How to Build Skill Development Into Your Outsourcing Contracts and Why It Matters

Outsourcing can reduce costs, increase efficiency, and allow businesses to focus on core operations. Beyond operational benefits, including skill growth in your agreements can lead to long-term strategic advantages.

Setting clear upskilling goals in outsourcing contracts ensures your team can evolve alongside industry changes, equipping them with the expertise to drive innovation, stay productive, and become more competitive.

Here’s how to make skill development a cornerstone of your business process outsourcing (BPO) strategy and why it’s becoming essential for long-term success.

Why skill growth is a must-have in modern BPO agreements

A Grand View Research report forecasts that the global BPO market could reach $525.23 billion by 2030 and achieve a compound annual growth rate (CAGR) of 9.8%. As the industry expands, upskilling becomes critical to help remain agile and adapt to emerging technologies and evolving business needs.

To understand this point better, let’s define what BPO is. Business process outsourcing involves handing off functions, such as customer service, information technology (IT), and human resources (HR), to external specialists to streamline operations, scale efficiently, and lower operating costs.

Integrating upskilling into your agreements can elevate the capabilities of BPO teams, boost service quality, and strengthen the partnership’s long-term value. The question is, how do you incorporate upskilling into your contracts? The following section provides the answer.

9 proven strategies to build skill development into your contracts

Outsourcing can build smarter, more capable teams by integrating upskilling goals into your contracts. Here are practical tips to make skill development a core part of your BPO strategy.

1. Make skill growth a shared objective

Including upskilling goals in outsourcing contracts promotes mutual success, but only when aligned. You can make shared objectives with these ideas:

• Define clear upskilling targets. Outline specific skills or certifications you want to develop within the team and link them to performance metrics.
• Incorporate training milestones. Set agreed-upon benchmarks and timelines for skill advancement to track progress.
• Include ongoing learning commitments. Include contract provisions for regular training and updates to keep skills relevant.
• Collaborate on development plans. Work with your outsourcing partner to create personalized learning paths for each team member, addressing current and future needs.
• Measure success together. Regularly assess how upskilling initiatives affect performance and adjust strategies for continuous improvement.

 Aligning upskilling goals encourages both parties to invest in continuous professional development while fostering stronger, more productive relationships.

2. Add clear training and knowledge transfer clauses

Training and knowledge transfer clauses in your outsourcing agreements help set expectations, guarantee quality, and promote continuity even as teams, tools, or project scopes change. Consider including the following in your strategic outsourcing agreements:

• Training and development requirements. Outline the specific training programs, certifications, and timelines required for your BPO team.
• Knowledge transfer process. Define how the internal team and the outsourcing partner can pass on knowledge, including documentation, workshops, and shadowing opportunities.
• Onboarding and ongoing support. Establish the required onboarding procedures and provisions for continuous support and refreshers to keep skills current.
• Performance metrics for training success. Set clear key performance indicators (KPIs) to track the effectiveness of training and knowledge transfer.
• Exit strategy for knowledge retention. Detail the procedures to secure knowledge retention if the outsourcing relationship ends, including access to training materials and other necessary handover processes.

Defining training and knowledge transfer in your outsourcing contracts creates a foundation for long-term success. These clauses ensure your teams remain skilled, supported, and ready to adapt.

3. Set clear, measurable upskilling goals

Including upskilling goals in outsourcing contracts maximizes the impact of training. However, business leaders must establish measurable goals to track progress and outcomes accurately. Here are examples of quantifiable skill growth objectives:

• Achieve specific certifications. Set targets for employees to complete industry-recognized certifications (e.g., AWS Certified Solutions Architect) within a set timeframe.
• Improve proficiency in key tools. Enhance their proficiency in digital tools, such as mastering advanced Excel functions or learning a new programming language.
• Increase productivity metrics. Track improvements in task efficiency or the reduction of error rates after completing training modules.
• Enhance customer satisfaction scores. Set goals for BPO teams to improve customer feedback ratings after training on customer service procedures.
• Develop leadership capabilities. Target developing leadership skills by examining their effectiveness in managing teams or leading projects after specific training programs.

Clear, measurable upskilling goals turn training from a checkbox activity into a strategic performance driver. Defining specific outcomes increases accountability, tracks progress, and aligns skill development with business value.

4. Incentivize vendors that prioritize staff development

Encouraging vendors to prioritize staff development can lead to high-level outcomes and stronger partnerships. The following are ways to reward BPO partners focusing on staff development:

• Link performance bonuses to skill advancement. Offer financial rewards based on measurable upskilling achievements, such as certification completions or improved efficiency.
• Establish clear expectations for continuous learning. Include ongoing education in your contract, with penalties for failure to meet training milestones.
• Set long-term partnership goals. Create incentives for vendors who demonstrate continuous improvement and consistent upskilling of employees throughout the partnership.
• Recognize and celebrate achievements. Acknowledge and publicly reward external teams for meeting or exceeding training goals to foster a culture of growth.

BPO providers are more likely to invest in skill growth for their teams when they know such a program is tied to performance incentives.

5. Align training requirements with project scope

An industry study revealed that 35% of HR managers find it difficult to obtain training content tailored to their organization’s needs. To create more focused, compelling custom learning experiences, incorporate upskilling goals into outsourcing contracts and tie training requirements to the project’s unique demands. These techniques can help you align training with project scope:

• Identify project-specific skills. Determine the technical or soft skills required for the project’s success and tailor training to address these needs.
• Set training milestones tied to project phases. Train teams before every project phase to ensure they can perform their tasks effectively. 
• Collaborate with your vendor on the project’s objectives. Work together to identify areas where training can enhance performance and deliver better outcomes.
• Monitor project outcomes and adjust training as needed. Assess progress regularly and modify the training plan based on project challenges or feedback.
• Incorporate role-specific training. Design training programs based on the team members’ roles in the project. 

Aligning training with the project scope can equip teams with the skills to handle tasks confidently. 

6. Track progress on skill-building during the contract term

Monitoring skill-building progress throughout the partnership can reveal whether training helps you achieve upskilling goals outlined in outsourcing contracts. Here are ways to track skill growth throughout the relationship:

• Assess teams regularly. Schedule periodic quizzes, tests, or performance reviews to evaluate the retention and application of new skills.
• Set clear milestones and deadlines. Break down the skill-building process into smaller, time-bound goals and track every phase.
• Request progress reports from your vendor. Have your BPO partner provide detailed updates on completed training modules and skill assessments.
• Use performance data to measure impact. Track productivity, quality metrics, and other relevant KPIs to assess how skill development affects outcomes.
• Conduct feedback sessions with learners. Regularly check in with your team to gather their insights on training effectiveness and areas for improvement.

Regular tracking allows you to identify skills gaps early and adjust strategies before they affect performance.

7. Champion transparency through regular reporting

Consistent reporting fosters open communication, determines whether you’re meeting upskilling goals in your outsourcing contracts, and aligns parties on progress, challenges, and expectations. Ensure transparency through reporting with these strategies:

• Set reporting frequencies. Define how often you expect to receive updates (e.g., weekly or monthly) to stay informed without overwhelming your team.
• Incorporate performance metrics. Ensure the reports include KPIs that link skill development to tangible business outcomes.
• Centralize reporting. Use a unified platform where you and the vendor can access up-to-date reports and track progress collaboratively.

These transparent reporting practices can help quickly address training or learning issues and facilitate ongoing improvement. 

8. Balance custom learning with clear expectations

Balancing flexibility and enforceable learning outcomes allows you to adapt to your team’s needs while maintaining clear expectations. This approach encourages continuous improvement without compromising accountability. Achieve this with the following tactics:

• Define core competencies. Establish clear, non-negotiable skills and knowledge that teams must master while letting them learn at their own pace.
• Offer flexible delivery methods. Provide options for self-paced learning, live sessions, or on-the-job training, but encourage completion of key milestones.
• Set measurable learning objectives. Ensure each training module has specific, quantifiable outcomes you can track.
• Conduct regular check-ins. Schedule assessments or progress reviews to help learners meet targets.
• Provide individualized learning paths. Tailor learning approaches to suit different skill levels.

These tips can make training flexible while meeting upskilling goals in outsourcing contracts.

9. Evaluate success and use insights to refine goals

An impressive 86% of employees see job training as essential, while 74% are willing to use their personal time to build skills that improve their performance. Given this level of commitment, measuring the success of your training initiatives becomes even more critical. If you do not monitor success, you can miss opportunities to reinforce progress, improve programs, and reward effort. 

Furthermore, evaluating training can provide valuable insights into what’s working and needs adjustment. These insights can shape future upskilling goals and strengthen business performance. These strategies help measure success and provide insights to improve future BPO agreements:

• Gather feedback from all stakeholders. Collect input from your internal team and the vendor to understand how well the training met expectations and outcomes.
• Track performance improvements. Measure key metrics such as productivity, error rates, or customer satisfaction before and after training to gauge its impact.
• Analyze completion and retention rates. Assess how many learners completed the training and how well they retained the material.
• Identify skill gaps or challenges. Use post-training assessments to pinpoint areas where learners struggled to enhance future training content.
• Review alignment with business goals. Align training outcomes with your business objectives and adjust the skill-growth goals or training plan accordingly.

Measuring training impact helps you validate returns, fine-tune learning strategies, and maintain trust with a highly engaged workforce.

The bottom line

Including upskilling goals in outsourcing contracts improves the quality of work and helps your team adapt to industry trends. It also builds a long-term partnership that benefits your business and the vendor. 

Elevate your outsourcing relationships with skill development. Let’s connect to learn how we can help you incorporate these strategies into your agreements.