Outsourcing Revisited – What I’ve Learned Since 2010

* caveat – this post is from the perspective of a small business owner who does not have full time managers and human resource specialists. Someone who doesn’t have systems and processes in place to manage large collaborative teams on long term projects. This is for someone managing a small team with limited resources and need work done in the most efficient and effective manner possible.

 

A while back a wrote a post called 4 Tips to Not Get Screwed on Elance which has gained some controversy and even some backlash from the Elance community, mostly from freelancers who wrote me up as some type of slave driver.

Well, since that post more than 2 years ago, I have clocked up A LOT more experience with Elance, oDesk and a bunch of other outsourcing sites. I have had many full time, part-time and freelancer staff and have learned a bunch more since I wrote that post.

First things first.

I completely stand by everything I wrote in the first post, and think it is excellent advice to cover your own ass. I understand this might irritate some people, but the fact of the matter is those people probably haven’t put up their own hard earned money onto a site only to had it flushed down the drain buy someone in another continent.

Of course, I would prefer to be able to put up a nice fluffy ad, sign little hearts above my i’s and frolic around a paddock while my work gets done, my business grows and my cash flow is controlled. Unfortunately I don’t live in a fairy tale and shit happens.

Even after I wrote that post, I have still had many disturbing experiences with outsourcing sites. Mostly from NOT following my own advice. I’ve had many delayed, disregarded, over priced and under delivered projects, again and again.

In fact, I have come to the basic rule that 50% of all outsourcing hires are going to fail within the first week. Please read that stat again, because it’s RIDICULOUS compared to a normal business.

Even guys I know who are based in the Philippines and have staff in house in their own office, think that a 66% stick rate after 1 week is doing well.

With these kinds of figures as an employer, it only makes sense that you need to be much tighter in not only your hiring process, but you project schedules, time tracking and more.

I am not running a start up in SF. I cant hire a few college grads, give them Mac Books and iPhones and expect them to sleep under their desk every night. Its hard enough getting virtual staff to show up everyday.

After my additional experience with virtual staff, there are a number of things I have learned. I will go into screening these concepts in later posts, but here are my 2 biggest takeaways:

1. Communication skills, Communication skills, Communication skills, Communication skills repeat etc...

Communication skills are EVERYTHING when dealing with virtual staff. Since you have no way of directly managing them, if they are a poor communicator, chances are your project is going to fall through before it even starts.

This should be your key screening metric during interviews, technical skills, processes and tasks can all be learned. But someone that doesn’t know how to do something, and never tells you that don’t know how to do it, is where everything falls down.

I will do a whole post if not multiple posts on screening communication skills.

2. Work Ethic / Current Situation / Motivation

Whatever you want to call it. We used to just call it “current situation” basically what it means is WHY does this person want this job? Do they NEED it? Are they EXCITED by the project? Will this be their primary focus? Do they already have multiple other clients and projects that are of higher commitment than your project? How much do those projects pay? What proximity and level of commitment will the worker commit to your project?

These are all questions that need to be asked when making the hire.

I have studied human resources and organisational structure and I completely understand this is not modern, traditional or textbook way  of approaching, hiring or managing staff in a traditional business.

But outsourced work is not traditional business. Ideally you want to create a collaborative culture or a fun working environment, but a REQUIREMENT is to get the job done in the most cost effective manner and thus the process becomes much more transactional.

With all the above being said, that doesn’t mean once you hire someone who you work well with you can’t empower them. On the contrary you should, but just make sure you screen thoroughly before relaxing on management techniques.