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Making the Team: Selecting the best staffing solutions for your DevOps team
As you start or continue your DevOps journey, you may face a number of hiring choices when building out your team. Should you hire a full-time employee, contract out the work as projects come up, hire a consultant, or even offshore the work?
According to GlassDoor, DevOps Engineer is the #4 job for 2022. While having high-demand skills and thousands of open positions is great news for job seekers, it can make it more difficult for employers to recruit and hire top talent. After all, most organizations cannot compete with the MANGA (Meta-Amazon-Netflix-Google-Apple) companies on compensation alone.
Let’s examine a few of the hiring choices:
When you hire a DevOps professional as an employee, you will report their wages and compensation on a W-2. According to Built In, the average total compensation for a DevOps Engineer in the US is $141,325. This is the unloaded rate before payroll taxes and benefits; depending on the location of the job or employee and the individual’s experience level, this can be higher. You will provide their hardware and software and provide benefits such as PTO and health insurance. Some of those benefits are required by law; others you may offer to make your organization more competitive as an employer.
You can search for a full-time employee on your own, with job postings on your website and national and local job sites such as Indeed, LinkedIn, or Built in. You may also choose to work with a tech recruiter who will screen and propose candidates after meeting with you to determine your requirements for skills, culture fit, budget, and other requirements.
Compared to other staffing options, you have the most control over how W-2 employees complete their work. You can manage their time, provide the tools to complete their job, and train them for your environment and needs.
1099 Independent Contractors
Between the Great Resignation and the proliferation of the gig economy, workers across industries may provide services on a 1099 contract basis to either gain more control over the hours they work or augment another job’s income. Examples of marketplaces that help connect independent contractors and companies are UpWork and Fiverr. The marketplaces charge a percentage fee to freelancers.
Unlike W-2 employees, independent contractors are responsible for paying self-employment taxes of 15.3%, including Medicare and Social Security, plus regular income tax. If you’re comparing different hourly rates for contractors, it’s a good rule of thumb to estimate that 25% of their rate is going towards taxes. Increased risk for the employee, including varying pay, the unemployed time between gigs, having to purchase individual health insurance, marketplace fees, and self-employment taxes, are reasons that independent contractors’ hourly rates will be higher than the unloaded computed hourly rate salaried employees.
Unlike W-2 employees, independent contractors control how they perform their work. You contract with them for a specific work product but do not manage their time. Depending on the scenario, they may have little to no interaction with your other employees and are not integrated into the company culture.
Staffing Agencies, Contract-to-Hire
Even MANGA companies leverage tech contractors to fulfill 40-50% of their workforce. The workers are generally full-time (W2) employees of the staffing agency. It is the responsibility of the staffing company to recruit, hire, pay, and provide benefits to their employees.
This is a great option when you need skilled engineers quickly or for limited duration projects, without taking on the high costs of candidate search or having to let them go at the end of an assignment. The staffing agency also ensures they follow applicable employment laws for their employees.
One thing to keep in mind is that the difference in how some companies treat contractors can create inequitable working conditions. Unequal treatment and a “revolving door” of short-term employees can negatively affect company culture.
In this scenario, you contract with a company specializing in DevOps best practices and skills. Like staffing agencies, the consultant company is responsible for locating, hiring, and paying the staff. For example, you might hire a consultant for the rollout, training, and adoption of a new CI/CD tool. Because the consultants offer deep expertise, they can reduce the time needed for your organization to start realizing benefits. Some DevOps consultants offer short- and mid-term staffing augmentation, while others will allow one or two of your employees to work alongside the consultant during the job; those employees can then train the rest of your staff in the new tool or process.
Check with your legal and HR professionals
Hiring decisions are complex, and laws vary from one location to another.
This post is an introduction to different staffing choices but is not a substitute for legal or tax advice. Always check that you are complying with the latest laws. For example, the state of Colorado and the city of New York have recent pay transparency laws.
There are also tests to determine whether you can accurately classify workers as employees or independent contractors. The Protecting the Right to Organize Act (PRO Act) has not yet passed but would allow contractors to unionize.
I need help YESTERDAY!
At ReleaseTEAM, we provide both Staff Mentoring and Staff Augmentation programs to help you solve immediate resource needs, fill gaps until you scale your team, and supplement your existing team’s skills. We are not a staffing or recruiting agency but an Independent DevOps Consultancy with over 20 years in the business, offering our expertise to you. Use the seasoned knowledge of our consultants to your advantage! Our consultants are knowledgeable, self-motivated professionals; many hold a security clearance.
Schedule a Meeting to see how our consultants can augment your team!