In many SME and MSME IT outsourcing setups, the biggest challenges aren’t technical.

They’re systemic built into how people are hired, used, and let go. 

On the surface, everything looks normal: companies claim they have teams, talent benches, delivery systems, and structured staffing. But behind the curtain, the reality is far more chaotic. 

Most firms don’t actually have teams.
They have a cycle. 

A cycle of hiring fast, firing faster, and locking people in when it benefits them all in the name of quick delivery. 

And this loop affects the client more than they ever realize. 

How the Loop Starts 

A new project comes in.

There’s no in-house capability, so the company immediately scrambles to hire someone “anyone“ who can start tomorrow. 

Instead of building stable teams, they depend on:

• • market availability
  • speed
  • and short-term fixes

Not on skill, structure, or alignment.

And then the loop begins:

• • If the person doesn’t perform ➝ they’re replaced
  • If the client’s project slows ➝ they’re released
  • If the company fears they may leave ➝ they’re locked into restrictive agreements

It’s a cycle driven by insecurity, not strategy.

The Human Impact: Quiet Fear, Quiet Frustration 

The people inside these systems don’t grow; they survive. 

They don’t get feedback. 
They don’t get mentoring. 
They don’t even get stability. 

They’re hired on Monday, fearful by Thursday, and job-hunting again by Saturday. 

As discussed internally,
“You can’t expect good work from someone who is always scared of being replaced.” 

This fear leads to:

• • Minimal initiative
  • Poor communication
  • Zero ownershipQuiet resentment 

And clients feel it through erratic performance, delays, and inconsistencies. 

The Client Impact: A Constant Reset Button 

From the client’s perspective, everything appears fine at first.
The project has started, stand-ups are happening, tasks are moving. 

But internally, the company is replacing people like spare parts. 

Every new developer means:

• • Re-explaining business logic
  • Losing context
  • Increased bugs
  • Delayed timelines
  • Missing accountability

And the client keeps paying for the same learning curve again and again, without ever being told why. 

Many times, the person working on the project today is different from the one who started last month but the client is still billed under the same “team” name. 

Why Companies Fall Into This Loop 

Because it’s easier than building real capability. 

➝ It’s easier to hire someone for 3 months. 
➝ Easier to remove them when they fail. 
➝ Easier to hold people back with contracts. 
➝ Easier to blame the talent instead of the system. 

But this short-term convenience creates long-term instability for clients, teams, and delivery quality. 

A Better Way Out of the Loop 

A healthier outsourcing ecosystem needs: 

• Stable internal teams 
• Honest hiring processes 
• Structured onboarding 
• Respectful exits 
• Long-term skill investment
• Psychological safety for employees 

When people feel secure, they perform better. 
When people grow, clients gain continuity and quality. 

You can’t build dependable delivery on fear. 
You build it with trust, clarity, and consistency. 

As one powerful line from the conversation captured perfectly: 

“If your system depends on replacing people every few months, the problem isn’t the people it’s the system.”