WDDinc

We, at WDDinc, have a service offering that many of our clients enjoy deeply. The interesting part is that most of our clients didn’t know it was possible. We offer Retained Services to all of our clients. Essentially, retained services allow any client to use our services however they choose. They will have a minimum monthly allotment of hours they can use, and typically get a discounted rate. We also guarantee 24-48 hour response.

Many of our clients (and some others) have asked what is so different from this and staff augmentation. The answer: A LOT!

Staff augmentation services work as follows. The client will call their staffing vendor and say they need a contractor for a project. For this example, lets say a .NET developer. They staffing firm will scour the job boards searching for a person/candidate that fits the job description. They will send many resumes to the client for review (the scary part is most staffing companies never even interview the candidate), until the client feels comfortable with one and decides to move forward. The staffing company hires the candidate and works out a contract with the client at an hourly rate and a duration of time. The staffing company then contracts the candidate to the client at,  lets say $100 per hour for 12 months.

The problem that I see with this model is the risk associated with it on three fronts:

The first is that the candidate is typically poorly evaluated (if at all) by the staffing company. The staffing company hires the candidate as a W2 employee so that it can sell that they are providing their full time employees as a consultant to their client. When the project is complete, the contractor is typically laid off.

The second risk is on the client side. It is really more of a question of the value of the service. If the 12 month project the contractor is on contains enough work in their specialty (in this case .NET), things should be fine. Many times though, the client will have a few new projects pop up, or have a shift in the current project that get away from the core skills of the contractor. “We decided to add a new feature that will be in PHP.” Now the client has a contractor that has no ability to do the work, and are forced to get another contractor (and pay for it) to complete the project.

The third is that you are 100% reliant on a single contractor. If he/she is sick, you get no work done, regardless of a tight deadline. If he/she quits, you have to wait for the staffing company to recruit a new candidate (followed by a potential 2 week notice).

To me, there is a lot of risk with this model. Unless you can guarantee that the project will never shift, it might be risky.

Retained Services work a little bit differently and remove a lot of the risk for clients. When one of our clients signs up for retained services, they have access to all of my staff. Using the same terms from the staff augmentation example above, the client will sign a 12 month retained services contract with us at a rate of $100 per hour, with a minimum of 160 hrs per month (40 hrs/week). Our clients can use our .NET developers, PHP developers, Java Developers, etc any way they choose. They can use multiple resources and go above the 160 hrs per month, and don’t have to pay overtime! If a projects shifts scope, our clients can call us and say “I need a PHP resource for 2 days.” We truly become a software development partner for our clients, a true extension of their business.

If any of our staff takes a few days off due to illness, or even decide to leave the company, we can immediately deploy one of our other staff members. You don’t have to wait. Your timelines stay intact.

One of our clients has approximately 40 projects on the table, all of which are fairly small and require approximately 10 different technology skills to complete them. This would be a staff augmentation nightmare. Staffing companies don’t like the headache of  recruiting potentially 10 different people for this many three day to 10 day projects. It cost more money to find the contractors than the profit made. With our retained services, the recruiting costs are non-existent. We already have the staff to deploy.

From a client perspective, we feel it makes more sense to call a vendor and say “we have 40 small projects in many different technologies, can you help?” and have your vendor say “sure, can we start tomorrow?”