I wonder how some agencies work, such as Teksystems or Red Oak or Robert Half. Do they take $1M from Apple or Google or Facebook, and provide them 4 senior software engineers? This way, they take in $250k per person, but pay the engineer $85 x 1880 (47 work weeks x 40 hours), so. that is 250k - 160k, and minus $10k costs (FICA, paperwork), then the agency can pocket $80k per year per person. Is that how it works? TC: 200k
Usually the bill rate for a vendor company is ~3x what the employee is earning. This covers bench time, benefits, building costs if they have an office, salaries for their leadership, profit, and building a reserve to ride out the occasional dry spell.
It's never 3x more, unless the labor is from Ukraine or South America
I worked with vendors who don't have bench, they still took 40%
Let alone the quality of these so called “senior engineers” are subpar. I am working with a group of people from Accenture and it’s a nightmare.
it really depends... I worked for Apple as a contractor before. The FTE did one page that was close to the simplest of all the pages, and then asked the contractors to do the remaining 98% of components and pages. The FTE just sat there, saying, oh these kind of things should not go into the code, but should go into a wiki. How difficult is that? While us contractors were involved with building reusable components using a hardcore MVC JavaScript framework, there was an FTE involved with all the buttons sizing and colors. Wow, I guess he must be a superhero.
It depends, but usually it is an hourly rate and a hourly cut, Ranging between 20-40%. The top companies don't use any of these sub par engineers, it is usually the non tech companies which use them.
well, first of all, I don't think you can call them subpar. That's derogative. Second, even Apple, Google, Facebook use them, and FYI, I have seen the FTE do 5% or 10% of the work, and let the contractors do the remaining 90%. The devil is in the details, you know. Why don't I do 5% of the work and let you do 95%, and then call you inferior?
So if you opened up an agency, hire 4 people and send them to clients, then you take $1M, and give them about $160k for each person, which is a total of $640k. Then if you are lucky, you just sit there for the rest of the year, taking in $360k. That's better than a software engineering job, isn't it.
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Standard cut for those agencies ( in case of Cisco we call them prime vendors) is 30 - 40 %, however they keep the actual pay hush hush, so they can even get away with more.