4 ms·

Maybe, they could pay market price than? Oh, the only target is to be cheap.. Okay then

mikekchar 8y ago
To be fair, the OP was referring to all large outsourcing companies. There are a lot of outsourcing companies that charge well over the rate for a full time hire (they don't necessarily pay their employees that, but...) I worked briefly for one such "body shop" and I found that the company billed my time at a rate of about twice what they paid me. As far as I can tell, it tends to slot in between a full time employee and an independent consultant/contractor in terms of price. Why do companies pay this premium? For one, it may be because they have a budget for a "6 month project" (wink, wink, nudge, nudge) but not for a full time hire. Sometimes it's because they think that they'll be able to pick and choose the best developers from inside a large organisation (and sometimes it works out that way... almost never, but sometimes...) But really it's just a matter of being naive, I think. The company I used to work for (as an independent contractor... ahem...) went through a phase where the CEO was absolutely convinced that it didn't pay to hire developers -- they were a PITA (always demanding weird things, never showing up before 10:30 am, never dressing properly for work, etc, etc). They always wanted raises and you have to track progress and negotiate with them on price every year. You have to pay benefits and if a person is on disability on maternity, you've got to do something about it. You constantly need to be reviewing CVs, interviewing and hiring. If you get someone really bad, you can't actually reasonably fire them for a long time. Etc, etc, etc. So he tried a few experiments with hiring from outsourcing companies (all of which were charging considerably more than any of us were getting paid, I will add)... and it wasn't a disaster, but it wasn't really any better. But the cherry on the cake was, as soon as the project was done, they fled and no amount of pleading could get those developers back again (as you can imagine). So the CEO realised that having a crack development team was definitely worth the effort and the company really transformed as a result. However, a lot of companies are still stuck in the mindset where it's best to have as few full time developers as possible.
- peteradio 8y ago
  Sorry I'm dense but what is the 6 month contract wink wink nudge nudge?
  - blihp 8y ago
    It's a 6 month engagement that renews in perpetuity. Mainly as a way to avoid having employer obligations.
    - protomyth 8y ago
      After the Microsoft lawsuit, those perpetual renewals pretty much dried up. Any company that still does it is taking a risk.
      - Foobar8568 8y ago
        Take a tour in Europe, France or Switzerland, I know some contractors who have been in the same client, if not team (through various reorg) for more than two decades. Myself,5y same client over a 7years period, each time in a different team or close to.
        madeofpalk 8y ago
        I've been doing this (not quite on the 5 year scale) in both UK and Australia.
        TeMPOraL 8y ago
        Wonder how long it'll last. Current government in Poland recently announced they're planning a crackdown on "permalancers", with a recent interview calling people regularly billing just one client "not true entrepreneurs", and therefore not entitled to privileges of sole proprietorship.
      - alteria 8y ago
        Now Microsoft only allows contractors for 18 months in a given 24 month period (i.e. mandatory 6 month cooling-off period).

To be fair, the OP was referring to all large outsourcing companies. There are a lot of outsourcing companies that charge well over the rate for a full time hire (they don't necessarily pay their employees that, but...) I worked briefly for one such "body shop" and I found that the company billed my time at a rate of about twice what they paid me. As far as I can tell, it tends to slot in between a full time employee and an independent consultant/contractor in terms of price. Why do companies pay this premium? For one, it may be because they have a budget for a "6 month project" (wink, wink, nudge, nudge) but not for a full time hire. Sometimes it's because they think that they'll be able to pick and choose the best developers from inside a large organisation (and sometimes it works out that way... almost never, but sometimes...) But really it's just a matter of being naive, I think. The company I used to work for (as an independent contractor... ahem...) went through a phase where the CEO was absolutely convinced that it didn't pay to hire developers -- they were a PITA (always demanding weird things, never showing up before 10:30 am, never dressing properly for work, etc, etc). They always wanted raises and you have to track progress and negotiate with them on price every year. You have to pay benefits and if a person is on disability on maternity, you've got to do something about it. You constantly need to be reviewing CVs, interviewing and hiring. If you get someone really bad, you can't actually reasonably fire them for a long time. Etc, etc, etc. So he tried a few experiments with hiring from outsourcing companies (all of which were charging considerably more than any of us were getting paid, I will add)... and it wasn't a disaster, but it wasn't really any better. But the cherry on the cake was, as soon as the project was done, they fled and no amount of pleading could get those developers back again (as you can imagine). So the CEO realised that having a crack development team was definitely worth the effort and the company really transformed as a result. However, a lot of companies are still stuck in the mindset where it's best to have as few full time developers as possible.

peteradio 8y ago
Sorry I'm dense but what is the 6 month contract wink wink nudge nudge?
- blihp 8y ago
  It's a 6 month engagement that renews in perpetuity. Mainly as a way to avoid having employer obligations.
  - protomyth 8y ago
    After the Microsoft lawsuit, those perpetual renewals pretty much dried up. Any company that still does it is taking a risk.
    - Foobar8568 8y ago
      Take a tour in Europe, France or Switzerland, I know some contractors who have been in the same client, if not team (through various reorg) for more than two decades. Myself,5y same client over a 7years period, each time in a different team or close to.
      - madeofpalk 8y ago
        I've been doing this (not quite on the 5 year scale) in both UK and Australia.
      - TeMPOraL 8y ago
        Wonder how long it'll last. Current government in Poland recently announced they're planning a crackdown on "permalancers", with a recent interview calling people regularly billing just one client "not true entrepreneurs", and therefore not entitled to privileges of sole proprietorship.
    - alteria 8y ago
      Now Microsoft only allows contractors for 18 months in a given 24 month period (i.e. mandatory 6 month cooling-off period).