Body Leasing and Team Leasing: Quick Launch Opportunities for your IT Projects
In recent times, interest in strengthening internal software development project teams by adding essential specialists from external companies has grown significantly. This article will help you understand the various forms of incorporating third-party personnel into your projects, as well as learning how to choose an appropriate partner and suitable cooperation model.
Staff augmentation: when you Need Reinforcement
If you wish to develop an IT solution in-house but with the support of a specialized development company, then most often it will be enough for you to choose from one of three types of contract. Options are available with fixed prices, with compensation for time and materials, or with payment for the work of a dedicated team. As we note later in this article, it is also possible to provide a team without the need for a software development contract.
The need for personnel can be met by leasing them, either on standard or specialized terms. Possible reasons for doing this may include:
- a desire and/or necessity to directly manage the development process
- the need to launch a project as quickly as possible while lacking the time to recruit a dedicated in-house team
- experiencing difficulties in an existing project due to a shortage of certain specialists
- the requirement of having a full-time team
- a temporary expansion of the project’s scope of work, or a decision to develop an autonomous element of the project.
Imagine that you have already started a software development project. You have defined the project’s requirements carefully and already recruited a number of key personnel, perhaps a project manager or business analyst, with whom you do not wish to part. However, you now need a targeted strengthening of specialists, perhaps people who own specific technologies or who have useful experience of working on similar projects.
Fundamentally, you want to make the most of the people you already have on staff while, at the same time, partnering with professionals who have the expertise you lack. In addition, you need to complete the project team as quickly as possible in order to reduce the time between the emergence of an idea and the beginning of its development.
In such situations, various “staff augmentation” or “outsourcing” solutions can be used. As part of such a solution, a team is composed of professionals employed and provided by a third-party IT company. If necessary, it is possible to buy out (acquire the right to transfer) the contracts of such employees. All of this is detailed below.
Staff augmentation or outsourcing implies a contractual arrangement in which a third-party company’s specialist employees work on projects undertaken by a client company. As part of its outsourcing services, the company hires, fires, and pays employees’ salaries, provides them with a social package, and offers them remote working conditions.
Essentially, we are talking about a form of staff leasing, whereby companies specialize in temporarily providing IT experts for defined lengths of time, or, alternatively, for the duration of a specific project. Remember, a client working with such personnel can also opt to permanently hire them later on — by buying them out in agreement with their previous employer.
These models are very attractive to clients of different types. Startups, whose investors require specialists to be taken on may benefit particularly from the flexibility on offer from a temporary solution, whereas corporations — who are typically unable to hire people quickly due to excessively bureaucratic procedures or other restrictions, but whom also do not want to carry out an important IT project using a team that does not belong to them — may be rewarded by the option for a permanent arrangement. Staff augmentation, therefore, is beneficial to anyone who, for whatever reason, cannot order a project from a turnkey contractor.
Outsourcing is carried out in two main forms:
- Body leasing – the leasing of one or several experts of the required specialization/s
- Team leasing – the leasing of a fully formed project team
The widespread reality of remote work has had further implications. Offshoring is used when leasing specialists and teams are located at distance, either geographically or in time zones that are substantially different to that of the client. On the contrary, nearshoring occurs when specialists or teams are based in locations much closer to them.
The cost of staffing services is usually determined based on the Cost Reimbursable (CR) approach. This means that the contractor receives compensation for the hours worked by the personnel employed on the client’s projects, as well as the agreed profit.
The chance of finding an unemployed ready-made development team is extremely small because specialists of the right level are rarely out of work. An outsourcing company, having understood the requirements of clients, seeks and hires people from the market. In turn, the client interviews and selects appropriate candidates, thereby receiving specialists on a lease via a fixed monthly payment, or, having coordinated with the outsourcer, hires them on a permanent basis if necessary. Sometimes there are other tailored modifications to arrangements, or various sub-models of collaboration, such as Cost+, but they are not as common within the sphere of IT body leasing services.
If it is necessary to urgently recruit a new participant into a project, as a rule, such a need is serviced by someone from amongst the permanent staff of the outsourcing company. Where more time is available, a wider-ranging search and hiring of a specialist for the project takes place. In this case, the requirements of the client and the budget of the project are more focusedly taken into account, and the final choice is made from several suitable candidates.
By the same principle, complete teams can be brought into a project. Such teams , working under a team leasing mechanism, focus exclusively on one project.
Choosing a company that provides IT Body Leasing Services
Finding a reliable outsourcing company is key. You turn to such a company to save time that would otherwise have to be otherwise searching for and selecting candidates. Therefore, the risk of a project stalling due to insufficient competences, or too lengthy an adaptation process for new team members must also be mitigated against.
Let’s formulate some criteria for choosing a body leasing IT company:
- Appropriate specialization/s in the technologies to be used in the project
- Company portfolio. Particular attention should be paid to successful large-scale projects, as well as any history of cooperation with well-known brands
- Experience in the required industry, understanding the specifics of the types of product being developed
- Efficient recruiting systems and HR management in general. In this regard, there must be a strong team of recruiters with well-established methods for selecting candidates
- The reputation and high rating of the outsourcing company as an employer will also attract more potential talent for your projects
- Presence in various markets. In particular, when a company has offices in different countries this increases the pool of suitable potential coworkers
- Provision of expert support to the specialists sent to you. You are not only interested in the qualifications of individual developers or designers, but also the level of expertise and seniority of the company as a whole. Your projects will benefit from the developer’s ability to consult with their colleagues from the outsourcing company, use its corporate knowledge base, or receive a code review from a team leader, etc.
- Streamlined business processes and good communications. Regular exchanges of opinions about the quality of the work of the specialists concerned will help them demonstrate the best versions of themselves
- Responsible attitude to the confidentiality of ideas and technologies related to the project
- The ability of the company to work according to the methodologies by which the client manages projects. This is especially important when outsourcers join a project that has long been under development
- Reputation, information openness, and transparency of the company’s scheme of work.
Having found a company that meets these requirements, it is advisable to establish a basis for long-term cooperation, relying on it in all future cases where you may need staff augmentation. This encourages the talent provider to send their proven professionals to you, expand the information base of possible candidates, and apply an analytical framework to their cooperation with you to better understand your requirements for specialists.
Taking an individualized approach to the client is important in this area as well. For example, where you have a small startup that does not have a technical team leader. In such an example, you can be provided with such a specialist on an hourly basis, thereby making it possible to satisfy the need for code review/s and consultations with developers.
Selection of Candidates for Project Teams
When searching for and selecting the specialists you need, first of all you may consider the full-time employees already on the books of the outsourcing company which meet your requirements. If the outsourcer not only provides staff but has also implemented many software development projects itself, information about its own experts will be the most complete and comprehensive available.
However, most likely, the outsourcer will have to actively search for and hire the right employee specifically for your project. Remember, it is expected that the client is also invited to participate in the choosing of a specialist, where the following considerations should be taken into account:
- The tech stack that the candidate knows, i.e. programming languages, frameworks, libraries, platforms, as well as other tools and solutions that they can apply
- Certification for the required technologies, e.g., for eCommerce, this could be Adobe Magento certification, or for working with cloud solutions, certification of any of the leading vendors such as Microsoft Azure, AWS, etc.
- The experience and seniority level expected by the client, or the number and nature of completed projects. Separately, it is worth considering any experience in projects that are relevant to what you have planned, as well as the availability of domain expertise
- Reviews and recommendations from clients and the professional community
- English proficiency
- The ability to work with the project management methodologies used by the client.
- Soft skills
The final say when choosing from several relevant candidates, of course, remains with the client. The outsourcing company will undertake the legal registration of labor relations with specialists to whom offers are made
Common Body Leasing Tricks and How Not to Fall For Them
Now let’s talk about the pitfalls of body leasing and how to avoid them.
Unfortunately, there are always companies that voluntarily or unwittingly mislead clients, embellish reality or display wishful thinking. At the same time, the experience of using staff leasing shows that most of these mistakes can be avoided and incompetent people can be prevented from entering projects.
Let’s go through the most popular tricks of unscrupulous contractors. In doing so, we will teach you how to counteract them:
- Overstating the number of years of programmer experience in CVs. This can be verified during the interview process with candidates, as well as by comparing given answers with the information on the CV
- Overestimation of the level of English, which is often revealed during an interview or testing
- Candidate substitution. Yes, believe it or not, this can happen too. One person may successfully attend an interview, but another will turn up to work. It is therefore obligatory to conduct an interview, as well as subsequent work-related meetings using video
- A long chain of intermediaries «selling» the same candidate. A dishonest company can showcase a programmer who doesn’t work for it, but with a similar company. This can be counteracted through direct questioning at the interview, as well as by including the option for the developer to transfer their employment permanently to the client company in the personnel leasing services contract. As a rule, such a condition is refused by an agency in which this specialist is not employed
- An abuse of the working time of the developer allocated to the client. This can manifest itself in distraction when a specialist is working on other projects. Sometimes even the deliberate simultaneous inclusion of the same programmer into two projects for different clients can occur, which is easily done when working remotely. All this can be prevented by monitoring work through the project manager (PM)
- Overestimation of tasks, and as a result, an unreasonable overstatement of payments for staff leases. This problem can be mitigated against by the PM and team lead on the client side.
It is worth mentioning that most of the unfair practices listed above occur when working with firms from countries with a low technical and business culture. It is therefore advisable to avoid them. Companies with in-house technical expertise have fewer problems applying the body leasing model, as they can control processes and recognize any tricks.
Experience shows that in most cases, it is possible to significantly mitigate risks when completing a project team. To do this, the client needs to follow the advice that we have provided above on the careful choosing of an outsourcing company, and also actively participate in the selection of specialists according to the process we have described.
What Should be Provided in a Contract for Outsourcing
In an outsourcing contract, the set and description of services, requirements for their quality, as well as the responsibilities of the parties and pricing conditions are agreed upon. Efficiency indicators for outsourcing services can take the form of monitoring levels of satisfaction with applications in percentage terms, or the time spent on the implementation of applications. In addition, it is recommended to provide for the following conditions in any outsourcing contract:
- Description of the procedure/s for selecting candidates and working with them
- The contractor must find and propose a given number of people who meet the requirements (for example, no more than 10 per vacancy)
- The provision of a free replacement in case a selected candidate does not pass the trial period
- Conditions for determining the cost of the working time of specialists. These amounts may be based on an hourly rate or full-time equivalent (FTE). Payment for weekends and holidays is negotiated separately
- A mutual obligation to refrain from poaching. That is, the contractor does not entice the client’s customers, and the client, in turn, does not entice the contractor’s developers. Thus, a mirrored commitment against poaching is established
- A reasonable mechanism for clients to continue working with a leasing team they like without the express participation of the contractor. The contract may provide for the client’s right to hire an entire team, and pay the contractor for the cost of 3-6 months of work. In the case of a long-term, for example, three-year cooperation, such a right can be granted free of charge
- Clear conditions for any termination of a contract with a mandated prior notice period of at least 1 month.
As for deciding the financial terms of cooperation on outsourcing, they usually involve a monthly payment, as well as a preliminary guarantee payment. The amount of such an insurance payment is agreed upon separately, but in practice, it most often equals the payment for 1 month of work for 1 employee.
It will be appropriate to talk about the client’s management of project teams, wholly or partly consisting of leased members. Personnel leasing increases not only the number of possibilities available to clients, but their responsibilities too.
It is the client who bears the risk of paid downtime, schedule, or budget overruns. To use outsourcing widely, you need to have a certain capacity for management and control in place. Accordingly, any initiator of software development projects must realistically assess their capabilities, considering that in the absence of project development management experience and the relevant personnel, it may be better to outsource the project entirely. Furthermore, development by sprints, where every 2 weeks a defined result is delivered, allows the client to focus on communication with the project team and the demo.
Ideally, for the effective use of rented personnel, the client should have a tech-savvy team, including a PM, a team lead, and, preferably, a business analyst. But this doesn’t necessarily always have to be the case, and there is the potential for tailored solutions to be made available.
It could be recommended that, at least on an hourly basis, managers, experts, and analysts from the outsourcing company are involved in the project. It is also advisable to consult with the contractor on the issue of project management, structure the development according to Kanban or Scrum principles, periodically review code, carefully test it, draw up detailed documentation, and so on.
Ultimately, body leasing and team leasing brings with them a whole host of attractive opportunities that you will have to learn how to fully utilize. Yet where the level of a client’s technical expertise remains insufficient for independent project management, the best option is to order development from a specialized company. The contractor, whose payment may be based, for example, on the results of two-week sprints, will bear full responsibility for development.
From the article you have just read, you will have learned about the advantages of outsourcing. Our guidelines can help you to effectively use body leasing and team leasing for software development projects of all types and sizes.
In most cases, finding and hiring talent is best done on a per-client and per-project basis. It should be taken into account that good specialists rarely stand idle without work, and when hiring for a promising project, you should aim to choose the best developers.
We keenly recommend that you include the possibility of buying out contracts of developers or teams in your outsourcing arrangements, even if you do not plan to do this right now. This way, you will not only receive additional guarantees from the contractor but will also be given the chance to secure the composition of a successful project team in the future.
The right choice of an outsourcing service provider will allow you not only to acquire desired specialists, but also give you access to the expertise and accumulated knowledge base of a successful software development company. It is worth using the services of not only programmers but also team leaders, as well as consulting with a contractor. At SECL Group, we are always ready to provide such a comprehensive service and help you select the best developers, designers, and other IT specialists for your projects.