Removing Key Vendor Personnel in Outsourcing Relationships

Dealing with under-performing or culturally incompatible vendor personnel is one of the most delicate matters facing vendor managers.  Certain vendor personnel are critical to operational success.  When they don’t deliver, performance deteriorates.  When friction or distrust develops, relationships go sour and communication doesn’t freely flow.  Frankly, it’s an awkward situation.

The problem is that you’ve outsourced your operation and, while you’re still responsible for ensuring the vendor delivers, you did abdicate certain recruiting and hiring choices.

With that said, if you negotiated your contract thoughtfully, you have retained the right to remove certain vendor personnel from your account.  And isn’t that great…you can simply send a letter and the person of your ire will disappear forever.  In fact, it’s easier than terminating your own employee.  It’s also far more devastating.

Keep in mind that you should never have arrived at this point.  Here’s an ounce of prevention:

• Interview Key Resources – No matter how wonderful your vendor claims certain people are, you must interview these resources before accepting their appointment to key positions.  These interviews must occur face-to-face, even if the resource resides in another country.  Telephone interviews are insufficient.  Furthermore, depending on the role, more than one interviewer should speak with candidates.
• Use the RFP/Vendor Selection Process – Effective RFP processes require actual key personnel to present key topics and respond to questions.  These are opportunities to evaluate the potential key resources.
• Require a “Succession Plan” – Every key role should have a solid succession plan and developmental goals that must be achieved each year.  The reason is simple: after a couple of years, most account teams experience turnover or promotions to greater opportunities.  Vendors need a plan to ensure key roles are never vacated for long periods of time.
• Provide Regular Feedback – Your job isn’t to develop vendor employees or submit feedback on performance.  After all, the vendor’s performance should be directly correlated to SLA and milestone performance.  However, every key vendor resource should be required to participate in 360 degree performance feedback, including feedback from clients, at least semi-annually.

Despite preventative actions, sometimes things don’t work out.  However, clients should be careful about the use of formal removal procedures, except in clearly dire situations triggered by ethical issues or significant performance problems.  Rather, vendor managers should informally communicate concerns to senior vendor leaders and give these leaders opportunities to resolve issues behind the scenes.  Often times, problematic situations can be resolved through a vendor reorganization that shift roles or moves certain people onto other accounts.  In addition, it gives the vendor time to find qualified replacements.

When the time does to give formal notice, after multiple warnings have not been heeded, vendor managers should be firm and expect immediate removal.  The communication should be done discreetly to key senior resources in order to avoid impacts on vendor morale and performance.  The vendor may ask for more time and the client should listen to this feedback carefully.  Also, timing should be considered – do not remove certain resources at critical junctures, as the impacts could be devastating.  However, the client has every right allowable within the contract, and there are times when formal action needs to be taken.

Finally, the removal needs to be done tactfully.  No matter the situation, the client is impacting a person and his or her team members…and empathy is important.  How you handle the situation reflects on you and your company.  If your goal is to become a strategic client with your vendor, managing this situation carefully is an important step toward remaining in good favor with vendor agents and leaders.

Here’s another article on the same topic was written by Carter Santos

Have you removed key vendor resources?  How have you prevented this from occurring?  When the time came, how was the situation handled?  Share your stories with the ever growing readership here at 360 Degree Vendor Management.

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3. Onsite Vendor Management in a Global Outsourcing Environment
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5. Managing an Outsourcing Vendor’s Financial Instability