Outsourcing tech roles: Criteria for choosing the best agency

Published on
Feb 27, 2024
Written by
Maria del Mar Agudelo
EDITED by
Juan David Rodríguez
Read time
8 Minutes
Category
Transparency Research

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.

Criterion Description
Focused Expertise in the Area Evaluated Specialization and experience of the agency in a specific tech area.
Compensation Transparency Transparency in how much of the client's payment goes to the engineers, promoting fair labor practices and reducing turnover.
Transparent Pricing Structure Demand for clear pricing in consumer industries, including tech outsourcing.
Contractual Flexibility & Transparency Companies value understanding the length and terms of contracts for better planning and alignment with strategic considerations.
Regional Time-zone Expertise Agencies specializing in specific time zones can provide smoother interactions and more productive relationships.
Size, Validation, and Customer Reviews The size of an agency and its industry endorsements correlate with its ability to deliver consistent quality and reliability.
Transparent Talent Placement Process Transparency in hiring assures companies control over who works on their projects.

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:

⭐⭐⭐⭐⭐ Presence of both a dedicated landing page and examples of resumes or candidates.
⭐⭐⭐⭐ Finding either a landing page without resumes or resumes without a landing page.
⭐⭐⭐ No relevant information on the website, but positive reviews on external sites about the agency's talent in the technology.
⭐⭐ Inability to find relevant information about the company or if the available information is scarce.

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.

compensation transparency

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:

⭐⭐⭐⭐⭐ Agency explicitly states their compensation structure, such as keeping 10% and passing on the remaining 90% to the talent.
Comprehensive information about pricing transparency is found on reputable platforms, like industry-specific forums or review sites.
0 Stars: No information found regarding compensation transparency either on the company's website or through external reviews.

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:

⭐⭐⭐⭐⭐ Clear cost ranges are stated or a fee is 20% or less of the salary.
⭐⭐⭐⭐ An hourly rate range is provided, where the higher rate is not more than 50% above the lower rate.
⭐⭐⭐ A broad range of hourly or monthly rates is given (variation of 50% or more).
No pricing information is mentioned, requiring customers to inquire directly for costs.

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:

⭐⭐⭐⭐⭐ Clear mention on their website of no required minimum yearly commitments, NDAs, or MSAs.
⭐⭐⭐ Transparency about NDAs, MSAs, or other commitments is present on the website.
No explicit information on engagement types; a call with a salesperson is necessary to understand contract mechanics.

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:

⭐⭐⭐⭐⭐ Agency states specialization in providing tech talent in time zones from PST to EST.
⭐⭐⭐⭐ Agency indicates coverage that includes regions like Latin America in addition to PST to EST.
No mention of specializing in a specific region or time zone.

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:

⭐⭐⭐⭐⭐ Meets all the above factors high online ratings, significant clientele, and customer testimonials.
None of the above factors are present.

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:

⭐⭐⭐⭐⭐ Clear description of the recruitment and placement process, with a guarantee of working with the hired tech candidate.
⭐⭐⭐⭐ Transparent statement about their "Engineering rotation" process on their website.
⭐⭐⭐-⭐ No clear information provided on how candidate assignment or interviews are managed.

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.

Top 10 outsourcing agencies.
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. 

Need help with cost expectations? 

Costs vary depending on the final offer our candidate accepts. 80% of what you pay goes to the candidate, and the remaining 20% is our fee. We’ve put together some examples of price ranges with all fees included, to help you establish clear pricing expectations for the services we offer.

Pillars
Colombia
Argentina
Mexico
Brazil
Group 1. Coordinators, data analysts, tech sales

$1,500 - $2,000

$1,500 - $2,000

Group 2. Product, designers, growth marketers

$2,000 - $3,500

$2,000 - $3,500

Group 3. Developers and Sr. tech talent (4+ years)

$3,500- $5,000

$3,500- $5,000

Group 4. Sr. software & data engineering (7+ years)

$5,500- $8,500

$5,500- $8,500

1:1 recruiting support

via integration

Talent focus
Pillars
Colombia
Argentina
Mexico
Brazil
Group 1. Coordinators, data analysts, tech sales

$18,000 -$24,000

$18,000 -$24,000

Group 2. Product, designers, growth marketers

$24,000 -$42,000

$24,000 -$42,000

Group 3. Developers and Sr. tech talent (4+ years)

$42,000-$66,000

$42,000-$66,000

Group 4. Sr. software & data engineering (7+ years)

$66,000-$102,000

$66,000-$102,000

1:1 recruiting support

via integration

Talent focus

*Transparent pricing refers to understanding how much a company takes as a percentage of how much a client pays for hired talent. These prices are estimates and always depend on the final offer the candidate takes.

Need help with cost expectations?

Our hiring costs vary depending on the candidate's accepted offer. Use our calculator to estimate costs for different roles.

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At Teilur, Inc, we are committed to accuracy and fairness in all our content. Our discussions and comparisons, particularly those concerning other businesses in the recruitment industry, are grounded in the best interpretations made by our dedicated staff, based on publicly available information. We hold a deep respect for the unique qualities of each organization within our field and strive to offer valuable insights rooted in our core beliefs about the recruitment industry's workings. If you encounter any factual inaccuracies in our content, we encourage you to reach out to us at content-research@teilurtalent.com with the specific URL in question. Your feedback is invaluable, and we are committed to reviewing and addressing your concerns.

Got questions? We've got answers.

1

How is Teilur Talent different from other tech recruiting companies in LATAM?

At Teilur Talent, we take a mission-focused approach to recruiting, ensuring that our candidates are aligned with your company's vision and goals. Unlike other tech recruiting companies in LATAM, who may focus solely on technical skills, we prioritize the cultural fit and dedication of our team members to your company. For this reason, we do not support project contractor or freelancer roles. Instead, we focus on fully devoted team members who will help you achieve long-term success. If you are looking for freelancers to complete one-off projects, you probably are better off going to companies like fiver.com, toptal.com or upwork.com.

2

How does Teilur Talent attract and retain the best talent compared to other companies?

At Teilur Talent, we offer our candidates competitive salaries that are 2x to 3x higher than what tech companies would pay locally. This allows us to attract top talent and retain highly motivated and loyal team members. Additionally, we focus on finding candidates whose values align with the purpose, visoin, and mission of our clients. This approach ensures that our engineers and tech talent are not just coding and completing task—rather, they become part of a greater purpose, which gives them meaning and helps us attract and retain the best talent.

3

What are the typical tech roles that Teilur Talent recruits for?

At Teilur Talent, we specialize in recruiting for a wide range of tech roles that are typically in high demand. These include positions such as DevOps engineers, QA analysts and engineers, back-end and front-end developers, data scientists, product managers, business developers, and technical sales positions. Essentially, we recruit for most roles that are needed in B2B and B2C tech-focused businesses.

4

What are Teilur Talent's fees and pricing structure?

At Teilur Talent, we believe in transparency. We charge a flat rate fee of 20% of what the client pays. This way, our clients know exactly what they are paying for and how much the candidate gets. As an example: If a client hires a software engineer for $60,000 per year ($5,000 per month), Teilur's monthly fee would be $1,000 (20% of $5,000). We don't believe in hidden fees or unwanted surprises, so we disclose all costs upfront to both candidates hired and companies. When exploring other alternatives, make sure they are transparent about their pricing. We believe this is paramount for the benefit of all parties involved in this new era of remote work.

5

What is the candidate screening process at Teilur Talent, and how do you ensure a good fit for my company?

At Teilur Talent, we take candidate screening very seriously. We use a multi-layered approach to find the best candidates for our clients, starting with screening thousands of candidates from our internal and proprietary networks. We leverage AI technology to assess whether a candidate matches the technical skills required for a given job opening. We also perform additional personal evaluations to ensure that the candidate has the soft skills, culture fit, and English language skills required to excel in their new role. Our rigorous screening process ensures that only the best candidates make it through to our clients, saving them time and helping them find the best talent for their teams.