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You'd be amazed at how many companies don't write their own apps. I know, because often the people who write them is me. The problem is that there's a fixed,

You'd be amazed at how many companies don't write their own apps. I know, because often the people who write them is me. The problem is that there's a fixed, small quantity of good, senior, Mac/iOS developers. A lot of them like being independent and flitting around from project to project because that is how you build an experienced developer to begin with. Meanwhile there is all this demand for apps, and so agencies act as the "market-markers"–acting as the sales force, the marketing team, and playing the role of "nobody got fired for hiring $AGENCY" etc.–but the actual lead engineers are pretty much the same bunch of schmucks no matter whose name is on the contract. If you want to know who wrote it, check the names in the header files, and we all meet at the same bars on Thursday nights. I always advise people to cut out the middle man and hire the indies directly (disclosure: that would be me) since it's the same thing anyway, except cheaper and with fewer games of "telephone". But the pull of the pretty logo and the rapport with the Account Manager is strong. Black Pixel is better than most of the agencies in that they do a large amount of their work in-house. But their "in-house" people are often just good contractors taking a break from contracting so I'm not entirely sure what you've accomplished by doing that. I'm not really complaining–agencies have historically been a reliable source of gigs for me, and so they are my friends; they provide me a valuable service. But do they provide you a valuable service? That I don't know. I have been in situations before where no matter which vendor the customer went with, I would be an engineer on the project, and the customer sat down and agonized over who to choose. That just seems inefficient.

yeukhon 11y ago
It's called "consultant." Companies like to hire consultants because they can get rid of these contractors through middlemen in a matter of a day to a few weeks. Of course, depending on which consulting agency. For projects you don't know the outcome yet it's better to write off your book that way, but for project that will last forever like Twitter App, yeah, just hire the damn team into full time already. Differently cheaper. Actually I don't understand why they can't just have the iOS team help with it anyway. If you are capable of writing a Mac App, how hard is it to learn making iOS one, and vice versa?
- cballard 11y ago
  Twitter's employees are presumably all at-will, so they could get rid of any of them immediately, if they wanted to. It's probably harder to hire them in first place though, instead of just hiring an agency.
  - dpark 11y ago
    It's not free to terminate an employee in the US. The (former) employer pays for the cost of unemployment claims. A company like Twitter will likely also pay severance, because it makes them considerably less attractive to future hires if they don't, and also because it can be cheaper than dealing with a potential lawsuit from a terminated employee.
    - amorphid 11y ago
      In the USA, or at least in California, the employer does not pay the unployement benefits to the former employee. The benefits are paid by the state, which in California is http://edd.ca.gov http://edd.ca.gov. The employer pays for unemployment insurance. If the employer has relatively few former employees filing for unemployment, that insurance rate may go down over time. The concern over covering the costs of unemployment benefits are related to a possible increase in unemployment insurance premiums. Source: http://www.calrest.org/tips-for-protecting-your-unemployment-insurance-rates.html http://www.calrest.org/tips-for-protecting-your-unemployment...
      - dpark 11y ago
        Yes, in the US most corporations pay unemployment tax (apparently nonprofits and government agencies can get a special reimbursement deal where they pay directly for unemployment costs). As you noted, unemployment taxes increase for corporations with lots of former employees claiming benefits. The fact that it's not direct doesn't eliminate the cost.
  - virmundi 11y ago
    While at-will seems like firing quickly is common, it's really not. In a large company there are often (not always) many HR hoops to go through in order to fire. Often these have to do with legal processes. For example, an employee might have developed alcoholism. A company cannot legal dismiss the employee if the employee is willing to go to rehab. They can fire a contractor/consultant (provided the contract allows for that). It also has to do with morale. If Jim just disappears and he's a FTE, that makes people nervous. They might start looking at a different positions. If Sally the consultant is gone tomorrow, oh well. There is often an "us" v "them" relationship between FTEs and consultants. It's not necessarily antagonistic, but it's not as amicable as FTE to FTE.
mmatants 11y ago
At least in theory, agencies also do a lot of account management legwork. Of which there is a lot for large clients. Which merits critical attention, but there it is for now.
sebiol 11y ago
I used to work at a big company's inhouse development. We had many developers coming from either consultancies or agencies. The department and the developers would have been happy to cut out the middle man but policy dictated using the agencies. In my opinion it has to do with the people making up the rules thinking of developers as interchangeable. So they want a contract with a firm, stating that this firm will provide a developer with skill X for duration Y.
- gutnor 11y ago
  Sometimes, like in the UK, the agency is used to avoid getting caught by employee regulation or IR35. When caught, the client is considered the employer of the contractor and the contractor an employee. That has costly consequences on both, hence the intermediary. About the cost though, if you do the hiring yourself, the overhead is around 5%. Quite OK for insurance considering the agency also handle payment and invoicing (some big clients are bad at paying on time, but the agency will still pay you on time, weekly for example). If you use the agency for recruitment too, that jumps to 20% and much more depending how much service you require up to full outsourcing.
  - wsc981 11y ago
    In The Netherlands this is the main reason why big companies use agencies as intermediaries. It makes it easy to get rid of people when required. I suspect the contracted developers are often of higher quality than your average dev, since they feel safe finding work without the security of a permanent job. Therefore, if the need arises to let people go, I doubt the contractors will be the first to leave unless absolutely required. Disclaimer: I'm a Dutch contractor and while I don't think I'm an über developer, I do notice I'm more passionate about the job as most of my (ex-)colleagues with permanent contracts.
jakobegger 11y ago
I believe that a lot of developers aren't very good at talking to customers. I've often seen developers advertise something like "Typo3 development services", but their prospective customers have no idea that this is what they are looking for. So the agency translates between customers and developers. It's common that devs think that the agency isn't necessary, but only devs that are really good at talking to customers actually succeed in cutting out the middle men. (And I presume that these people end up startimg their own agencies sooner or later) The other important point that you mention is customer acquisition and trust. How should prospective customers find you? How should they evaluate you? From hiring designers, I know that portfolios are only part of the picture... hiring an agency at least gives you peace of mind that someone will answer your mails instead of ignoring you.

yeukhon 11y ago

It's called "consultant." Companies like to hire consultants because they can get rid of these contractors through middlemen in a matter of a day to a few weeks. Of course, depending on which consulting agency. For projects you don't know the outcome yet it's better to write off your book that way, but for project that will last forever like Twitter App, yeah, just hire the damn team into full time already. Differently cheaper. Actually I don't understand why they can't just have the iOS team help with it anyway. If you are capable of writing a Mac App, how hard is it to learn making iOS one, and vice versa?

cballard 11y ago
Twitter's employees are presumably all at-will, so they could get rid of any of them immediately, if they wanted to. It's probably harder to hire them in first place though, instead of just hiring an agency.
- dpark 11y ago
  It's not free to terminate an employee in the US. The (former) employer pays for the cost of unemployment claims. A company like Twitter will likely also pay severance, because it makes them considerably less attractive to future hires if they don't, and also because it can be cheaper than dealing with a potential lawsuit from a terminated employee.
  - amorphid 11y ago
    In the USA, or at least in California, the employer does not pay the unployement benefits to the former employee. The benefits are paid by the state, which in California is http://edd.ca.gov http://edd.ca.gov. The employer pays for unemployment insurance. If the employer has relatively few former employees filing for unemployment, that insurance rate may go down over time. The concern over covering the costs of unemployment benefits are related to a possible increase in unemployment insurance premiums. Source: http://www.calrest.org/tips-for-protecting-your-unemployment-insurance-rates.html http://www.calrest.org/tips-for-protecting-your-unemployment...
    - dpark 11y ago
      Yes, in the US most corporations pay unemployment tax (apparently nonprofits and government agencies can get a special reimbursement deal where they pay directly for unemployment costs). As you noted, unemployment taxes increase for corporations with lots of former employees claiming benefits. The fact that it's not direct doesn't eliminate the cost.
- virmundi 11y ago
  While at-will seems like firing quickly is common, it's really not. In a large company there are often (not always) many HR hoops to go through in order to fire. Often these have to do with legal processes. For example, an employee might have developed alcoholism. A company cannot legal dismiss the employee if the employee is willing to go to rehab. They can fire a contractor/consultant (provided the contract allows for that). It also has to do with morale. If Jim just disappears and he's a FTE, that makes people nervous. They might start looking at a different positions. If Sally the consultant is gone tomorrow, oh well. There is often an "us" v "them" relationship between FTEs and consultants. It's not necessarily antagonistic, but it's not as amicable as FTE to FTE.

mmatants 11y ago

At least in theory, agencies also do a lot of account management legwork. Of which there is a lot for large clients. Which merits critical attention, but there it is for now.

sebiol 11y ago

I used to work at a big company's inhouse development. We had many developers coming from either consultancies or agencies. The department and the developers would have been happy to cut out the middle man but policy dictated using the agencies. In my opinion it has to do with the people making up the rules thinking of developers as interchangeable. So they want a contract with a firm, stating that this firm will provide a developer with skill X for duration Y.

gutnor 11y ago
Sometimes, like in the UK, the agency is used to avoid getting caught by employee regulation or IR35. When caught, the client is considered the employer of the contractor and the contractor an employee. That has costly consequences on both, hence the intermediary. About the cost though, if you do the hiring yourself, the overhead is around 5%. Quite OK for insurance considering the agency also handle payment and invoicing (some big clients are bad at paying on time, but the agency will still pay you on time, weekly for example). If you use the agency for recruitment too, that jumps to 20% and much more depending how much service you require up to full outsourcing.
- wsc981 11y ago
  In The Netherlands this is the main reason why big companies use agencies as intermediaries. It makes it easy to get rid of people when required. I suspect the contracted developers are often of higher quality than your average dev, since they feel safe finding work without the security of a permanent job. Therefore, if the need arises to let people go, I doubt the contractors will be the first to leave unless absolutely required. Disclaimer: I'm a Dutch contractor and while I don't think I'm an über developer, I do notice I'm more passionate about the job as most of my (ex-)colleagues with permanent contracts.

jakobegger 11y ago

I believe that a lot of developers aren't very good at talking to customers. I've often seen developers advertise something like "Typo3 development services", but their prospective customers have no idea that this is what they are looking for. So the agency translates between customers and developers. It's common that devs think that the agency isn't necessary, but only devs that are really good at talking to customers actually succeed in cutting out the middle men. (And I presume that these people end up startimg their own agencies sooner or later) The other important point that you mention is customer acquisition and trust. How should prospective customers find you? How should they evaluate you? From hiring designers, I know that portfolios are only part of the picture... hiring an agency at least gives you peace of mind that someone will answer your mails instead of ignoring you.