Technical Recruitment Leftovers – Outsourcing IT Resources

The quality of your technical resource is significantly dependent upon the number of layers receiving percentage cuts (e.g. Vendor Management System, Implementation Partner, Recruitment Agencies (typically off shore), etc.).  See example table.

The technical quality of any resource is DIRECTLY proportionate to the number of layers between you and a technical candidate.

Technical Recruitment Procurement Process (High Level)

“The technical quality of any resource is directly proportionate to the number of layers between you and your candidate.” Shawn May

These days, businesses use vendor management systems (VMS).  These are sometimes referred as contingent workforce services. Business units (BUs) post their resource (or contract) procurement requests to these VMS.  VMS systems, or companies, charge (or bill) percentages based on their services. These service might include full resource management (end to end).  Charges are sometimes passed to both the client and their servicing Tier 1 vendors.

Tier 1 vendors, or implementation partners, obtain or capture these business resource requests (or requirements) from the VMS. Sometimes these resource requests are sent directly from a manager.  Important note, these tier 1 vendors maintain a fairly standard markup percentage for their services in locating technical resources – typically receive an hourly percentage.  Tier 1 vendors (typically many) employ one or many recruitment agencies (aka 3rd Parties) to locate qualified technical candidates.

Once 3rd party recruitment agencies obtain this resource request, they immediately go to work by literally FLOODING the market searching for qualified technical candidates: job-board-postings (Dice, Monster, Indeed, etc.), emails, phone calls, etc. These 3rd party recruitment agencies aggressively search and contact candidates who possibly, even remotely, match the job description (or resource procurement request).  These agencies likewise employ other 3rd parties to locate potential candidates.  Nearly all 3rd party recruiting agencies are located off shore.

It isn’t uncommon to receive 20-30 emails or phone calls concerning a single project or resource request.

It’s important to grasp the following details:

• Each layer (or player) attempts to maximize their profits through obtaining technical resources at the lowest cost possible (if you’ve ever spoken to one of these recruiters, you’ve possibly heard the trite question: “what’s your best rate?”  What they’re actually asking is, “what is your lowest or worst rate?”)
• Very few Tier 1 or recruiting agencies have any technical skills to properly adjudicate the technical aptitude and interpersonal relationship skills of a candidate
• The customer (i.e. original project owners, or technical leads):
  • is typically RESTRICTED to their business-elected VMS system and/or processes
  • is typically PRESENTED with a number of unqualified candidates
  • is seldom EXPOSED to the TRULY qualified candidates

Why aren’t you seeing these qualified candidates?  Frankly – your qualified candidates are far above, or outside, the rate or percentage range of the chains of 3rd Party recruiting companies.

This hopefully provides a cursory glance at this self debilitating industry.

Who actually suffers?  Regrettable, the customer.

Recommendation: Seek to eliminate the middlemen.

Example of Leftovers:

The following (high level) example ought to provide sufficient details to think with.  However I really wanted to avoid a deep dive into the various complexities (for example the difference between 1099, Corp to Corp, W2, etc.)

• Customer Resource Title: Senior Security Architect
• Technical Resource Budget = $300,000
• Customer’s proposed Hourly Rate: $144.23
• Duration: 52 Weeks | Weekly Hours: 40hrs | Daily Hours: 8

Note: This does not include taxes & other built-in fees and details (e.g. background / drug checks, etc.)

Standard industry rates for seasoned Senior Security Architects, with a CISSP, range between $110/hr – $145/hr.

Although the above layers will vary, you can immediately reason that:

1. Tier 1 and recruiting agencies will submit resources (or candidates) far below industry rates
2. The Interviewing and selection process takes far longer than anticipated because:
   • • The majority of submitted candidates are not qualified – taxing internal resources
     • The majority of qualified candidates will and do not take projects at such debased rates – you will never see their resumes

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