Outsourcing: Interview with Harley Lippman, CEO of Genesis10 (Part 7)

Sramana Mitra: I find that attrition is one of the biggest problems in the industry because any learning or domain expertise that you develop in the person walks out the door once that person walks out the door.

Harley Lippman: When that happens, there are unintended consequences. Someone leaves, for example. Now you have to have a meeting on the side if you are going to replace that person. Just having that meeting costs time and money. Let’s assume you are going to replace that person, which is typically the situation, you now hire another person. That person may not work out. So, it compounds the impact on the project because now you set back even further. Let’s be optimistic and say the person does work out. But, as you say, the learning curve might make that person take six months to become productive.

SM: What is the attrition rate in Kansas City, for example?

HL: Ours is very low. It is in the single digits.

SM: I think especially in the Midwest people don’t tend to quit jobs all the time.

HL: I think that is a big reason. If you treat them well and give them a stake in the future, you also have a better chance of keeping them. Again, it is not a commodity. You have to think that you are dealing with people. How you treat people, and what you give people also has a meaningful impact on turnover.

SM: I think the Indian industry right now, especially the large outsourcing companies, are factories. They are not exactly dealing with people anymore.

HL: If it gets really big in the U.S. it will have that problem, too.

SM: That is exactly right. You can do that when it is small, but when it gets to very large numbers it gets harder to maintain that same level or personalization.

HL: I am sure it was like that. A lot of companies were small and then they got bigger and it changed. Then you have time zone issues. If you think about India, you only have a window early in the morning or late in the evening.

SM: Or somebody is staying up and working late on one side of the globe.

HL: But Americans have that benefit over doing this overseas in India. But for a lot of people who interface with India, it is stressful. The hours are not convenient.

SM: The call center industry has imploded for exactly that reason. Human beings are not programmed to stay up all night and sleep all day.

HL: I agree with you, and that is a great point.

SM: Thank you very much, Harley. Goodbye.

HL: Thank you. Goodbye.

This segment is part 7 in the series : Outsourcing: Interview with Harley Lippman, CEO of Genesis10
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