Body leasing or programming outsourcing in IT
Grzegorz Papaj, 3 December 2018
Body leasing (employee leasing) is one form of collaboration with IT company. Simple programming outsourcing or competence outsourcing are examples of possibilities to extend our IT department. On the other hand, HR companies don’t connect us with any programming company. Team leasing is more advanced form of body leasing. The following article discuss advantages and disadvantages of such solutions.
Labor market still suffers from deficit of developers and IT workers. Is the internal recruitment process the only way to supply increasing demand for IT specialists? What are the other options and when they can be tried out?
Problems with recruitment of developers in IT
The recruitment of programmers is a traditional way to fill the vacant posts and in some situations it is the rightest way, specially when company decides to permanently build up the department or structure. Unfortunately this classic model cause many problems when it comes to IT. Nowadays there is a fair shortage of developers in IT industry. Because of that, candidates are quite picky when it come to job offers. Furthermore, it takes more time for them to make a decision about cooperation. At the same time, because of employee market, already hired developers are more prone to walk out of current worksite and move to other employer. It doesn’t quite matter, when it comes to employment based on labor contract or other. When you manage IT department, you have to reckon with constant risk of serious personnel change and increasing costs of recruitment.
The certain answer for need of constant recruitment are new HR companies which are mushrooming on the market. They often specialize in recruitment of IT department employees. Most likely the HR companies are pretty good alternative for recruitment ran by one one’s own. The costs can be lower and companies specialized in recruitment of developers should have tools to verify their competencies. Unfortunately, the reality is often different. I heard often opinions from clients who tried this type of service with very different final effects. Usually HR companies provides set of seemingly quite good CVs with various real skills. Potential candidates rarely pass the competency tests of technical skills. That’s why after receiving a list of CVs, the internal verification of “paper specialists” is necessary anyway. In practice HR companies only release company from some of the problems related to job offers and initial verification. The rest remains the same. Recruitment companies mainly take on the necessity of placing job offers because they know better where do it. The don’t solve problems with keeping developers and have little responsibility for the effectiveness of recruited coders. Their profit doesn’t depend in any way on projects’ succeed within the established deadline and budget. HR companies very often offer model similar to body leasing, in which they formally hire a person for client. In practice, however it has the same problems ad classic HR services.
Direct recruitment or with the help of agent involves with certain problems. Primarily, addressing staff shortages can last quite long period of time. Above all, hiring an employee on a long-term basis isn’t always optimal. Sometimes it is better to find an expert who works in the company for short period of time will bring knowledge and experience and share them with the rest of the team. In this situation, the body leasing (employee leasing, team leasing) or in other word “renting” the expert in certain subject from supplier seems to be better option. Formally it is the external employee, so company doesn’t bear the administration and staff costs. The solution seems to be perfect, but it’s not always like that. Primarily body leasing very often is not much different from HR companies. The provider of body leasing service present the set of CVs with various skills at choice. The advantage of body leasing is that we have access to many experts at hand, and agreement with body leasing company usually is not a long-term commitment and lets to change chosen person.
The programming outsourcing is an alternative for body leasing. Basically, it involves commissioning the project (or part of it) to an external programming company. While in the case of body leasing, the project is managed mainly internally but implemented by external developers, in programming outsourcing the project is also managed outside the company. On the one hand, it connects with lack of full control over building the system, but on the other hand with smaller organizational and administrative overheads associated with creating management staff. So the burden of running the project falls on supplier, but in return usually what is going on with the project is little known, until the contractor present it for final acceptance. The important shortcoming of this cooperation model is that it connects with different kind of organizational overhead – the necessity to prepare specification and to choose contractor what always involve some risk. And of course, not every project will be suitable for this kind of collaboration – it is not always possible to explicitly specify the specification in advance, especially when it comes to taking charge of maintaining the other provider project.
Competence outsourcing is a quite new thing on the market. This service is somewhere between body leasing and classical programming outsourcing. When the classic outsourcing is accounted "for a project", i.e. fixed-price, competence outsourcing is accounted for the working time of specialists, just like body leasing. When it comes to body leasing, it is necessary to specify the parameters of the required specialist or specialists, and on this basis the supplier presents a list of CVs. In competence outsourcing, the supplier selects people for the project by itself, often changing them during the project if the need arises.
Competence outsourcing combines the best elements of body leasing and classic outsourcing. It is also a service defined at a higher level. This means, that supplier has bigger impact on the implementation of works and selection of solutions. Just look at difference in request for quotation. In the case of body leasing, we define the need in this way "I need an Android programmer with 4 years of experience". In the case of competence outsourcing, we will say "I want to create a mobile application that will be used by ten thousand people every day and that will continue to run smoothly." This completely changes the point of view and allows a supplier to demonstrate skills not only in the strictly technical area (code creation), but we can also count on help at a higher business-technical level. A programming company may suggest the appropriate team to perform the service or perform it in another technology (e.g. React Native)
So where is the catch? Of course, there is always a risk that the supplier will not work as quickly and efficiently as could. After all, it seems in its interest that the project will last long and bring more money. And probably some of the suppliers understand it in this way. However, it is in the interest of a good supplier to fulfill their obligations reliably and to build long-term reliable cooperation. Any attempts to trick a customer in the long run are easy to spot and usually mean notice of contract. A reliable contractor will take care over building trust with his client, knowing that transparency is the basis of this service. And it can be accomplished in many ways, for example by providing detailed hourly reports on completed work.
Which model of cooperation with IT specialists will be the best in your case? You have to answer this question by yourself. If you want to form (or expand) a permanent team, it’s probably worth to getting interested in employment directly or indirectly. If the project is brief or you are looking for temporary support, analyze pros and cons of body leasing and outsourcing models. This table may be helpful.
|Paremeter||Own IT department||HR agency||Body leasing||Programming outsourcing||Competence outsourcing|
|Form of payment||work time||work time and brokering||work time||effect||work time|
|Time of access to developers||standard||shortened||short||very short||very short|
|Easiness of staff changes||small||small||big||not applicable||big|
The subject of satisfying the demand for programming services is wide, and choosing the right model for our needs can be a difficult task. We are happy to discuss it and help you choose the best solution.