Wednesday, June 20, 2012

Reduce your employee turnover rate by hiring fresh graduates

Reduce your employee turnover rate by hiring fresh graduates

by Bhavin Gandhi
In my last blog, I have discussed about how you can save some money and re-training costs by hiring a fresh graduate instead of an experienced professional. In this blog, I will provide you with few other reasons why you should prefer fresh graduates over an experienced person.
Flexibility: In my experience, I have found less experienced people more flexible as compared to very experienced professional. For example: I had this one intern, let’s call him Mr. X, who was very self-motivated to learn. Thus, Mr. X will come early every morning, and read all the required process documents and training documents before he started his work. He would still work his core hours with some of my other experienced team members, but he was always willing to put in some extra time to learn new things. His hunger for learning new things helped me a lot, as he would come on weekends sometime and finish some of the important tasks of my projects.
Happier workforce: I am not saying that fresh graduates are always happier at work. I am saying that……….. Since they don’t have any past experience to compare their existing job with, they wouldn’t complain as much as few experienced professionals would, who might have worked in different companies and have seen different company cultures and practices. For a fresh graduate, your culture and practices will become his primary bench mark, since he will grow with your company, and learn all the practices and procedures established by your company. Also, smaller incentives like free bagels, donuts or lunch will go a long way for him as compared to other people, who might have seen different (better) days.
More growth opportunities: Obviously, you can have various growth opportunities for your experienced professionals depending on your company’s policies. But trust me, you will have way more opportunities for your employee’s growth, if you hire a fresh graduate. For example: I work in a Software Industry. In my company, we have various job ranks for our engineers. Ranks go from 1 to 6 depending on their experience and capability. Let’s say, if I hire an experienced professional on “Engineer Level 5”. Unfortunately, after his promotion to the next level, “Engineer Level 6”, I might not have clear defined path for his growth. And that employee will feel stagnant in my company, and might try to leave for another job. Imagine, if I hire an “Engineer Level 1”, a fresh graduate, for the same position . I will have more opportunity to grow him within the company in a given hierarchical structure of the company. Thus, I would recommend you to hire a fresh graduate, if you already have few experienced people in your team to provide a direction.
I hope these tips will help understand the importance of hiring a fresh graduate in comparison of an experienced professional. Let me know, if you have any other reasons why you would prefer hiring a fresh graduate instead of an experienced professional. Please feel free to share your opinion here. Thanks. – Bhavin Gandhi

Monday, June 11, 2012

Few reasons why you should think twice before offshoring your operations?

Few reasons why you should think twice before offshoring your operations?

by Bhavin Gandhi

If you could hire 4-5 people in China for the same salary that you give to 1 employee in the US, why wouldn’t you offshore your work to China? Doesn’t it seem like a perfect plan to save some recurring operating costs? Trust me; it might not be as easy as you think. Apart from obvious major risks like language barriers, culture differences, and copyright infringement; there are various other risks that can make your offshore venture a failure. In this blog, I will put some light on some of those hidden issues.
Increase in travel expenses: Most of the armature businesses will measure the success of their offshore project through the reduction in their recurring operating costs in the US. Often that performance metrics doesn't take the overhead costs, such as traveling, in to the consideration. Successful outsourcing requires significant face time during the launch phase to establish the rules of engagement and regularly thereafter to maintain the relationship. And these costs greatly increase as both the client and the offshore supplier make lengthy and expensive trips.
High turnover: With more and more companies moving their workforce to India, China, and Brazil; the demand for offshore workers increases, so do their wages. Salaries in India, for example, are increasing by double digits almost every year. For some overseas locations in China, employee turnover is extremely high sometimes as much as 50%­ as employees are regularly recruited away from their current jobs. For a knowledge-based function such as software development, this high amount of turnover can be disastrous in the long run.
Negative ROI: On an average, it takes approximately 3-5 years before one can see the same amount of productivity from their offshore team. Research has shown that although the advertised savings for offshoring were around 60-80%, actual savings of 0-20% were common and in many cases it was negative. Most of the businesses fail to consider the additional costs that are required to increase their management and training efforts, so that they can have the same level of quality in their end product.
Of course, not everything is bad about offshoring. In my next blog post, I will discuss few ideas about……’why you should consider offshoring’. Until then, if you have any other ideas or comments about offshoring, then please feel free to share it here on my blog. Thanks – Bhavin Gandhi