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When Deciding to Outsource, Consider the "Skill, Will" and "Hill" Factors. Workforce Performance is Critical Factor in Successful Outsourcing

As more companies turn to outsourcing as a strategy for lowered expenses and improved profit, they face significant challenges. Workforce performance is a critical success factor, and 70 percent of such initiatives fail to deliver the anticipated financial results due to workforce and service-related problems. The following release recommends actions executives can take to turn outsourcing into a financial gain, not an organizational drain.

April 29, 2004 - Atlanta, GA -- Much of the debate on outsourcing/offshoring of business processes focuses on the financial implications of the decision itself. However, once the decision is made, executives should turn their attention to two other equally important issues: first, what can the organization do to guarantee that contracted workers perform tasks at the same level as experienced employees? Second, has the organization considered the remaining employee population in terms of motivation and job satisfaction?

Executives who decide to outsource would be wise to weigh these two issues as the implementation process begins, says Dr. Seth Leibler, CEO of CEP (The Center for Effective Performance). As with other strategic initiatives like restructurings, mergers and acquisitions, globalization or downsizing, outsourcing success is heavily influenced by the performance of the workforce.

Research tells us that 70 percent of all these business initiatives fail to fully deliver the anticipated financial results, and the reason is workforce performance problems," notes Dr. Leibler. If organizations are able to identify these workforce performance issues, they are fixable, or in many cases, even preventable."

To reduce risk, Leibler suggests that executives make certain that the three factors required for performance are all addressed. We call these factors skill, will, and hill," explains Leibler. In other words, do performers have the skill required to perform job tasks at the level of performance management expects? Do the remaining employees embrace the decision, or is their own morale and job security threatened-thats the will. And finally, hill refers to the environment itself, does the workforce have the necessary information, systems, and tools to perform at the level management requires."

Organizations who want to increase the likelihood of making outsourcing a successful strategy should make use of state of the art tools and procedures that can be applied to guarantee skills, and to identify and find solutions to will and hill" obstacles.

Leibler recommends that executives ensure their organizations take the following best practice actions:

Identify skill requirements that will be addressed by training:
In most cases, the decision to outsource will necessitate new business processes. Certainly external resources will need to be fully prepared to implement these processes, but existing employees may also require new, more complex skills as they are called on to manage the outsourcing relationship.

Training developed to address any new skill requirements must:
- Be viewed as the right solution only when there is a documented lack of skill or knowledge
- Include specific performance (not just learning) objectives derived directly from job performance requirements
- Offer significant opportunities to practice all the critical situations workers will face on the job, with immediate feedback on performance
- Include skill checks (demonstration of performance) to ensure workers have mastered essential skills needed to perform to expectation following each unit of instruction
- Make use of user-friendly, easy to navigate job aids that are written from the performers point of view (not just technical documentation) that can be used in training and as performance supports

Identify and recommend fixes for will and hill" obstacles:
Even though skills and knowledge are extremely important, they alone are not enough to guarantee performance. In outsourcing, attention should be paid to both the contracted workers and the organizations own employees. Employees with personal job jitters may well have morale and job satisfaction issues that should not be ignored. This danger is echoed in recent research from the Society for Human Resources Management (SHRM) that notes that With job security such an important issue, the threat of offshoring is likely to have a bigger impact on employee satisfaction and performance than many employers may realize. This could have financial implications resulting from higher turnover rates and lower productivity levels...."

State of the art tools, such as Dr. Robert F. Magers performance analysis" can be applied to determine the causes and realistic solutions for these will and hill" obstacles. This is especially important because the high percentage of strategic initiatives like outsourcing that fail to fully deliver the anticipated financial results can almost always be traced back to the will and hill" obstacles that are often ignored or buried.

Outsourcing any business process carries with it risks and challenges. By following the actions recommended by Dr. Leibler, organizations can ensure outsourcing is a successful business strategy that increases profitability and shareholder value.

About CEP
The Center for Effective Performance (CEP) is the industry leader in helping organizations turn their workforce into a competitive advantage, especially in high risk situations such as outsourcing, mergers, acquisitions, restructurings, downsizing and large scale system implementations. For nearly two decades, CEP has helped companies solve performance problems, develop training guaranteed to work, implement best practices, and create performance improvement strategies that translate into improved financial results. As the world's leading practitioners of Dr. Robert Mager's research-based methodology, CEP delivers world-class, proven solutions that increase profitability and shareholder value.

For more information, go to www.cepworkforceperformance.com.

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