Body shopping, sometimes spelled as one word (bodyshopping), is an IT-centric outsourcing / sub-contracting model. A body shop (more formally known as an IT services provider or consultancy) recruits and retains a staff and contracts those employees out to other companies.
A body shop may train employees, recruit from the existing workforce or combine the two approaches; employees may work remotely from the body shop or onsite at the client's location. Recruitment and training are focused on current industry needs and anticipated near-future trends to meet client requirements.
Body shops typically pay employees a salary and also pay for any training they provide, factoring those and other human resources-related costs into their revenue models to ensure an acceptable return on investment (ROI).
The company’s profit comes from the higher rates that they charge clients. A project manager, for example, might be subcontracted out for $1,000 a day and earn $85,000 a year. The time while the employee is working for a client are billable hours, and the amount charged clients must cover the employee’s salary as well as other business costs.