When it comes to fulfilling software development needs, companies often struggle with finding the most time- and cost-efficient solution. One prominent strategy is team leasing - a practice allowing businesses to quickly augment their workforce at a reasonable cost. In this in-depth exploration, we'll dive into the concept of team leasing in IT, dissect its advantages and disadvantages, and explore potential alternatives.
Understanding Team Leasing in IT
Team leasing, also known as body leasing, refers to the procurement of temporary employees through leasing providers. This practice involves hiring a single worker or an entire team from a leasing agency, responsible for a variety of roles, ranging from QA software testers to senior developers.
The leasing agency remains accountable for the legal aspects of the partnership and administrative tasks such as payroll, accounting, and procurements. This strategy can be a boon for small and medium-sized enterprises, providing a cost-effective and swift alternative to hiring full-time, on-premises programmers.
However, team leasing is not without its challenges, which we'll explore in the next sections.
The Mechanism of Team Leasing
The process of team leasing begins with identifying the need to hire individuals with relevant engineering expertise. Following this, businesses conduct research on countries with the most substantial IT talent pool and analyze local labor markets.
The next step involves choosing a provider that offers the most attractive team leasing offer and can help in offshoring leased staff. Once a contract is signed, the leased staff are integrated into the workforce.
While this may seem like a straightforward process, the termination of cooperation with the leasing vendor can be fraught with challenges. This includes extensive paperwork, negotiations to transfer ownership rights, and additional expenses to buy out leased developers and officially employ them.
Pros and Cons of Team Leasing
Like any staffing solution, team leasing comes with its own set of benefits and drawbacks. Let's begin with the positive aspects.
Perks of Team Leasing
Flexibility: Team leasing offers the ability to easily adjust your team size, either by expanding or reducing it based on the project needs.
Speed: With a leased team, you can achieve faster results as you can quickly onboard new skills provided by the leasing vendor.
Delegation of Responsibility: Legal services and administrative operations can be outsourced to the vendor, letting you focus on the core business functions.
Drawbacks of Team Leasing
Indifferent Teams: Leased employees may not develop as much loyalty as in-house or offshore specialists.
Potential for Substitution: If you're unsatisfied with the quality of services, you may feel the need to substitute leased developers, which can lead to delays and additional costs.
Training Costs: Despite their skills, you may still need to invest time and money in training the leased team to align them with your business requirements.
Challenges in the Team Leasing Model
Using a team leasing model for software development can pose several difficulties:
Risk of Losing Internal Expertise
Working with leased software engineers over an extended period can lead to a decrease in your company's internal expertise as they become more reliant on external resources.
Team leasing involves salary payments to temporary programmers, service fees to the leasing agency, and potential costs for employee training and buyouts.
Intellectual Property (IP) Rights Issues
Given that the leased team will be developing your product, they may end up owning the IP rights. To avoid this, it's crucial to specify the transfer of IP rights to your company in the contract.
Team Leasing vs. Outsourcing
While team leasing involves leasing a developer or a team from a provider, outsourcing is a cooperation model that allows you to delegate the entire development process of your product to an external provider. Both models have their own pros and cons, and it's essential to weigh them carefully before making a decision.
Exploring Alternatives to Team Leasing
If team leasing or software outsourcing doesn't fit your expectations, you might consider hiring foreign developers through a reliable IT recruitment agency. Companies such as Alcor and Mobilunity provide a comprehensive range of services, from recruitment to administrative support, which can help you minimize the risks associated with offshoring and outsourcing.
While team leasing offers benefits such as flexibility, speed, and delegated responsibility, it also comes with its fair share of risks and challenges. Therefore, IT executives often look for more secure alternatives such as hiring developers abroad, leading them to negotiate with top recruitment agencies.
The decision to go for team leasing, outsourcing, or hiring abroad will depend on your individual business needs, resources, and risk appetite. We are always here to give you better advice for your needs.