Agency vs outstaff: easy money or hard work?

Hi everyone, I am Anvar Tagaev, and this is KOTELOV!

One of our customers who employed our developers for outstaff recently claimed that “we sit pretty”: we gave him a specialist, got our fee, and were no longer responsible for anything.

The situation may look very simple for the customer: he sent a request to the company, got an offer, held a technical interview, and introduced the developer to his project. It’s the customer’s job to onboard the developer to the project, set and control the execution of tasks. One gets the impression that the supplier agency seems to be doing nothing but receiving money.

Is this true? Let’s take a look at how outstaff agencies work and what problems they face.

Anvar Tagaev Account Director KOTELOV

This is what we do to be able to help our customer and find a specialist capable of addressing customer challenges:

1. We develop our HR brand: a lot of efforts and funds are invested in this field. The company’s media presence is one of its components. Tiktok, YouTube, Instagram, Telegram: we are present on almost all media platforms and constantly develop content there. This is how we attract experienced specialists to provide them to our customers.
2. We give social guarantees and pay benefits. The developer works on the customer’s project, but we take care of the comfort of their work, corporate culture, and equipment. We pay all the benefits, social package, support in difficult situations, and help improve skills. IT specialists are sophisticated employees, and comfort is a familiar part of the working environment for them. This requires lots of time and resources, and we bear these costs.
3. We train and draw up individual development charts. This is how we invest in the development and growth of our developers. This field is covered by teachers with extensive experience. The training methodology is not a template — it is built with due consideration for the needs of the projects where our experts work. Professional growth for guys is no less important than pay. Our goal is to build long-term relationships with our customers and employees.

Template to assess developer’s qualifications

4. We undertake a lot of risks. For example, we face a delay in payment for our services from time to time, but we can’t delay payments to our employees. This entails additional expenses: we always have to keep x2 of the payroll in reserve, and even borrow funds. We did encounter situations where the customer delayed payment for 6+ months.

The unexpected termination of cooperation with the customer is another problem. We faced a sharp termination of cooperation due to a reduction in the customer budget. In this case, we are urgently looking for another job for the expert, because we still have to pay him a salary during the downtime. It is not always possible to find a new project quickly, which entails additional expenses that we need to compensate.

5. We give guarantees to the customer. We don’t live in a perfect world, and the developer does not always matches the customer team. In such cases, we are ready to replace a specialist on the project. This is also a lot of work for HR and the costs that we undertake.

However, the most unpleasant situation is with customers who decide to lure away our employee (sometimes this happens). We incur significant losses in this situation, because our costs for attracting a customer and a developer actually don’t pay off in any way.

Conclusion: when a customer hires a developer for outstaff, he pays for a quality result and leaves all the risks to us. Outstaff is not about easy money, after all.

What stereotypes about outstaff do you know?