Outsourcing And Offshoring: The Pros And Cons Of This Staffing Strategy

By Rick McFarland, CEO, Voice4Net

Rick McFarland has been the CEO of telecom software application provider Voice4Net for more than 21 years. Keeping a relatively small but agile development team requires thinking outside the box and relying on third-party partners for help. McFarland tells ISVinsights.com readers how he keeps his developer team happy in order to ensure his company’s technology is up to date.  He explains his thoughts on outsourcing, efficiency, and benefit packages for software developers.

Lower cost is one of the largest benefits of outsourcing, but companies have to be judicious in how they go about the process. Independent contractor sites exist such as Elance (now Upwork), which is somewhat like a “Match.com” for contractors, where you can see the candidates’ histories and ratings and match their skillsets to your needs. But it’s difficult to find or keep quality talent that way.

We’ve found much greater success with larger outsourcing firms, such as Datavail and Galaxy Group, which are larger companies with an entrenched reputation in the marketplace. Like working with any vendor, though, finding a reputable offshore project management company that’s a good fit requires time and investigation.

Our first few attempts with smaller offshoring firms were disappointing—they assigned the wrong resources, didn’t deliver the results promised, and were poorly organized. However, Datavail and Galaxy offered incentives such as money back guarantees and did considerable planning with us before going forward. We were better able to collaborate on identifying the right developers for our project. In fact, we essentially created a team of highly skilled developers for half the price of adding a single engineer on a full-time basis. Through this type of arrangement, we have been able to complete our projects three to four times faster.

Interview Tactics, Hiring Best Practices:

What processes should you put in place to ensure your development team operates efficiently when your company grows?

When we bring in an individual, it’s because we have a specific need, such as HTML programming or database expertise. We train that employee to fill a specific role, yet since we’re a small company, we may need that individual to work across several disciplines. An employee who masters skills in a core area will still be involved in a number of different projects, and has the opportunity to truly expand their skill set. We’ve found that many employees appreciate the opportunity to discover new talents, and the avenues to apply them. They become more satisfied and versatile employees.

This approach has been consistently beneficial for the employee—and our company. I’d advocate it for large organizations as well. Immerse your developers in cross-training. Expose them to disciplines and skillsets for which they weren’t originally recruited. Not only does it help develop that individual’s career path, it introduces fresh ideas to the rest of the development team, fosters creativity, and increases job satisfaction. 

Benefits and Perks:

What’s the biggest human resources perk for employees? What’s the greatest necessity to retain staff members?

Healthcare is everything in today’s world. Developers have families, mortgages, and bills. They’re not 19-year-olds running around a campus—and those are not the type of team members we’re looking for. The benefit of providing a strong healthcare plan extends far beyond the simple finances of the proposition. The bureaucracy and complexity of the healthcare marketplace is so daunting and ugly for most people, that the very act of an employer providing that benefit is a greatly appreciated.

In addition to healthcare, employees put a priority on retirement funding, as in 401Ks. And younger workers frequently look for flex time. We contract with a human resources solutions company called Insperity, which allows us to offer a full benefits package despite having a limited size staff. This allows me to attract talent on the same level as a much larger competitor.

We also try to maintain a certain window of when our staff needs to be on the clock. However, as long as people are productive and fulfilling their projects, we be can be somewhat supportive of them taking time to do other things, which most often means accommodating family needs. 

Another objective is to maintain an atmosphere of creativity for developers. No one wants to be bored. Developers in particular, if they’re talented, tend to be creative human beings. They want to feel like they’re making an impact and taking an active part in innovation as opposed to being restricted to mundane jobs. We make an effort to stay on the cutting edge of technology, so people are always forging forward with something new—new to our business customers, and sometimes to the industry itself. Our success in delivering nascent technologies is not just a way to satisfy the end-user, although that’s a huge motivator. It can also be a tool to maintain talent. If you can’t feed your developers’ creativity on a regular basis, the good ones leave. The less talented ones will stay—and won’t justify your investment in them.

In short, when managing the entire HR process, our advice is simple: Don’t do it alone. Hire a reputable company to do it for you, unless you have the resources to devote an entire department to it. This is a key factor for a growing company that wants to compete for talent with top-tier players. It will provide much more flexibility in attracting highly skilled people. These are the people who will evolve into your most valued, long-term employees.

Rick McFarland is president and chief executive officer of Dallas-based Voice4Net.