Selecting the right agency for nearshoring and outsourcing tech roles requires evaluating multiple variables. We have created a methodology based on different criteria that will serve as a guide for those who are in search of the best nearshoring or outsourcing tech agency.
This methodology provides a comprehensive framework for three aspects that are becoming increasingly important in the corporate world, especially in the U.S. and Canada:
- Evaluation of agencies
- Prioritization of operational efficiency
- Ethical considerations
The purpose of this article is to provide a structured and balanced way to assess and compare various outsourcing agencies across different tech roles. It serves to guide decision-makers in finding agencies that align with their technical, financial, and ethical requirements. Avoiding potential mistakes in the process of outsourcing tech roles.
Criteria for evaluating agencies for outsourcing tech roles
We use the following variables to create a scoring-based ranking system that evaluates the most important aspects of an outsourcing agency for a tech role in the U.S or Canada. Taking into account that the scoring metrics goes from 0 to 5 stars in each category.
Now we have the opportunity to delve deeper into each criterion. This deeper examination will allow you to understand the nuances and intricacies involved, providing a clearer picture of the underlying factors and their contributions to the final results.
1. Focused expertise in the area evaluated
A specialized outsourcing agency will likely have more in-depth knowledge and a network in a specific tech area, enhancing the quality and suitability of the talent pool. This focus provides assurance that the agency has the expertise and experience in the area of interest, thereby reducing risks and improving outcomes.
How it is evaluated:
- Dedicated Landing Page/Section for Technology: Evaluating if the agency has a specific landing page or section for the technology in question.
- Presence of Resumes/Candidates: In the absence of a technology-specific section, the search shifts to finding resumes or candidates on the website.
- Third-Party Reviews: If neither the specific section nor resumes are available, we rely on reviews from third-party sources.
Scoring Criteria:
2. Compensation transparency
Compensation transparency serves a dual purpose. On the ethical front, it aligns with the growing corporate responsibility to ensure fair labor practices. Knowing how much of the client's payment actually goes to the engineers fosters a sense of fairness and accountability.
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Beyond ethics, our experience in the industry has shown that transparency in compensation can significantly reduce engineering churn. Engineers who are aware of the financial breakdown are generally more committed and less likely to leave for another opportunity. This transparency enhances the ‘relationship stickiness’ between the client, the agency, and the outsourced talent, leading to more stable and long-lasting engagements.
How it is evaluated:
- Payment Distribution Transparency: Evaluating if the agency clearly indicates the percentage of payment received that is allocated to the candidate hired.
- Agency’s Revenue Share: Specific information provided by the agency about their cut from the total payment.
- Candidate’s Compensation Share: The proportion of the payment that goes towards the talent they employ.
Scoring Criteria:
3. Transparent pricing structure
Transparency in pricing is increasingly demanded by consumers across a range of industries, and the outsourcing tech sector is no exception. The traditional approach of requiring potential clients to engage in a sales cycle to discover pricing not only delays decision-making but also introduces a layer of uncertainty and mistrust.
Even more controversial are practices where agencies obtain information from potential clients to adjust pricing in real-time, aiming to extract the highest possible margin. This can be particularly damaging to the client-agency relationship, as it raises questions about integrity and fairness.
In contrast, transparent pricing helps build a relationship founded on trust and equality. It allows potential clients to quickly assess the affordability and value of an agency's services, promoting a more straightforward and respectful engagement process. Given these considerations, transparency in pricing plays a critical role in the ethical and effective operation of an outsourcing tech agency.
How it is evaluated:
- Cost Transparency for Tech Roles: Assessing if the tech agency explicitly details the costs for outsourcing specific tech roles or groups of tech roles.
- Clear Pricing Ranges: Checking if the agency provides clear cost ranges on their website.
- Percentage of Salary as Agency Fee: Whether the agency takes a fee based on a percentage of the salary, and if that percentage is 20% or less.
Scoring Criteria:
4. Contractual flexibility & transparency
Companies often want to know about the length and terms of potential contracts upfront. Transparency in these aspects allows for better planning and aligns with a company’s strategic and ethical considerations regarding long-term engagements and commitments.
How it is evaluated:
- Contractual Commitment Transparency: Reviewing if the agency clearly states the absence of minimum yearly commitments, NDAs, or MSAs before beginning work.
- Explicit No-commitment Policy: Checking for a direct statement regarding no required yearly commitments, NDAs, or MSAs.
- Transparency About Contractual Documents: The agency's openness about the need for NDAs, MSAs, or other commitments.
Scoring Criteria:
5. Regional time-zone expertise
Effective collaboration often hinges on synchronous communication. An agency that specializes in specific time zones is likely better adapted to the recruitment practices, work culture, and logistical challenges of those regions. This allows for smoother interactions and fosters a more productive working relationship.
How it is evaluated:
- Regional Specialization Transparency: Assessing if the agency specifies their focus on outsourcing or nearshoring tech talent within particular time zones.
- Specialization in PST to EST Time Zones: Verifying if the company highlights their specialization in time zones ranging from Pacific Standard Time (PST) to Eastern Standard Time (EST).
- Coverage of Additional Regions: Determining if the agency also caters to regions beyond PST to EST, including Latin America.
Scoring Criteria:
Exclusion from Analysis: Agencies that exclusively cover regions such as Africa, Eastern Europe, Asia, or India are not included in the analysis, as the focus is on companies based in the U.S. or Canada.
6. Size, validation and customer reviews
The size of an agency, along with its track record, often correlates with its capacity to deliver consistent quality. Larger agencies are generally better equipped to handle complex or multiple projects and can be more reliable when it comes to timelines and quality control.
Beyond the size, the presence of validation from well-known companies or players in the industry serves as a strong indicator of an agency's competence and credibility. Such endorsements can significantly reduce perceived risks and make the decision-making process easier for potential clients.
Customer reviews and testimonials further provide 'social proof' that speaks to the agency’s performance and customer satisfaction levels. Reviews can offer nuanced insights into an agency's strengths and weaknesses, helping potential clients make a more informed decision. In a marketplace crowded with options, validation and customer feedback serve as essential differentiators that can guide companies towards a trustworthy and capable outsourcing tech agency.
How it is evaluated:
- Reputation and Clientele Transparency: Evaluating the agency based on their online ratings, clientele, and availability of customer testimonials.
- High Online Ratings: Checking if the agency has a rating of more than 4.5 stars on platforms like TrustPilot or Glassdoor with over 50 reviews.
- Significant Clientele: Verifying whether the agency has at least one client with revenues of 100 million USD or more, mentioned on their site.
- Customer Testimonials: Looking for the presence of video or quoted testimonials from other companies on their website.
Scoring Criteria:
Additional Star Deductions: A TrustPilot or Glassdoor rating of less than 4 results in the loss of 1 additional star. Or missing any one of the factors results in a loss of 1 star per missing variable.
7. Transparent talent placement process
Companies want to avoid the ‘bait and switch’ where one set of talents is showcased during discussions but another is actually deployed. Transparency in the hiring process assures companies that they have control over who gets to work on their projects, aligning with ethical considerations around honest and transparent business practices.
How it is evaluated:
- Recruitment Process Transparency: Reviewing whether the company’s recruitment and placement processes are clearly outlined on their website.
- Detailed Recruitment and Placement Process: Investigating if the company provides a clear and detailed description of the steps involved in recruiting and placing tech candidates.
- Engineering Rotation Policy: Checking for a transparent explanation of the “Engineering rotation” policy, if applicable.
Scoring Criteria:
Final results for outsourcing tech roles agencies
The following is the result of the study after comparing 50 agencies with the criteria mentioned above, we present in the table the detailed information for the top 10 outsourcing agencies.
How agencies for outsourcing tech roles are screened
Step 1: We gather a list of the top agencies that appear on Google and Bing for the specific technology being measured and through a crawling process, a proprietary AI evaluation method, and an editorial navigation criteria, we select 50 agencies. Teilur Talent only evaluates agencies based on specific expertise and our scoring criteria does not evaluate agencies for general “outsourcing” searches.
Step 2: Based on how the companies scored, a list of the top 10 companies is put together for analysis by Teilur Talent’s editorial team.
Step 3: The CEO and Managing Editor for Teilur Talent, Juan David Rodriguez, a CFA charter holder and executive with over 10 years of experience working with technology companies in New York and Silicon Valley, creates a detailed analysis of each company with a description, a recap of the scoring, and an internal evaluation of pros and cons of the company. It’s important to take into consideration that Teilur Talent was created to disrupt the traditional model of outsourcing tech where compensation transparency has been kept secret by most major players, so in many cases, the ranking will include this aspect for Teilur Talent as an agency as well as for all other players in the space.
If your company is in this ranking and you feel that any aspect of the ranking should be re-evaluated, or you feel that your company was not taken into consideration, email us at editorial@teilur.com and we will review your submission.
