The Eagle Blog

The IT Staffing Industry

The IT Staffing Industry is an interesting study for many reasons. What at first blush looks like a very simple business quickly gains in complexity when you look at how it really works.

As “middle men” in a transaction we have two types of clients … (a) the end client who buys our services and (b) the IT professional that we place into jobs, either full-time or on contract.

Within our end client community (a) we also have different types of buyers …
(i) The corporate buyer (purchasing, legal, HR) whose primary goals are to protect their corporation from risk and to obtain the best price.
(ii) There is the user community buyer represented in the IT staffing world by technology managers and their management teams.
(iii) In some client situations there are internal resource managers who interface with staffing agencies.
(iv) In certain client situations IT staffing companies will work through third party “aggregators” such as Vendor on premises, Vendor Managers etc.

ALL of the above buyers, and we staffing companies, have our own agendas and needs and very often they are not aligned!

The technology groups have project needs that will affect their business. Perhaps a new client interface being late could mean millions of dollars in lost business, if a financial compliance application is late it might mean fines or other punitive damages from regulatory bodies etc. In some client situations these demands will mean the client wants the very best candidate and that price is important, but a secondary consideration.

Purchasing will be very focused on providing savings for their organization, and still committed to obtaining quality … however price is key.

The legal people might be very focused on ensuring that the right contracts and extensive insurance coverage is in place.

The IT professionals want interesting work and want to be well paid. Some of them will view the budget as theirs and resent the agency “taking money out of their pocket”.

The IT Staffing Companies want to get access to orders and find great candidates at the best price they can, so they can make a reasonable living.

Add to this mix that the “product” in play is a human being and that no two human beings are the same, then you start to get a feel for some of the complexities in this business.

In the perfect scenario the client is focused on getting quality candidates inside a framework that ensures all of the corporate needs are met … good value and risk protection all covered through an efficient process. If the right framework is in place and the vendor community is comprised of reputable firms then this is very doable … resulting in a win-win environment.

The only way that I believe this scenario is achieved is through mutual respect and open communication. Certainly our industry in Canada has matured significantly in the last 10 to 15 years. There is good communication at the industry level and we work to earn the respect of both the client and contractor communities.

I have blogged previously about the value proposition that we bring to our clients, the contractors and the Canadian economy … and I am passionate about our place in Canada’s future. Particularly when we are faced with growing skills and labour shortages in the coming years.

I think that many people try to simplify our business and provide rigid control over the buying environment to the detriment of all concerned. IT Staffing companies operate on skinny bottom lines in a complex environment that is, as affected by the economy as any other. If we are to continue to provide value to the Canadian economy we need to continually educate clients, governments, contractors and anyone operating in our world about how it really works. A few words in a blog does not do this subject justice … but it’s a start!


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4 thoughts on “The IT Staffing Industry

  1. “Some of them will view the budget as theirs and resent the agency “taking money out of their pocket”.”

    “Resent” is the wrong word as it implies that personal feelings are involved. That is not the case.

    The IT consultant is running a business and, like any business, is trying to maximize his/her profits by negotiating the best possible deal from the staffing agency.

    As usual, the trick is not to be so greedy as to ruin the deal.

  2. “Some of them will view the budget as theirs and resent the agency “taking money out of their pocket”.”

    “Resent” is the wrong word as it implies that personal feelings are involved. That is not the case.

    The IT consultant is running a business and, like any business, is trying to maximize his/her profits by negotiating the best possible deal from the staffing agency.

    As usual, the trick is not to be so greedy as to ruin the deal.

  3. Good point and apologies for a poor choice of words. What I so ineloquently was trying to say is that the budget is to cover the cost of the contractor AND the cost of the agency … sorry!

    And agreed … a good business solution will leave all parties feeling good.

  4. Good point and apologies for a poor choice of words. What I so ineloquently was trying to say is that the budget is to cover the cost of the contractor AND the cost of the agency … sorry!

    And agreed … a good business solution will leave all parties feeling good.

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