5 Proven Strategies to Reduce Churn in the Staff Augmentation Industry
Companies that opt to work with staff augmentation services to reduce their permanent IT budget and launch key software development projects benefit from having a team of experienced software developers that bring their idea into reality.
Executives at these firms also appreciate the ability to utilize top-tier talent for their engineering needs without the additional expenses involved in technical recruiting–and without the wide array of benefits that full-time engineers expect.
One of the ways that executives can improve their odds of success and the performance of their augmented teams is by building collaborative, hand-selected teams of engineers.
By carefully selecting candidates based on culture fit and technical skills, decision-makers also reduce staff churn in this mission-critical team. Reductions in turnover improve performance and save large sums of money on recruitment and training costs. This provides our clients with a tremendous advantage over the competition given the high levels of staff turnover that many companies face in this industry.
This type of churn is not only found in the IT industry. Research shows that 33% of surveyed employees quit a new job within the first 90 days of employment–with the national average turnover rating reaching an astonishing 57% in 2020.
Nearsure recognized the detrimental effects of staff augmentation industry churn long ago–and has spent the past several years implementing proven and time-tested strategies to reduce turnover among our development teams–resulting in greater stability for our clients and improved results across the board.
Let’s investigate some of these strategies in detail.
Proven Strategies to Reduce Churn in the Staff Augmentation Industry
Nearsure is widely regarded as one of the industry’s top staff augmentation companies because we focus on creating technically capable, communicative, and reliable engineering teams. Our company accomplishes this by utilizing our data-driven hiring and retention strategies.
These strategies allow us to reduce churn in our software engineering teams and provide better staff augmentation services to our clients. As a result of Nearsure’s efforts to improve our hiring and retention process, our company has seen our developer churn drop from 88% in September 2021 to 44% in September 2022–an amazing 50% reduction in just one year.
In this section, we’ll investigate the following strategies for reducing staff augmentation industry churn in detail:
- Thoroughly research clients for culture and personality fits
- Focus on continuous improvements and regular touchpoints with team members
- Make account managers accountable for their team’s performance
- Regularly analyze key performance indicators to measure success
- Conduct pre-screening background & reference checks
Thoroughly Research Staff Augmentation Clients
Nearsure’s data analysis team has found that one of the best ways to reduce churn in the staff augmentation industry is by thoroughly researching clients to understand both their culture and technical needs.
In the early years of nearshore staff augmentation, companies conducted very little research on their clients–mistakenly believing that culture didn’t matter with augmented staff members and that technical skills apply across the board.
This led to frustration with the offshoring process–and was often viewed as proof that developers from other countries couldn’t compete with their onshore peers.
However, Nearsure soon recognized that this rudimentary hiring strategy could be improved through technical and soft skills testing–ultimately making our clients happier and improving our KPIs across the board. We looked closely at our internal hiring practices and transitioned to a data-driven and skills-based approach to technical recruiting with impressive results.
This new approach to recruiting enabled our firm to become a strategic hiring partner who makes hiring decisions based on an in-depth knowledge of our client’s development needs and overall company culture.
Nearshore development services can exceed the capabilities of their onshore counterparts with careful hiring processes and a strategic account manager who gets to know their clients on a deeper level.
Hold Account Managers Accountable
Another policy that differentiates Nearsure from the competition is the involvement of Account Managers.
At Nearsure, we believe that each Account Manager is responsible for ensuring that their clients are ultra-satisfied with the quality of service provided by their staff augmentation company and team.
That’s why our Account Managers conduct monthly follow-ups with each client. These follow-ups include detailed questions about the communication style, culture fit, skills demonstrated, and progress made by each member of the outsourced team. We encourage our clients to communicate any and all concerns as soon as they appear.
Focus on Continuous Improvements
One of the most challenging aspects of staff augmentation churn is the lack of notice that an employee is unsatisfied or failing to perform, since 60-70% of staff turnover is caused by employees voluntarily leaving their current company.
That’s why Nearsure has implemented our “People Care” approach to personnel management.
Our managerial team has found that increased communication and regular touch points with our development staff is the most effective way to reduce churn in the staff augmentation industry and to identify early on when employees are unhappy. This allows for early interventions, increased support, or a crucial staff change before voluntary separation takes place.
By utilizing this People Care approach when managing our augmented software development teams, our project managers can remedy skill and knowledge deficiencies, provide continuing education opportunities, solve personality conflicts, and ensure that all of our staff augmentation teams operate effectively and deliver outstanding results.
The best staff augmentation services measure success by more than client feedback. The best software development companies regularly analyze key performance indicators (KPIs) to assess the quality of their team’s work–and to assess the monetary success of the project.
That’s why Nearsure looks at an array of critical KPIs to assess the effectiveness of our software engineering teams and recruiting process. These KPIs include:
- Coverage Rate
- Ratio of Proactive Contacts
- Contact Coverage per Client
- Categorization of Incidents
- Contact Effectiveness
- Time to Solve
While these may seem like complicated concepts, they are quite straightforward in practice–and offer a huge range of benefits in terms of augmented performance, reduced turnover, and increased client satisfaction.
The “coverage rate” refers to the number of augmented staff members on a particular project that was contacted and assessed by the people care team.
The second term, “ratio of proactive contacts,” is closely related. It compares the number of contacts that involved the people care team proactively reaching out to engineers with the number of contacts that involved augmented staff members reaching out to Nearsure with complaints or concerns (reactive).
The best staff augmentation companies will focus on increasing the ratio of proactive contacts.
The contact coverage per client is another crucial KPI–and it calculates the distribution of reactive contact attempts per client. This helps the people care team identify struggling projects early on. Similarly, the type of incident refers to whether the state problem is related to salary, personnel, technical skill set, etc., and is very valuable in creating strong-performing teams.
Finally, the last two KPIs help Nearsure people care team assess the quality of their staff interventions and proactive contacts. We look closely at these two numbers to assess the effectiveness of our team coaching strategies and to see how we can more quickly react to crises in the future.
By looking at each of the above KPIs, Nearsure’s data analysis team can evaluate the success of each member of the staff augmentation team, as well as their overall production, efficiency, percentage of errors and rewritten code, and the security of the software post-deployment.
Conduct Background & Reference Checks
One of the best ways to reduce churn in your staff augmentation team is by ensuring that your staffing partner is thoroughly vetting candidates before extending a job offer. This is especially important for highly technical roles and mission-critical positions that can make or break a development project, such as experienced software engineers.
At Nearsure, we help our clients avoid these unpredictable consequences by conducting thorough background and reference checks during the hiring process. Our analytics team has found that these intensive background investigations improve the quality of our hires and reduce the rate of churn in our staff augmentation teams.
Independent research reinforces this lesson. An Aptitude Research study found that 93% of top-performing companies are utilizing background screening–with those same companies being twice as likely to have superior levels of employee engagement compared to their peers.
In addition to background verifications, reference checks are just as crucial to Nearsure’s hiring success. Our recruiting team conducts employment, educational, and criminal background checks. We also perform reference checks with candidates’ former supervisors and peers before extending an offer.
By contacting former employers for a one-on-one conversation, employers can learn more about a candidate’s accomplishments, professional strengths, and even areas of concern. They are also excellent tools for assessing how a candidate will fit into the company culture and whether they are fit for a collaborative environment.
In Summary: Reducing Staff Augmentation Industry Churn
One of the most intractable problems plaguing the outsourcing, and larger software development, industry is the increasingly high turnover plaguing the IT field.
Many nearshore outsourcing firms struggle to evaluate candidates during the hiring process and provide poor continuing development mentorship to their current employees. As a result, the staff augmentation industry has one of the highest annual turnover rates in the world.
Nearsure recognized this problem early on and has been committed to reducing turnover in our engineering teams ever since.
Our company accomplishes this huge task by conducting thorough research and reference checks on potential employees, working closely with our clients to understand the company culture and technical needs, and conducting regular touchpoints with our software developers to identify complications before they cause problems.
Finally, we also place responsibility for the success of development initiatives in the hands of our Account Managers and regularly assess the progress of our projects using the same KPIs adopted by our peers in the Tier 1 tech world.