Working with an outsourced team is already tricky, but it’s definitely a different challenge measuring how they’re faring. Aside from the fact that you can’t monitor the employees 24/7, measuring their performance requires you to consider several approaches and angles.
The Importance of Performance Evaluation When You Have an Outsourced Team
Evaluating the performance of your outsourced team allows you to track their progress and check if their processes align with the project goals. It enables you to address loopholes and resolve them as they happen. Ultimately, it helps drive home the importance of performing well and sends the message of meeting or even exceeding expectations.
This article will provide a comprehensive guide on how to evaluate the performance of your outsourced team effectively.
KPI and Metrics to Measure Performance
- Customer Service Levels
This key performance indicator (KPI) measures your outsourced team’s ability to deliver the standard service to your customers. It particularly gauges the time between the client calls in and when an agent responds to it. Average response time, resolution rate, and abandonment rate are the common criteria under this metric.
Backlog refers to unfinished tasks or customer orders that have been received but are either incomplete or in the process of completion. Tickets go unresolved for numerous reasons—it can be attributed to the agents’ slow performance or that there has been an unexpected peak. With a backlog metric, you can calculate potential revenue by plotting all work that has been accepted but not yet fulfilled.
You can measure backlogs in hours and then convert them into weeks. A healthy total backlog is four to six weeks for daily and weekly work. If the backlog is six weeks and no additional work orders are added, it will take six weeks for the crew to finish all job orders during regular work hours.
- Schedule compliance
Also called adherence to schedule, this maintenance KPI calculates how much of the work scheduled for a certain period is completed on time. In essence, it measures your outsourced team’s ability to deliver results as promised.
This metric is calculated in percentage and derived by dividing the actual hours spent on the task by the total planned work hours. For example, if the week starts on Monday, the compliance factor should reflect the work scheduled for that week as of Monday morning.
Quality is “the standard of something as measured against other things of a similar kind.” The Net Promoter Score is a widely known metric for the quality of a product or service. It usually takes the form of a single survey question asking respondents to rate the likelihood that they would recommend it to others.
You can use other KPIs to measure your outsourced team’s performance in terms of quality, such as complexity metrics and the number of complaints per period. These are mainly used when what is to be measured is not numerical.
Quantity KPIs are used for projects that take the form of numbers and ratios. Counting is by far the easiest way to quantify something you’re observing, such as the number of satisfied customers and total sales. Percentages are an ideal option when you’re interested in how many of your target population matches your performance result.
Meanwhile, ratios are a great way to measure productivity—for example, total sales revenue divided by the total hours spent on sales calls or total sales revenue received divided by the total sales revenue invoiced.
Process metrics focus on efficiency, assessing how tasks were performed by measuring the systems and procedures against the goals. A commonly used tool is the balanced scorecard, which aims to align the workers’ performance with the project objectives.
High-level KPIs gauge the business’ overall progress, while low-level KPIs evaluate the processes in departments such as sales, marketing, human resources, and technical support, among others.
6 Strategies to Evaluate the Performance of an Outsourced Team
1. Assess your professional relationship
A good professional relationship hinges on setting your expectations of what success looks like clearly. There should be a point of contact on your side who frequently communicates with your outsourced team and who sees to it that tasks are progressing—for instance, through a project management system. This way, you can deliver output to your clients on time and within the budget and work specifications.
Studies have always underscored the importance of making your expectations known and clear when collaborating with other business organizations. One survey notes that firms that exhibit open communication tend to be more productive. You can leverage the power of clarity by outlining your objectives and conveying them to your outsourcing partner, making sure you are both on the same page.
2. Look at how they do system maintenance and management
Your outsourced team should be able to support your company’s needs and demands fully. Their IT infrastructure should include the latest technology and a reliable network of phone and internet lines. They should also be available through email, phone, or other messaging platforms at designated times.
If you’re operating in different time zones, your provider must make sure you regularly communicate to minimize communication gaps. You also need to agree on the point of contact for concerns and queries for a smooth exchange of information.
3. Notice how they communicate
Is your outsourced team capable of effectively communicating their concerns? Do they keep you informed of the issues with the system? It’s crucial that they keep you in the loop by giving regular updates so that you can monitor things and concerns can be promptly resolved.
According to a survey, 86% of corporate executives, educators, and employees cite ineffective communication and poor collaboration as reasons for failures in the workplace. With this in mind, ensure that matters don’t get out of hand by designating a point of contact. This way, you can ensure smoother operations.
4. Aim for transparency
Does your outsourced team make documentation and records available to you? Is there a client portal where you can access tickets and view system status? Do they openly share problems and issues they’re experiencing and how they plan to resolve them?
These are some important questions to ask when assessing your provider’s performance. A good outsourced team should act as a partner—they should be as open as possible and not make you feel like there’s a barrier between you. They should be honest enough to share information with you, even those that are not necessarily positive.
Another essential thing to note is that miscommunication can cost companies an average of $420,000 per year. Given this statistic, it’s always helpful to aim for transparency when working with an outsourced team to help ensure efficiency and productivity.
5. Establish the habit of follow-up and follow-through
One issue when working with an outsourced team is the lack of a follow-up mechanism. A survey revealed that 28% of employees consider poor communication as the reason for not delivering results on time. Given this possible consequence, thoughtfully following through helps bridge the gap and keep things smoothly going.
A regular follow-up ensures that your team is working towards the target results outlined in your contract, regardless of whether they’re in-house or outsourced. It will remind them to prioritize tasks, prompting them to align their processes with the project goals. With this tracking approach, work is adjusted according to client feedback, guaranteeing optimized results.
6. Make them accountable for promised output and results
In an outsourcing partnership, your provider has generally set the expectations by way of their proposal. Whatever bar they have set is what you need to measure them against. Whether or not they’re balancing multiple clients, you need to receive the support and services you signed up for.
A great tool teams can use to track their performance is the OKR or objectives and key results. It’s a management framework used by companies to implement and execute their goals. This should be a part of your outsourced provider’s evaluation strategy, as it is useful in determining whether or not they’re delivering what they say they will.
Evaluating Your Outsourced Team Impacts Your Project’s Success
Assessing your outsourced team’s performance enables you to identify areas that can be improved, which, in turn, can positively contribute to your project’s success. There are several metrics and strategies you can use to evaluate how your provider is faring. These indicators and methods provide you with a glimpse of how things are moving along, helping you manage your operations better and more effectively.