Outsourcing Attrition: Should You Care?

Learn more about Velocity Partners offshore software development company



More than a few years ago I was operating as a QA manager with EMC. I had a fairly large team reporting to me; approximately 50 local testers and another 25 offshore. At the time, offshoring was a relatively new idea for EMC and we were “experimenting” with doing it within the QA team—not quite trusting to take our core software development offshore.

Also at the time, the QA team was experimenting with agile methods, Scrum to be specific, so we were an agile functional group within a largely waterfall company. To say the least, it was an exciting time and my cup ran over with lessons learned.

Some of the Key Lessons

There were really three things that stood out to me at the time. First, was engaging the offshore teams so that they “behaved” like local teams. Part of the challenge was cultural, part was the time-zone differences, but part was simply how long it took for them to gain trust.

Another revelation was how challenging investing in domain experience was. At EMC we built a variety of data storage devices and these were not trivial to use, understand, or to effectively test. Our users were largely system administrators, so a very technical group. It took us a fairly long time to train our offshore team members. Our typical thinking was that it took 9-12 months for a tester to reasonably understand our problem space.

And the final revelation was our attrition rates. When we engaged our vendor contractually, we thought that a defined bench with ongoing training and pairing behind the scenes would effectively mitigate any attrition risk. Well it turned out that our annual attrition rate was somewhere between 35-40%, which was driven mostly by competitive market forces. And note India’s rates are still at 20-25% levels, per . But we also found out the vendor would move team members around quite freely to other clients as well. In some cases, we were training the testers to work for our competition, but that’s another story.

Can you imagine the churn these two factors created? 9-12 months to come fully up to speed and ~40% attrition. Yes, we had “bodies” to connect to our project plan capacity projections. But were they high performing? Clearly, no!

And we paid for this in constant fluctuation in our plans, inconsistent execution dynamics, and most importantly in the quality of our testing and products. The offshore teams never achieved sufficient stability to become a “partner” to our onshore testing teams. There was always a “them and us” mentality driven by culture, attitude, and skill. We also felt we had to “check” all of their work, so that slowed things down as well.

I guess the key point I learned with offshore teams, and it’s one I hold for onshore or permanent teams as well, is that:

  • Attrition rates;
  • Cross team cohesion & continuity;
  • And having time to establish domain skills…

All matter a great deal when you’re trying to compete on the global stage and deliver great product.

Attrition at Velocity Partners

But lets move on from my experience and contrast it against Velocity Partners attrition rates. Since we started our nearshore operations in South America in 2007, Velocity Partners has consistently hovered around 4-5% attrition. In the first few years it was even less, around 2%. But as we’ve grown and as the local market for great agilists and engineers has heated up, the rate has slightly increased.

We currently have approximately 400 team members engaged in teams working hard for our clients. That sort of stability allows our clients to invest in longer-term relationships with their nearshore teams and reap the benefit as their domain experience increases without fear of attrition.

The attrition is so relatively low and the team cohesion, pairing and collaboration so high, that we rarely consider attrition risk in our contracts or project plans. Point is—we don’t react to it as an ongoing risk, but instead we focus our attention on creating an environment where our people want to stay.

Are those low attrition rates free?

Of course not!

In fact, it takes quite a bit of hard work on our part and that of our clients to create the environment where teams happily grow and build products. On our part, it starts with recruiting your team. We have a reputation as an incredibly attractive place to work and we leverage this to hire the best. We know others say this, but we actually deliver on it.

Compensation & Benefits

You don’t get the best people by nickel-and-diming them. Sure, technology and environment matter, but so does compensation. We pride ourselves on being extremely competitive in regional salaries, while also having benefits packages that are second to none.


We heavily invest in training for our teams. We have three incredibly experienced trainers, internal coaches, and university-level instructors on staff that help run classes and keep the skill levels sharp for our teams. Beyond that, the teams learn from each other by continuously pairing on work and being open to cross-technology and cross-functional collaboration.


One of the most important things to our engineers is the growth opportunity we provide. First, they get the chance to work in a fantastic real world agile environment. They get the chance to work with smart colleagues. They also get the opportunity to work with great clients on interesting projects.

Our teams aren’t really best suited for by-rote or maintenance work. Sure they can do some of that, but we really want them to be in the trenches with your own teams—making a difference to your bottom line and customer by delivering outstanding products.

Last time we checked, that’s the point of agility: high-performance teams delivering high value and high quality products. We achieve that on a daily basis here at Velocity Partners.

And finally, we give our agilists a chance to grow within their discipline and across disciplines. As I said, we want them with us (and you) for a while. To provide some proof of this, listen to our podcast conversation with Ivan Grimaldi. Ivan has been with his client teams since 2011. Imagine the consistency, dependability, and value that sort of stability brings to the table.

Can our clients do anything to help attrition?

Of course they (you) can.

While I was at iContact and engaging Velocity Partners teams, it was a consideration of mine that we needed to have a fair and level-set view to our nearshore teams. It was important to me as a leader to treat them as a true partner. I wanted them to be as excited about the work, the growth, the learning, and the opportunity as my own teams. Why?

Not because I’m a “softie”. No, I am truly focused on creating high-performing agile teams that are empowered and energized to do great work. But in order to do that, I needed to collaborate with Velocity Partners leadership in our plans and strategies and leverage their teams with challenging work that mattered.

And it’s not simply my opinion. Here’s another discussing the role that a client can play in cutting and controlling attrition within their outsourced teams. I highly recommend reading it for yet another, more independent perspective.

Wrapping Up

Many offshore or nearshore firms talk a good game about being agile, about having truly self-directed teams, and about delivering on the high-performance promises of “Agile Done Well”.

But when you look under the covers, you sort of get what you pay for. And in my offshore experience above, we certainly got what we paid for and paid for that decision dearly due to attrition turbulence.

In many ways, you want to “treat” your offshore teams as if they were your own. And you want a partner who values their knowledge workers and creates teams with a true agile mindset.

If you manage to achieve this balance, the results will be as they say—priceless.

Stay agile my friends,


Bob Galen

Bob Galen

Bob Galen is an Agile Methodologist, Practitioner & Coach based in Cary, NC. In this role he helps guide companies and teams in their pragmatic adoption and organizational shift towards Scrum and other agile methodologies and practices. Contact: bob@rgalen.com