how to choose from 150 contractors the one with whom you will live happily ever after
As you can imagine, two people can play this game. And the second main character will be you – the client who seeks to work with an effective supplier on favorable terms. How to find one like this among hundreds of similar ones?
Many IT agencies offer outstaffing of programmers as a core or related service. For some, this is additional income, while others have chosen the strategy of a recruitment agency. In this case, the benefit of attracting external specialists is small: there is no interest on the part of account managers or outstaffers themselves.
What is important to you? Most likely, high performance, completion of tasks, diversification of resources, impact, if not on business metrics, then on team productivity. And often the low level of standards in the market is the reason why the entry barrier becomes higher, and the wariness towards new IT personnel suppliers becomes greater.
You, as a client, cannot be 100% sure of the quality of the service before the start and until the specialists have worked for several months. It turns out that each signed supplier will spend from one to three months, and if unsuccessful, the cycle will have to be repeated.
Product approach to IT outstaffing
How to save time and resources even before the tender or before the search starts?
First. Formulate what you really need. Closing several positions is just the tip of the iceberg.
You recently released an MVP. Now resources are limited, and you want to test new hypotheses with the involvement of external programmers and analysts.
You have large-scale work to do to optimize or update the service, and strong senior Python developers are hard to find.
You do not have enough personnel to complete specific tasks.
And although the basic requirements for the contractor are the same, the emphasis on the skills and experience of specialists, the specifics of the company, will vary.
Formulating a goal will help you to weed out completely irrelevant incoming requests right from the start or save time on evaluating the selected ones yourself.
Remember from your experience when you were offered to buy developers and testers, and how often you did not meet expectations? And how long did you look for a replacement?
The actions of the supplier and the quality of its services affect you. This is not only about long-term cooperation, but also about business development.
Second. Ask what data the outstaff contractor tracks.
“Green” flag – if the supplier keeps statistics on its work. You get more specific data and form your expectations based on it.
I act as a product owner in the company. The attentive reader will notice that the role of a product owner for a service company is not entirely typical. Let's figure it out:
A product can be tangible (goods) or intangible (service). Outstaffing of IT specialists is a service that has users or consumers.
Users are not mythical b2b companies, but very specific people in positions.
Each position has different expectations from the service. Understanding these expectations and taking action to achieve specific goals is the key to growth.
We understand what proposal we are making for each role, and what tasks remain to be solved. You can’t just assign IT specialists and hope that they will work for six months or a year. The process can and should be managed, although some uncertainty remains. We are developing the IT outstaffing service as a product and offering this product to clients.
The idea of collecting and counting something did not come immediately. First, we tried to conduct desk research and brainstormed with the team on how we could reach a high level of service.
Then we realized that we could not see the whole picture, including repeating after our competitors. And they started asking clients.
What problems were found:
Non-client-centric: they simply send CV candidates from the market without guarantees that they will perform well,
Discrepancies in conversion and other metrics, for example, specialist grade,
Centralized hiring and a long approval process – when it’s easier to find staff,
There are no guarantees that an IT outstaffer will be interested in the product, even if it is a senior or team lead. But I want a charged driver inside.
And that's just part of it. What to do about it? We have learned to pull out the actual needs of specific clients from similar questions in order to assemble a more complete picture from them, like puzzles.
And it is important for us, as performers, to receive timely feedback on the quality of the service so that we can come up with a solution. Or keep abreast of updates, including if your needs have changed over the course of a year or two of cooperation.
Third. Determine qualification requirements.
Relevant for tenders, but some of the criteria can also be used by startups. Assess the company by staff, revenue, size of clients (for example, with a turnover of X million per year). Formal written requirements will help you focus on candidate companies that are more likely to provide the service at the required level.
Criteria categories may include:
Minimum – turnover, clients with whom I worked. Bonus points for letters of recommendation, reviews, contacts.
For the procurement process: price proposals, CP and their compliance with the grade/market.
Estimated: rates, staff, number of clients with a certain turnover.
Here we will omit the criteria of purchasing managers and the general principles of selecting suppliers: financial indicators, number of specialists, portfolio, etc. Let’s focus on those metrics that affect the efficiency of contractors and that are not used in the market as a method for comparing suppliers and assessing their impact.
IT outstaffing 2025: Speed, conversion, team stability, SLA
Thanks to such castdevs and research, we received enough texture to change the processes.
Main thesis: to the client you need confidence that the service will be performed in accordance with expectations, and there will be no need to work in unpredictable and fragile conditions, when in large companies there are many deadlines, deadlines and KPIs.
We can't just promise that it's with us once and for all. Therefore, we back up our promises with data.
Let’s look at a stable pyramid that helps prove the effectiveness of our service-product.
Closing speed
Deadlines are a universal pain. It's always a question: how long will it take before we close the position?
Many customers have dozens of accredited suppliers, and tenders receive 100-200 responses from similar companies. At the same time, not all companies are interested in working (or simply cannot, have not assessed their strengths): in words everything may be fine, but they do not want to work on real proposals. So it turns out that they are hanging for quantity.
Or another situation. Recruiters have been saying for several weeks that there are no candidates and the project is at a standstill. Then the expectations from the supplier are higher, because you need to show x3 speed compared to independent recruiting.
Conversion and % of closures
If less than 20% of 100 resumes shown by a contractor are approved, then this is a mediocre result. Your own recruiting can perform just as well, if not better.
In practice, it looks like this: they bring you dozens of CVs, you interview candidates, and somewhere around 1-2 are really suitable. The advantage of working with outstaff is saving resources, and you should take advantage of this.
It is important that the contractor delivers consistent quality and not one-time bursts. If candidates perform well in interviews, then they will perform at the same level in their work. In this regard, working with outstaff developers is more manageable than in the case of “market” applicants.
Of course, the opposite also happens – the developer passed the interview stage, but problems began to arise in the work. This is also a question of supplier quality. After all, if a position is closed by increasing experience or stretching a grade, then the value of such personnel is low.
Ivan, CTO of traveltech company
This parameter already shows at the start how many resources you will have to spend on assessing candidates. At the company, we have developed a North Star metric: one impression – one approval. This saves both the client’s time and our resources. It’s better to show 1-3 resumes and get results than to spam candidates from the market at random.
eLT on the project or Team stability
There are two types of clients: project clients, where there is a beginning and an end, and product clients.
In the first case, we must ensure that the IT specialist works on the project from start to finish, taking into account the interests of the customer and the specialist.
But product teams are aimed at long-term cooperation due to the continuous development of products, and the boundaries between in-house and outstaffers are reduced as much as possible. This helps to unite and quickly demonstrate a high level of results.
But can you notice the difference right away?
The first 3 months are essentially onboarding and adaptation. This is the valley of death where everything can go wrong. Only after 3-6 months does addiction and organic integration into processes begin. And if turnover begins, the team will lose motivation to conduct high-quality onboarding – they need a reliable and interested IT specialist.
As a team lead, it pains me to learn that after just a couple of weeks of work a person leaves the project. It turns out that not only was the onboarding in vain, but also the team’s time was taken away.
Oleg, TL foodtech company
We put it in SLA
Clients place their work with IT service contractors on an industrial basis and prefer to rely on facts when comparing their effectiveness.
After all, you want to understand as best as possible which of the 100 companies is the top performer, and not Leo Tolstoy.
We work with clients according to SLA. This is a guarantee that the client will receive a result that meets his expectations within a certain time frame.
SLA (Service Level Agreement) is a document that defines the obligations and responsibilities between the service provider (for example, a company providing IT services) and the client (service user). An SLA typically specifies quality criteria and service levels that must be achieved or maintained.
Let's look at how the document helps set the client's expectations.
Service Levels (SL)
This includes defining specific metrics and metrics to measure service performance, such as match rate, conversion, eLT.
— Install qualification and experience requirements personnel assigned to the project.
— We guarantee providing a replacement if the main developer is unavailable for any reason.
— We note the rules for revising rates.
— We set boundaries for % conversion, minimum volume of shipments to maintain the right to receive future requests, stability of LT resources.
Service Level Commitments
We describe what we, as service providers, undertake to provide to the client: response time to requests, organization of replacement or offboarding.
For example: replacing an outstaff developer with a specialist of the appropriate level will take 3 working days.
More clearly in the table:
Monitoring and reporting procedures
We determine how we will track and measure SL metrics, what information we will transmit to the client in reports.
Here too:
How often and in what format do we share reports on the progress of work and achievement of key project milestones.
What communication channels do we use to quickly resolve issues and problems between the client and the outstaff team on the project?
Penalties and compensation
From our side:
Indication of possible fines or compensation in case of violation of the SLA terms. Everything is simpler here. Increase in order and receipt, or refusal of your services and letting more efficient companies come forward.
From the client side:
Touchdown, transition to state. We choose to agree in advance what to do in such cases, rather than pretend it will never happen. But both parties must understand the risks and responsibilities.
How to work with this?
I’ll tell you from our experience how we use key data at all stages of communication with the client.
We add general statistics to the commercial offer, and at the presale we update the data on the requested stack. After signing, we draw up an SLA, where we also indicate the selection period, conversion, rates and other points discussed above.
But it doesn't end there. Once a month we share with clients reports on the work of our specialists, which we prepare based on the team’s feedback. If something goes wrong, we have the opportunity to find out about the problem in a timely manner and solve it.
And how effective this is (and whether it is redundant) can be judged by clients who, on their side, also collect data on the effectiveness of suppliers.
In this article I tried to organize my speech at Merge Conf. By the way, here it is 🙂 The main difference is that at the conference you could ask questions from the audience, and we could discuss them in the comments.
It will be interesting to know the opinion of client representatives on how they evaluate the effectiveness of outstaff contractors. Do you pay attention to metrics? What is important to you in a supplier?
And if there are outstaffers among you, what trends and changes have you noticed in your work?
