11 Reasons Outsourcing Relationships Fail – Vendors Do Not Adequately Train Their Personnel

In the first article in this series, I outlined the 11 most common failure modes for IT outsourcing relationships.  These are summarized below for your reference:

• The vendor over-promises, and fails to deliver on their commitments
• The client fails to exercise proper governance over the vendor contract
• The vendor underprices the contract and fails to earn a profit
• The contract fails to align vendor with client goals and objectives
• Vendor reports contain raw data, but rarely include proper diagnosis
• The client does not understand the metrics included in vendor reports
• Both client and vendor view the contract as a zero-sum game
• Vendors spin data and reports to cast themselves in the most favorable light
• Continuous improvement is ill defined or not included in the contract
• Vendors experience extremely high turnover on a client project
• Vendors and/or the client do not adequately train personnel

In this twelfth and final installment of the series, I will address the fact that most vendors do a poor job of training their agents and technicians.

Poor Training

Would it surprise you to know that most enterprise support groups train their personnel far better than their managed service counterparts?  It’s true.  The average insourced service desk provides nearly 140 hours of training for new agents, while managed service providers who specialize in this industry provide less than 100 hours of initial training.  The implications of this can be quite detrimental to an outsourcer’s performance.

Why would a third-party service provider, an MSP, provide fewer hours of training than their own clients provide to their analysts and technicians?  It’s pure economics.  Every hour that an outsourced agent spends in training is an hour that they are not generating revenue for their employer.  Given the overcapacity in the industry, and the razor thin margins that accompany most managed service contracts, vendors are under enormous pressure to contain costs wherever possible.  One obvious way to do that is to minimize the training period for new agents.

Unfortunately, this cost reduction strategy has a negative impact on performance.  We can prove this by looking at benchmarking data, which clearly illustrates the effect that training hours have on two important quality metrics: customer satisfaction and first contact resolution rate.  As shown, both quality metrics are positively correlated with training hours.  As training hours increase, customer satisfaction and first contact resolution also increase.

The Antidote to Poor Training

When a vendor is consistently missing their KPI performance targets and service levels, insufficient or ineffective training is often the root cause.  Poor training can be rectified by requiring vendors to provide sufficient training to their analysts and technicians to achieve their contractual performance goals. However, rather than wait until performance is suffering to determine that a vendor is not adequately training their analysts and technicians, a best practice is to require vendors to report their training hours and demonstrate through exams and/or call, chat, and ticket monitoring that their analysts and technicians have the necessary skills to achieve their performance targets.

Two bellwether metrics in particular, customer satisfaction and first contact resolution rate, are highly correlated with training hours.  When analyst and technician training is insufficient, both metrics will suffer.  Moreover, training has the added benefit of improving agent job satisfaction and reducing agent turnover.  The more training hours a service provider delivers to its agents, the higher the job satisfaction and the lower the turnover will be.  Training represents a true win/win/win scenario for the vendor, their clients, and the agents!

Finally, your vendor contract should specify a minimum number of new agent training hours as well as annual training hours. The top quartile for new agent training would be approximately 148 hours per agent, while the top quartile for annual agent training would be about 30 hours per agent.

Here are some additional resources that may be helpful in your quest to ensure that your service provider is providing adequate training for their personnel:

• Agent Training Hours
• Training Hours Video