Conventional, also known as classical, outstaffing is an exemplary model, offering recruiting, onboarding, and employer of record services on your demand. Smart outstaffing additionally focuses on expertise and skills of hired professionals. The fundamental concept of outstaffing is that you have your dedicated team of professionals who are hired based on your needs and requirements. This team is focused on your project or projects only and operate from outstaffing company office where legal and all electronic appliances are taken care of. Many startups analyze the global employment market and utilize remote teams from countries with lower salaries and living costs. E.g., if the startup is American (or Western in general), its founders tend to hire personnel from Eastern or Central Europe, not from the USA.

Still, the main difference between those two concerns the project’s management. The global market size of outsourcing services including the outstaffing hiring model stands at about $88.9 billion in 2017. Outstaffing is one of the popular remote resource hiring models commonly adopted in the domain of information technology, especially in the software development, in the present day marketplace.

Pros and Cons of Outsourcing

To put it simply, outsourcing is delegating projects to a third-party company with the required resources, qualified team, and equipment. Yet, the primary task of outsourcing is the ability to use all resources to full-scale and take directions to introduce or develop the new focal business goals. Outstaffing involves a slightly different model of remote employment. In this partnership, the customer company hires specialists from a third-party organization to perform a project or specific services and tasks. Still, it takes over the distribution of functions and controls the work.

The client does not need to hire recruiters to search and select suitable resumes and conduct interviews and recruitment procedures. There is also no need to post vacancies, track responses, and close job offers. The contractor takes care of searching for suitable professionals and provides the employer with only the most relevant resumes for approval.

Outsourcing Disadvantages

In that case, they go to an outstaffing agency and hire their employee to be a part of their team until the project is done. The outstaffing model requires a clearly defined task and provides for a person who will perform it properly. The customer pays directly to the agency, which furtherly pays money to the employee. Typically, a specialist stays in his previous company but works on another project until it’s completely done.

• This remote hiring model consists of multiple individuals with different skills from the multiple locations across the globe.
• If you’re looking to scale your business and access a vast talent pool, both outstaffing and outsourcing can provide the necessary flexibility.
• This hiring option reduces the employing company’s costs for maintaining a large staff.
• It’s an arrangement that can work smoothly, but you must keep your HR department apprised of your outstaffing development plan and ensure the engagement rules are clearly defined.
• Outsourcing and outstaffing are two business strategies that involve hiring external resources to perform specific tasks.
• But your development partner will take care of everything you need.
• Outstaffing is a type of remote recruiting model in which a vendor provides a specialist or a group of professionals for a client’s project during the contract term.

Outsourcing helps companies that don’t have money, time or a reason to assemble their own in-house team of developers. Such services can be good for both short-term and prolonged cooperation, yielding a quality product. Outsourcing helpscompanies that don’t havemoney, time or reason to assemble their own in-house team of developers. Such services are good for both short-term or prolonged cooperation yielding a quality product. The outsourcing company can keep distance, handling the project on their own and reporting progress to you throughout the development cycle.

Key Challenges Associated with Outstaffing

The unique characteristic of an outsourcing IT model is that the development team members you choose will deal with every aspect of your project from design to testing. For this reason, we have created an analytical guide that explains what outsourcing and outstaffing is and what the main differences are between them. This article will also help you figure out which model best fits your business needs and how to find high-quality collaboration partners to outsource your IT projects. Perhaps the most obvious benefit of outstaffing is that it can save your company money.

She specializes in content and social media marketing and helps eCommerce companies and entrepreneurs reach more customers by creating engaging content with the best practices in SEO. Having worked with over 800 brands and influencers, Anastasia is experienced in creating effective campaigns for every type of industry in the market. Remember that, besides salary, culture, language, timezone, and reputation are equally crucial factors to consider when outsourcing. We have successfully replicated 370+ projects and continue to prove our clients’ trust. On the other hand, if you’re in need of someone who can work on an as-needed basis, however, outsourcing might be a better option.

Faster Project Execution

When you outsource, you have the option of hiring workers from different countries or states. This allows you to hire the best person for your job without being limited by location or availability. We help to estimate your project as accurately as possible, but you should understand that even in the most accurate measurements, there are errors. And even more so in development – details and nuances can emerge that were impossible to foresee. Companies use outsourcing to go through major transitions when there’s no definite picture of workload and no definite long-term plans.

They handle all the management of their team resources, with a client liaison that helps work with you on a business plan. If you’re looking to do the cost-plus model for outstaffing development, you’ll get more say over how your outstaff team members are paid, but you may see more ups and downs in your expenses. Startups don’t have extra money to pay employees for idleness or cover their insurance, taxes, and collateral expenses.

Here are the key steps involved in the outstaffing process:

The outstaffer company takes care of all the documentation, from the registration of vacations and sick leave to the writing of reports. This reduces the burden on the administrative department and accounting departments of the client company. However, this will not create too many problems for you if the outsourcing fulfills your project tasks and your requirements. These models play a significant role in organization development and the individual processes’ execution. For example, if you don’t have in-house tech expertise, outsourcing is the best way to go. But your development partner will take care of everything you need.

Outsourcing is when a customer orders turn-key services in an agency, transferring all the functions and processes to them. In other words, you attract the team from an agency and delegate to them certain projects of your company. In the area of information technology, such work may include the creation of a mobile or web application, product design, software development, business analytics, etc. In a “cost” outstaffing model, the client pays one flat fee to an IT services company to get a part- or full-time member for their company’s outstaff team. With that fee, the informational technology services company pays the team member’s salary, benefits, bonuses, equipment expenses, etc.

Outstaffing vs. Outsourcing: Avoid the Confusion

The speed of production will increase with the help of competent workers. Outsourcing company developers have vetted professionals in their field. You do not need to train them beforehand; they will be incorporated into your project immediately. In most cases, you will only interact with a project manager from the outsourcing team, whom you’ll provide your deadlines, updates, and requests. If you outsource a project to someone who isn’t invested in your company, they may not work as hard as they could or should. They might not understand your business goals and may miss important details that can make or break the final product.

In this model, the development team consists of both the onshore and offshore resources located at multiple locations across the globe. This is a very useful method of completing the project in a very short time span owing to the availability of resources round the clock without any breaks. It is also very useful for quick response to the requirement changes initiated by the customers. Hiring an outsource/outstaff employee is one of the most prudent decisions for increasing company efficiency costs. Contracting an in-house laborer commonly costs significantly more than an outside vendor.

Outsourcing VS Outstaffing – A Detailed Comparison

Moreover, you won’t have to manage the team, spend time on finding the right people, and get involved in the development processes. You can be sure of quality assurance and delivery before the bitbucket jenkins integration deadline. Moreover, the signed contract guarantees the security of your data. When the pandemic began, everyone was forced to face a new reality, in which a classic workflow was violated.