team, this is crucial. People work from a different location for people that they don’t meet every day that they don’t know deeply. This means, that extra effort has to be invested into bonding and into understanding the future growth expectations of your people. If they can grow with you, the projects they work on are interesting and you are nice to them, they will stay longer.

F. How much team building do you do?

An offshore or nearshore team often works in isolation: they work on your project among other people working for other projects in different countries. The company they are employed with offshore obviously has a role in building the team spirit. But on top of that, the offshore team should feel ‘one’ with the onshore team. They should be working towards the same mission, they should get important projects and should be friends with the people onshore. If you miss this, the engagement of the offshore team with your purpose will be low and people will stay shorter.

The most contradictory term that I find in our industry today is ‘virtual teams’. To me ‘virtual’ means ‘it is not real’. A team consists of real people, doing real work, having rational thoughts and emotions lead their behavior. All of the aspects above indicate to me that we need to think through many aspects before choosing a location, choosing a team and choosing team members. There is nothing virtual about building global teams. If you treat them as a real team and real people, you build commitment and people will work in your team long term.

If you are interested to learn more about global IT staffing, I recommend you to visit www.bridge-global.com