How to negotiate a contract with an IT Staffing agency

June 12, 2023

Tags: IT Staff Augmentation

it staffing agency

Evaluating a service contract with an IT Staffing agency is important because it allows companies to ensure that they are getting the best value for their money. This evaluation should include a detailed review of the contract to ensure that all conditions are met and that the company is receiving the services it needs.


And it is not a minor issue: not reviewing the contract you make with an IT staffing agency well can generate an increase in costs due to unwanted services or services that are not necessary for your project. In addition, not being clear about the terms of the contract can lead to a decrease in the quality of the service. Also, it can lead to legal problems if one of the parties does not comply with the terms of the contract.


For these reasons, in this article we will talk in detail about how you can negotiate a contract with an IT staffing agency, so that the working conditions are clear and the stages of the software development cycle are fulfilled perfectly.


it staffing agency

Elements that a contract with an IT Staffing agency must have

A service contract with an IT Stafing agency is a legal document that establishes the conditions and obligations between a client and the software provider.


The objective of this contract is to define the scope, quality and cost of the services that the supplier offers to the contractor to support their projects or personnel needs. Read more about: IT Staffing: Should you hire a long or short term model?


The main elements that an IT Staff Augmentation service contract must have are the following:

  • Name of the person or contractor company
  • Name of the person or company responsible for offering the service or provider
  • Detailed description of the activities, tasks, functions and responsibilities that the supplier will carry out for the client, as well as the technical, professional and quality requirements that must be met.
  • Reason why the client needs IT Staff Augmentation services, either to fill a temporary vacancy, reinforce a work team, develop a specific project, etc.
  • Duration of the contract, specifying the start and end date, as well as possible extensions or renewals.
  • Payment in full for services, including applicable taxes and withholdings.
  • Forms of payment (terms or percentages): It is the way in which the contractor will pay the supplier for the services rendered, either in a single installment, in partial or monthly payments, based on progress or compliance with objectives, etc.
  • Confidentiality agreement: It is the commitment that both parties assume to protect and not disclose sensitive or privileged information that is shared or generated during the execution of the contract, as well as the sanctions in case of non-compliance.

it staffing agency

How to negotiate a contract with an IT Staffing agency

Although it may go without saying, it is common that many people do not consider the importance of preparing properly for any negotiation related to their contract. Just as one prepares for an interview, it is necessary to do some preliminary research and some preparatory work before meeting with the IT Staffing agency.


Take these aspects into account when negotiating a contract with an IT staffing agency:

Know the value proposition

Analyze the value proposition offered by the IT Staffing agency, ask the provider what makes its service unique, what are the benefits it brings to its clients, how it measures its success and how it compares with its competitors. Knowing all this will give you a basis for the rates that the provider proposes and the terms of the contract, they indicated in a LinkedIn article.


Research market conditions and terms

Before starting any negotiation with any IT Staffing agency, you should do your research on what are the market conditions and trends in the industry. With this information, you will be able to better evaluate any proposal that arrives at your table. Investigate what is the supply and demand of your product and service in the market, what are the average rates in the service industry that the agency will offer you. Also, read about the legal and ethical rules and regulations that will govern the contract. All of this will help you set realistic expectations of the contract and the project itself.

it staffing agency

Trust relationship

Although it is essential to define all the legal and logistical part in a contract with an IT staffing agency, it is also necessary to evaluate the relationship you have with the agency team. The goal is to cultivate a professional and positive relationship, where both parties feel appreciated and respected. This can be accomplished by practicing skills such as active listening, asking open-ended questions, showing empathy, finding common ground, and expressing appreciation.


Flexible and creative

You have to know that, during the negotiation of a contract with an IT staffing agency, you cannot be too rigid, neither party should be. “It is a process of finding a mutually beneficial solution, where both parties gain something and give something. You must be flexible and creative to explore different options and scenarios, and find ways to add value or reduce costs.

it staffing agency

Negotiating a contract with an IT staffing agency requires meticulous preparation and a solid understanding of market conditions and trends. It is essential to set realistic and fair expectations based on industry average rates and terms and relevant location. Furthermore, it is crucial to cultivate a positive and professional relationship with the agency, where both parties feel respected and valued.


Do you need a trusted IT staffing agency? At Rootstack, we have +12 years of experience supporting companies in their digital transformation. Contact us!


We recommend you this video