What Am I Actually Paying For? A Reality Check on the Body Shop Model

AUTHOR

Laura Emrichová

Marketing Manager

Selling time might get you started, but it won’t get you far. This post breaks down why the body shop model fails clients, burns out engineers, and leaves companies stuck in a race for margin. We want to deliver true value. To our clients and engineers. That’s exactly why we built LARA.

The term "body shop" originally comes from the auto repair world, but over time it has taken on a different meaning in tech and consulting. It refers to companies that sell time and manpower rather than outcomes, placing engineers into client teams to fill roles with limited context and little long-term ownership.

The business model is used globally across industries. After a few surprise invoices and vague timesheets, many clients start asking the same question: “What am I actually paying for?” It's a familiar setup, but one that deserves a closer look.

Client Perspective

Let’s be honest: traditional IT outsourcing isn’t always the enemy. In the right context, it has its place.

It offers a fast track to specialized talent without the cost and complexity of hiring. Companies bring in remote professionals for short-term, clearly scoped projects, avoiding labor overhead and long recruitment cycles. With direct oversight, it allows for control of deliverables and predictable outcomes. For tactical, well-defined tasks, it can be efficient.

BUT, let’s not kid ourselves: it’s not a partnership. Too often, clients have little idea what they’re actually paying for or why so many manhours appear on the invoice. I took the time to dive deep into this topic in the “reviews” part of the internet. As one Reddit user put it, “The number of man hours we are being charged for seems exorbitant,”¹ with rates ranging from $180 to $320 per hour. Another added, “Neither of us knows how much the contract is worth until afterwards.”² And perhaps most telling of all: “They do provide value, but we are currently being charged over $2 million in man hours per year. This is to support 40 employees, one SQL server and about 5 VMWare server instances.” These models often blur the line between productivity and billing, leaving outcomes buried under timesheets. ¹

Is the number $2 million per year still in your mind? I know, I was stunned too.

So, how do you end up with a $2 million bill? When you hire consultants or outsourcing firms, you’re not just paying for hours worked. You're often told you're paying for specialized expertise, flexibility, and efficiency, but what you really get is a rotating cast of interchangeable staff, vague deliverables, and stacked invoices. Their rates often include overhead, gaps between projects, and time spent on non-billable work like admin or sales. Some even charge based on perceived value rather than effort. While that can make sense for high-impact projects, it also means costs can grow fast, especially when no one is questioning where all those hours are going.

For that kind of money, a company could fund an internal team, invest in platform improvements, run continuous training, and still have room left for an on-site espresso machine and a proper offsite or two.

Engineer Perspective

One of the biggest cracks in the outsourcing model shows up in the mindset of the engineers themselves. To be fair, these setups can offer exposure to different industries, fast-paced delivery environments, and a wide range of tools and frameworks. For some, that variety is valuable early in their careers. But the trade-offs quickly become clear.

As one developer put it, “Few devs have experience developing a product and taking care of it 2 or 3 years later. The difference shows in the type of code they do, the ownership and engagement they have.”³ When you treat delivery like a handoff, you optimize for speed, not sustainability. But when you are the one maintaining the system months or years later, every decision carries more weight. If a mistake in your code could be the reason your app breaks and wakes you up at 4 a.m., you start thinking differently. Every line matters more when you're the one who has to live with the consequences.

That long-term mindset is often missing in outsourced environments, where engineers are assigned narrow, repetitive tasks with little context. As one intern described it, “Most of the work here is repetitive, low-context, low-skill task work for clients.”³ Without continuity or investment in the product, there is little room to develop real ownership. Mentorship and growth also tend to fall by the wayside. “I tried to discuss my long-term career goals with my supervisor... he sort of brushed me off and made me feel weird for even bringing them up.”³ When output becomes the only metric that matters, engineers are treated as short-term resources, not long-term contributors.

Body Shop Company Perspective

At first glance, the body shop model seems like a straightforward way to start an IT business. You hire people, sell their time, and take a cut. Simple. In the early stages, it works. It generates revenue fast and gives you access to clients you might not land otherwise. But the cracks start showing as soon as you try to scale.

The whole business becomes a fight for margin. The more work you do for a client, the more discount they expect. And the more discount you give, the less money you make [obviously]. To stay profitable, many body shop firms quietly shift to selling juniors as seniors, pushing rates higher while cutting costs underneath. The work becomes a volume game, not a quality game.

And then there’s the feast and famine cycle. One month you're overbooked and working weekends, the next you're scrambling to fill benches and chasing contracts. Predictability disappears. Long-term planning becomes impossible. In the scramble to stay profitable, there's little room left for innovation, specialization, or even basic employee retention. Often times, it’s not that body shop companies don't want to offer more value. They're just stuck in a model that rewards short-term hustle over long-term thinking.

Eventually, you end up with a business that's difficult to grow, even harder to stabilize, and constantly at risk of being outpaced by firms with a product mindset and predictable revenue. It’s a model that might get you started, but it won’t take you very far.

Beyond Manhours: Labyrinth Labs Approach

Many companies operate like a body shop. They sell time. If they want to grow, they have to keep hiring. If a project ends and there’s no new one, they downsize. When the next deal lands, the hiring cycle starts again. It’s expensive, slow, and quality depends on who’s available at the moment.

We chose a different path.

You might ask, “How do you do it then, if you don’t charge for manhours? How’s that profitable?” Well, let me tell you how. With man-days, you pay for an hour. With Labyrinth Labs, you pay for the result.

What you’re paying for is LARA, our cloud-native platform that gets deployed in a matter of days. Yes, you’re paying a yearly subscription, billed monthly, just like your Spotify or Netflix. But in return, you get regular updates, full migration and optimization of your app into a cloud-native environment, and a stable foundation that does not need rebuilding every time.

"Why pay more for something that’s done faster?" Because speed is not a shortcut. It is a side effect of having built this platform over years of working closely with clients and solving the same problems again and again. Instead of reinventing the wheel, we have productized it.

We do not sell the time of our DevOps engineers. We sell the outcomes they have baked into LARA. What might take a traditional team four months to build from scratch, we deliver in three days. Not because we cut corners, but because we have already built the cornerstones.

No vague hour estimates. No overpromised timelines. Just a fixed price, a clear scope, and a platform that scales with you. Unlike just paying for manhours, this is a true partnership.

You’ve got Spotify. You’ve got Netflix. But do you have LARA? Add a subscription that actually grows your business.