What Candidates Should Expect From IT Staffing Firms - Part II

At the beginning of the summer, I had Part I of this post where I asked the question "What do you look for when working with IT staffing firms?". My original topic was "What Candidates Should Expect from IT Staffing Firms" which has morphed into "What do you look for when working with these firms?"


Though I used to be a Project Manager, scope management was never a strength! However, I promise I will answer the "what you should expect" question at the end of this multi-post topic. Similarly, there are dozens of questions one might ask when choosing to deal with one firm vs. another. I will provide the "laundry list" in another post; the questions I have here are those I feel are most important.


Now, more than ever, a large number of folks are finding themselves working as part of the contingent work force, and are in unfamiliar territory. There are things that a traditional staff employee takes for granted when working as an full time employee (FTE) that don't always hold true when working for a staffing firm.


I polled my network of folks and consulted a few other sources and came up with a number of things. I will attempt to group related comments together:


ABOUT YOU:


Time to do some self assessment. Is it tough for you to walk into unfamiliar situations, or do you like the challenge of a new situation? Do you work best in a structured work environment in cubes, or are you happier in an open office environment in an old building somewhere downtown?


Think about yourself and your aptitudes to help structure your selection criteria:


What am I looking for in my next opportunity? How well does the staffing firm and this particular engagement align with what I want out of this experience?


Think about your goals for your next move. Are you just trying to get back working and generate income? Are you looking to get a foot in the door at the end client so you can hire on full time? Or, are you looking to extend and grow your career as a consultant?


In a soft economy like this one many folks are just looking to generate income, and are less concerned about career growth. Still, think about it and ask the relevant questions:

• "What is your policy for converting to FTE with the client?"
• "How can you help me grow my skills by working with your firm?"

If you are the type of individual that is selective about the nature of the work and the environment, the consulting world may not be for you. A large part of the success for an individual working in a consulting / staff augmentation position is their ability to work effectively within the client environment, to mold themselves into the work and the culture.


I found when I was consulting that I could learn something from every engagement. Even the most difficult environment, or the most mundane engagement also came with the opportunity to learn how to deal with a difficult manager, or how to effect change in an environment that was not receptive. At the very least, I found ways to lend value to the client organization regardless of the constraints and difficulties I faced.


I suggest you think about this as you move into consulting and staffing positions.


ABOUT THE FIRM:


There are hundreds of firms out there with all sorts of different opportunities. Go to Monster.com or DICE.com, and most of the positions will be from staffing firms. You will likely see multiple firms advertising the same position. Which one do you choose to work with?



Does the firm specialize in my area of expertise, or do they provide more general staffing? Regardless, how many engagements do they currently have doing what it is I do?


There are pros and con's associated with boutique or niche firms, and general IT staffing companies. A niche firm certainly is more familiar with individual market spaces and clients, and may be better equipped to get you into that perfect assignment. On the flip side, chances are a general IT staffing firm will have a broader reach and larger client base, and be able to reach areas that a niche firm can't.


The key is to ascertain how well the firm understands what you have to offer a potential client. The better the recruiter and sales person understands what you do, the more effectively they can look at opportunities and needs in the market place. Ask:

• "Can you describe the type of engagements you have today that are similar to what I am looking for?"
• "Can you connect me with one of your consultants who is doing this type of thing today?"

It's not so much what the answer is but how the company answers that will tell you a lot about the firm. Read between the lines: are you hearing the truth or fluff?


What is the firm's reputation in the market place with both clients and with consultants?


This is a key question. In central Ohio, there are probably at least one hundred IT staffing and consulting firms. Some are widely known, large national companies. Some are small firms that focus on a couple of clients or in a specific niche or industry. Most are reputable; some have questionable practices.


Regardless, ask people for recommendations and ideas on firms that are good to work with. If you are approached by a firm, do a little homework before committing to work with them. How can you check out the reputation of a particular firm?

• Leverage social networking tools such as LinkedIn and others to find people who have worked with a firm. LinkedIn is a great place to search. Find the sales people and recruiters for the firm, and see what others have to say about them. Find consultants that work for the firm and reach out to them via LinkedIn.
• Check with former colleagues or managers that have engaged the firm from the customer side to get direct insight.
• Ask the recruiter and sales people you talk to "How long have you been with the firm?". Look on LinkedIn or other social networking sites to look at the tenure of the internal staff of the firm. A firm with high turnover in their sales and / or recruiting staff is a warning sign. Even in today's world of "Vendor Management Systems", the success of a staffing or consulting company is still based in large part on the ability to build and maintain relationships with candidates and clients. A firm with high turnover, particularly in their sales staff, can not maintain relationships with customers.

Every firm claims to be professional, high end, and "just like the big firms". Some are, some are not. Some firms simply match candidates with clients, and handle payrolling and invoicing, but provide little additional support to clients or consultants.

How do I get paid and what are the benefits like?

Some firms offer salary and benefits; some only pay hourly with no benefits. The different types of arrangements include:

• W2 Salaried: You are a salaried employee, and get paid a fixed amount every time period (ex: $6,250 / month). The consulting / staffing firm takes care of payroll tax withholding, FICA, etc. There may or may not be compensation for hours in excess of the standard hours that are billed to the client.
• W2 Hourly: You get paid a set amount for every hour you bill the client (ex: $38.50 / hour). The consulting / staffing firm takes care of taxes and other withholding.
• Independent Contractor (IC): Sometimes referred to as a "1099 contractor". You are paid a set amount for every hour you bill the client. You are treated as an independent business entity by the consulting / staffing firm, and are responsible for all of your own tax reporting, and generally are required have general liability and other types of business insurance.

There are pro's and con's to each these, too much to go into here. For "rules of thumb":

• If you need health benefits, W2 Salary is generally your best bet. However, some firms offer health benefits with W2 Hourly. Ask.
• If the assignment duration is relatively short (<>
• If your goal is to be a long term, professional consultant, known as an expert or highly skilled in a specific market space, then take the time to get set up as an IC.

Regarding benefits, most reputable firms offer some form of health, dental, 401k, and other benefits to W2 salaried employees, and a few offer benefits to W2 hourly employees. However, some firms do not offer health insurance and other benefits at all! Be sure to ask!

IC's are not eligible for benefits such as health and 401k as they are independent business entities by definition. If you are looking at working as an IC through another firm or by marketing yourself direct to a client, then I strongly advise researching the subject and consulting a professional accountant / lawyer accustomed to dealing with IC's.

WHAT ABOUT THE ENGAGEMENT?

More about things to think about in my next post. This one is getting a bit lengthy!

Quick Update and Thoughts

Since my last post, business has picked up significantly. This seems somewhat at odds with the general trend in the economy, as layoffs are ongoing in many firms and financial results continue to suffer. This trend is impacting my company across the country, and seems to be consistent in the vast majority of regions.

What is happening here? Why are we seeing a rise in IT staffing positions when the media reports a very slow recovery? If a recovery is underway, why aren't companies hiring FTE?

My thoughts on this are that the cost of contingent labor has dropped to the point where the hourly loaded cost of full time employees and IT contractors is very comparable. Most large clients with formal procurement processes and Vendor Management groups have imposed rate reductions on their staffing supplers. Similarly the supply of skilled IT staff on the market has increased due to slowness in the economy. Conversely, few clients have been able to force a similar reduction in cost on their FTE's.

This has resulted in a very comparable hourly cost between contractors and FTE's. The advantage of contractors is that they can be hired and released quickly without worrying about costs for severance and such. This continues a trend that started some time ago where companies maintain a minimum level of staff to preserve core business knowledge and then use contractors for projects and initiatives that arise. Sort of like a general contractor outsourcing the carpentry work to another company on a building project.

The other oberservation is that I have never seen so much senior talent on the market. Clients seem to be focused on the 5 to 10 year technical professional that can be told what to do and left alone to do it. The demand for management talent in particular as waned. It is as if companies are leaving the technical staff alone to do the work in a self managed manner, and even when a "lead" position comes up, it usually entails the person also being a direct contributor.

This may be short sighted as individual contributors are notorious for shortcutting process and practices such as project management, requirements definition, etc. It is somewhat of a cycle: I expect we will see a rise in demand for Project Managers within the next year or so to fix the initiatives that have gone out of control.