A typical customer-provider relationship is never an easy one. Both parties seek to extract the maximum for themselves in an ostensibly win-win situation. Months of negotiations usually end up in a customer selecting a provider who meets most of its requirements, and then ties up the provider to documents that list out a number of do's and don'ts and a set of expectations unexcitingly called Service Level Agreements (SLAs). Both parties part at this note, with the customer going home feeling that his headaches are now someone else's, and the provider figuring out how to extract most of the business with the hope of scaling it up for future gains.

Thankfully, real life successful sourcing arrangements are not as cut and dried. They are not devoid of a heart and a soul. The customer could be sitting 10,000 miles away from the provider, but in many cases there is actually lot of hand holding, particularly as regards human resources — the people at the provider's end who work towards the customer's engagement.

In many outsourcing and offshoring relationships, customers and providers work shoulder-to-shoulder to ensure that there are no hiccups, at least at the beginning of the process. Customers involve themselves in a range of activities that span recruitment, training, migrating processes and, at times, even appraisals of the staff that are working with third-party providers.

The downside of this could well be lot of interference from the client, but often it actually helps get things going between the client and the vendor.

HR Partners
To begin with such bonhomie is pretty much informal and hence somewhat easy to achieve. After months of brainstorming and evaluation, a customer selects a provider and then tries to help him sort out the HR part. Usually the kind of involvement depends on the customer.

“There is no hard and fast rule on how things proceed. Customers do not want to take on HR responsibilities, but a provider for them is a ‘virtual captive' where client processes are executed,” says Ashish Gupta, Country Head and COO, Evalueserve, an India-based knowledge process outsourcing provider with about 1,500 people.

Such partnership is more evident in cases where the customer has outsourced a significant chunk of its tasks that involves hiring 50 or more people at the third-party provider's end. For instance, for a bank based in the U.S. or Europe that outsources credit-card related tasks to a provider in India or the Philippines it is important to know the people who will be handling the work and not just the company that will do the task. “It is sort of a double check as well,” says Gupta.

The need for specific skill sets may also prompt the client to see the people who will be executing the processes. “In the case of a build-operate-transfer [BOT] kind of model, the [customer's] involvement is greater as he tries to ensure that there is uniformity and respect for client values and culture,” says V. Bharathwaj, VP, Global Marketing, 24x7 Customer. “It all depends on the customer. Some customers do take lot of interest as the work today is dispersed to various geographies.”

If the business is a BOT model, the customer is naturally more involved as it will handle the business at some stage. The customer could spell out the full-scale expectations and ensure that the employees that the provider is hiring are in sync with the value proposition and culture of the customer. This has been the case with insurance group Aviva that had a BOT model with a provider in India .

In many cases customers may not have a deep involvement. “The client does not get involved in drafting HR policies of the vendor. But he could do background checks as part of security,” says Pramod Kumar, Director, HR, Keane Global Systems. “When we hire we decide the training needs, while customer requirement is our commitment.”

When to Hold Hands
Perhaps that's one reason why many contracts do not actually spell out what kind of HR relationship the customer and provider will have. Typically the extent of involvement depends on the depth of the relationship and the time that the two parties have worked together. In the case of a new provider, the customer may want to be engaged with the provider at the HR level. Also, when the customer scales up processes or the provider hires several people (a few hundreds) to service that customer, then the customer should get to know the people who will do the processes. “When the process is new, encouraging an HR partnership could be mutually beneficial,” says Ashu Calapa, Head, HR, FirstSource, an India-based BPO.

That makes eminent sense. For instance for an insurance company that outsources claims-management related tasks, training employees directly at the provider's site is helpful as the customer will be able to explain his domain and processes the best. The extent of involvement could be to cover areas like how to migrate the process, what people to recruit, training content and trainers' training.

Also, since often as the customer is in a different geography and the provider is recruiting people to execute processes in a very different business and cultural environment, a direct client involvement can help clear things faster.

For instance, a U.K.-based travel company with operations across Europe that outsources work to a provider in New Delhi (the capital region of India), has not only people from its own office coming down to train staff at the provider's location, but it also occasionally recruits European staff for the India operations. “Sending down people from Europe to work in our backend in India is expensive but payoffs are good. They are now able to train the Indian staff to the nuances of the European travel market,” says a senior executive at the travel company. Such cases are not uncommon.

Dealing with Niche Processes
In fact where the process is very new or niche, relevant skills many not be that easily available in the provider location like the Philippines , Mexico or India . For instance, legal process outsourcing is increasing in India . Often getting trained manpower that understands the subtle differences in the legal processes in Europe or the U.S. may not be easy, and here the customer can help. “The client is involved in the type of people we recruit, developing the training program and recruitment process,” says a co-founder and CEO of a legal process outsourcing provider in India .

In one case a Fortune 10 company sent three lawyers to the provider's office for one week. They did the full training program and short-listed 10 out of 20 candidates on the basis of legal expertise and communication skills. The work related to corporate contract drafting. The provider has 200 employees (lawyers and engineers), and expects to have 300 people on rolls by the end of this year. It works with 150 clients, 25 of which are Fortune 500 companies.

Seeking Customer Help
Often providers go out and seek customer help themselves. “We see necessity-based involvement rather than interference,” says Manuel D'souza, VP, HR, Intelenet Global Services. Customers could spell out what process is to be offshored, job description, skill sets and the competency of people to be hired. From the time a provider signs the letter of intent, it is in the interest of the provider to proactively seek customer involvement. This is done by offshore transition teams or project-management teams.

As the global sourcing industry scales up and customers offshore more complex tasks to providers around the world, there could be more associations on HR-related matters. Such partnerships are in the interest of both parties.

For the customer, it helps to enable a smooth transition of the process to its “virtual office” and ensures that its customers don't come back with complaints. For the service provider, such partnership could iron out start-up problems and help in scaling up the process and business faster.