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Outsourcing vs Outstaffing: What’s the Difference, Advantages & Disadvantages


You will communicate with your auxiliary team directly, distributing tasks and managing them day-to-day. The 2020 Deloitte Global Outsourcing Survey, businesses choose to outsource to reduce costs. Clutch’s report shows that businesses also outsource to increase efficiency (24%) or acquire expert assistance (18%). PWC claims that, on average, outsource payroll saves 18% more than in-house staffing. Outsourcing and outstaffing are both beneficial for businesses. Anyone looking for a long-term solution to their staffing needs, however, should consider outstaffing.

what is outstaffing

When you outstaff, the vendors you choose are tied to your company’s work similarly to a full or part-time employee, so you have to stick with your resources. The flexibility that outsourcing offers can be a key deciding point for many clients. Sometimes, when deciding between outsource or outstaff, outsourcing will be the clear winner. Under this model, you pay for your outstaff team member’s salary, buy their computer equipment, pay bonuses and overtime, and cost benefits. You don’t do this directly, as the outstaff team member is still an employee of your IT outstaffing provider. The benefit is that you always know the exact amount you will pay monthly, and you’re spared the management hassles of administrating your outstaff team.

Faster Project Execution

It means contracting out the whole project, not just to help with some particular tasks. According to the National Outsourcing Association survey, cost savings (35%) and improving customers’ experience (23%) are the top reasons why companies choose to outsource. Companies are forced to make that choice every time they need to build projects or implement a new feature. BramblingTech comprises designers, IT specialists, marketing specialists, and content managers.

what is outstaffing

If you compare local vs remote web development, the latter is much cheaper due to no tax and office-related expenses. Remote full-time workers have the highest rate of job satisfaction. If you are satisfied with the choice of developers, you could enter into further discussion of the process, security, liabilities, as well as any other legal details. As these issues are talked through, it would be best to have them in a written form to avoid misunderstandings. Are an asset to the existing team, expanding its expertise and possibilities.

What Would Be the Best for You – IT Outsourcing or IT Outstaffing?

To help you understand the differences between the two models, we’ve prepared a comparison table. First, you don’t have to waste resources hand-picking a professional to work for you. Second, by outsourcing business processes, you can focus on saving time to run your business with less distractions. The service provider works on the project, requiring minimal effort from your side. Maintaining a business means constantly searching for talent and opportunities. While opportunities occur through effort and chance, talent seeking is a task one can manage.

  • Anyway, to outstaff the external specialists is a cost-effective way for a company to find skilled professionals for long-term employment needs.
  • This could be an Upwork, Fiverr, or ProductHunt recognition.
  • They coordinate resources between all the IT talent working on your project, from your internal staff to their outsourced team.
  • It allows creating your own departments nearshore by hiring talented staff.
  • This can help with productivity and communication among employees while also providing better customer service since everyone is working together towards a common goal.
  • First, you don’t have to waste resources hand-picking a professional to work for you.

Outstaffing is a great way to get started with freelancing. It’s a simple process – you find a project that you’re interested in, submit your proposal, and if the client in likes what they see, they’ll hire you. Outstaffing also gives you the opportunity to work with clients from all over the world. Whether you choose outsourcing or outstaffing, will entirely depend on the purpose you are planning to hire extra personnel. In that case, the company will most likely want to hire locals to coordinate their services without incurring additional office costs.

Outsourcing vs. Outstaffing Models: What is the Difference and Their Pros & Cons

Many businesses have turned to the outstaffing model over the years, and these are their primary motivations. While remote specialists might be working from other countries and in different time zones, it’s important to set up effective interaction between every member of the extended team. It goes without saying that everyone has to speak the same language, e.g., English. Whereas the outstaffing agency handles all the HR and administrative aspects, you can focus solely on your project without distraction. They won’t be working on any other projects, focusing solely on the tasks you give them. Day-to-day communication, task distribution, and the general success of the project will be in your hands.

Outstaffing is a remote employment agreement in which a third-party business provides qualified professionals to another business. Unlike outsourced specialists who work on a project basis, outstaffed professionals can, for example, work as part of the hiring company’s software development team. However, their employment and administrative responsibilities are handled by the third-party recruitment agency that pays their salary and bonuses. These professionals typically perform various tasks, including software development, graphic design, accounting, and customer service.

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For businesses that require specialized skills or expertise not available in-house, outstaffing can be a viable option. Outstaffing is a business model that is gaining popularity among companies of all sizes. The concept involves hiring a team of professionals who work on projects remotely, and the company that hires them does not have to provide office space or equipment.

what is outstaffing

The choice of model depends on the tasks and requests of your company. This article will help you understand the pros and cons of outsourcing vs. outstaffing and identify these two models’ main goals and capabilities. There are two ways to get work done for your business outstaffing and outsourcing. Outstaffing is when you hire a company or individual to do work for you on-site, in your office.

Types of Outstaffing Services and Remote Web Development

The client can administer and manage a “rented” team or specialist. The vendor selects and hires employees, deals with the legal aspects of cooperation, and pays salaries. Finding an outstaffing company is much easier and more accessible.

what is outstaffing

Typically, European outstaffing agencies are cheaper than those located in the US. Ukraine is considered to be one of the best money-saving directions for hiring external contractors. A company with a portfolio of cases should also enlist at least a couple of reviews on its website. It allows establishing more trusted relationships with potential clients. Top companies always have some sort of trophies to boast.

Is it better to outsource or outstaff your employees?

Therefore, it is essential to contact companies that have established themselves in the market with positive reviews and a good reputation. It’s important to keep in mind that outstaffed teams may not always meet your expectations, especially due to differences in work culture, lack of oversight, or inadequate training. But with proper research smart outstaffing and assessment, you can find a team that is a perfect match for your needs and expectations. Hiring the best outstaff developers is basically the same as hiring a new staff to work for you, except for lower rates and savings on recruiting expenses. However, you must keep your HR department informed of your outstaffing development plan.


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