Is scaling down more painless when you hire Virtual Employees?

In part 3 of this three- part series of looking at some of the cognitive advantages of outsourcing, I’m taking a look at how the emotional pain involved in firing staff is avoided when you outsource.

In 2015, I met Malcolm Paice the COO of Keystone Employment Group to film a case study (How Outsourcing to India Helped UK Company Overcome Software Talent Crunch). And when discussing the benefits of working with Virtual Employee, he made a very interesting point about scaling down.

““After having developers, three developers full-time for quite a long time it got to the stage where we scaled that down to 2 and then scaled it back down to 1. And that process was again a lot more friction less by doing it through Virtual Employee rather than the processes that we would have gone through if we were doing it locally. It was very, very painless with Virtual Employee. We were able to take a very objective decision about when we moved from 3 developers eventually down to 1.”

To him outsourcing was not just advantageous because you have greater contractual flexibility to scale down faster; it is also advantageous because the process is also less emotionally painful.

“It is just about human relationships. As I said, we have a core team of about 15 full-time members. If you bring three people into that team, we all like to get on as a business and friendships form and relationships form. Again, when it comes to having to scale a project down, none of us like to be too mercenary about it – that’s it. We have to sort of break the team up. But I think it’s a lot harder to remain objective when you brought those people in and you’re engaging with them in ways other than just the project at hand. That weaning off of resource is always a difficult thing to do. You know, we are all compassionate human beings, but doing that when the employees are kind of at arm’s length just makes the whole process just much more straightforward.””

When we sit with a colleague every day and then go out for a few beers with them after work, is it emotionally more painful for a senior decision-maker to let that person go than if they had worked remotely with that individual? I think this is certainly the case, and these sentiments were also echoed by another client of ours, Ray Peck, the CEO of VXP Pharma, USA, when I met him in 2013 to film a case study (Here’s Why An American CEO Resorted To Data Entry Outsourcing Half Way Around The World).

““The nice thing was, these people that we hired in the United States, we were worried that once the project got finished, you have all the…I don’t want to say idiosyncrasies, but the idiosyncrasies of …well…firing someone. And this was not the case (with Virtual Employee); this was just like cancelling a service. And again, it was just more putting it on hold than anything else. Because we will eventually need your services again.”

I certainty think there is a lot of merit to what Malcolm and Ray are saying. We are all human at the end of the day and when you build strong personal relationships with your colleagues, it’s only natural to not want to let them go. Certainly, this can start to influence our decision-making, but as we said in the last two posts, all humans make emotional decisions but use logic to justify them. Having a strong personal relationship with a colleague is certainly going to pull at our emotions. So, perhaps our subconscious does kick into overdrive searching for logical reasons to justify staff retention and “project ad ons” even when the project is really complete.

But when you hire virtual employees, although you get to work with dedicated staff, you are, in actual fact, taking a service. You have more peace of mind because the outsourcing service provider will continue to offer employment to your virtual employees despite your scaling down. A good example of this is Ray, who after working with Niladri in 2013, came back 2 years later to work with him again via our company!

Most companies outsource because they are motivated by the thought of cost saving and quick access to talent. But, hopefully, this three-part series has given more insights into some of the more lesser-acknowledged and subtle advantages you also gain when you outsource, namely, more cognitive objectivity. The pain of not having to put someone out of a job, and thus cloud your judgement about project capacity planning, may not be your primary reason for outsourcing. However, it is still worth keeping in mind that such subtle advantages will make your life that little bit easier when you do outsource.

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