Outsourcing vs Outstaffing Models in IT: What is the Difference?

Basically, you hire a team 100% dedicated to your project and working as a part of your in-house team. The client will have full control over the IT team or an individual during the whole contract period. Outstaffing is when a customer requires the exact specialist from an agency for performing short-term tasks. Outstaffing is quite similar to hiring a freelancer, but the main benefit is that you can be sure of your project’s high quality and security level.

This ensures that they are experienced in what they do and they have all the necessary skills to complete any task accurately and timely. One of the most prominent examples ProCoders has in our experience is the software development for Dryft. The team considered options for their versatility, interoperability, cost, and function. Once the right tools were identified, a work plan was assembled with an eye to speed and maximizing the budget. There are two outstaffing models for paying for and managing your outstaff team.

Or you’ve already opted for one of the models but want to know all about its pitfalls? We strive to provide cost-efficient and high-quality tech professionals to help entrepreneurs in their journey of changing the world. Speaking about outstaffing, it is just impossible not to discuss how it differs from outsourcing. What makes them similar is the fact that both of them suggest the engagement of remote and cheaper staff.

What is the difference between Outstaffing and Outsourcing?

Naturally, greater control entails greater responsibility, so managing an external development team may not be so simple. Since these programmers are formal employees of the outstaffing company, they are more likely to identify with the supplier than with your organization. They frequently demonstrate a lack of concern for the future of a client’s business, corporate culture, and, most importantly, the product itself. All of these circumstances can lead to bad job outcomes for which you are solely responsible.

Check the reviews and ratings on platforms like Clutch, GoodFirms, or Upwork. Ask former or current clients about their satisfaction with the vendor. Another key might be to explore what industries and what type of workload a company is engaged in. We build mobile and web apps for companies and enterprises from Western Europe and the USA, designing, developing and testing our products internally.

What is an IT Outstaffing Model?

It can be higher if you want to collaborate with a company with lots of good feedback and a high reputation. This is because these companies have more customers than smaller ones and can afford to hire more qualified developers. You just need to send your requirements and get the CVs of those interested in your project. It wouldn’t software outsourcing and outstaffing be just freelancers you have found on the freelance platform, but real professionals who were already interviewed and tested by specialists. The cost of the dedicated team is determined by the number of working hours, the cost of the hired developers, the duration of the project, post-deployment maintenance and support.

The salary that an employee receives is not disclosed to the clients, as the IT Service Provider can leash that money based on their liking/management decisions. It becomes evident that even though outsourcing and outstaffing are based on the same principles, the two models have key differences. For this reason, it is important to explore each model’s pros and cons. By doing so, you will be able to identify which model is the best for your company.

Pros

Your outsourced IT team will need hardware and software to complete your projects, but those expenses will not be directly on your expense ledger. Your vendor will be responsible for all the costs of those expenses, and this will most likely be factored into the estimate for their work with you. A perfect example of outstaffing is Procoders’ collaboration with AxisPoint/VSimple.

You need to quickly boost development velocity based on competitive pressures. All the delivery concerns are in responsibility of the client and his team. Your partner will assist you with regular discussions, issues resolutions, project tracking, and other project-related things.

The https://globalcloudteam.com/ requires active involvement of both parties. The client has to actively manage their remote dedicated team, meanwhile, the outstaffing agency concentrates on providing a comfortable environment for work and growth. Moreover, because outsourcing is more short-term based than outstaffing, the vendor typically charges an extra premium.

What is Outstaffing: Key Points to Know

The outsourced individual’s or team’s payroll is managed by the dev partner and not the client company. The key to making more revenue in the outstaffing area is to sell more hours. In various organizations, outsourcing and outstaffing can mean very different things. A dedicated team collaborative model presupposes hiring remote IT workers to develop a product. Such a team includes a project manager that manages a team or assigns tasks instead of a product owner. The PM will take care of all aspects and organize teamwork.

• An employee who has gone on long-term leave desperately needs to be substituted by a superhero software developer.
• All delivery issues are under the control of the customers and their team.
• That means you have fewer management and technical responsibilities.
• Do you have the capacity to bring that person in as a “vendor worker” or “contract worker” within your company?

Outstaffing is one of the most widely used distant resource hiring techniques in the field of information technology, particularly in software development, in the current market. It offers a number of significant benefits to businesses worldwide. The concept behind is to reduce costs and a way to use someone else’s highly-specialised expertise and experience.

What is outstaffing and what are the benefits of it?

NorthDev sends TalenStaffingtPro detailed job descriptions and requirements for their open positions. TalentStaffingPro proceeds to find fitting candidates, who NorthDevTech interviews and then approves the ones they like best. The latter sign contracts with TalentStaffingPro, while TalentStaffingPro signs a contract with NorthDevTech. This way, NorthDevTech indirectly hires full-time talent that is technically employed by TalentStaffingPro.

Cooperation with an outstaffing company lets you not bother yourself with numerous issues related to tax payment, insurance, remuneration, perks, vacation pay, staff training, and many more. All this stuff is within the responsibility of your outstaffing company. Your only obligation is to make payment according to an outstaffing contract. During the whole collaboration process, the outstaffing partner stays in touch and provides support. Calls are arranged with a certain frequency to share feedback, access specialists’ performance, and discuss some ongoing operational issues.

One of the primary advantages of outstaffing is that outstaffed specialists become full-fledged members of a client’s team. It means that the client company actually manages all working processes. Its team leads or project managers assign tasks to outstaffed team members and supervise their execution. The ability to manage a workflow can be crucial for many companies that prefer to have everything under their complete control. This one is a vital question that companies seeking software development often ask.

Still Not Sure Which Model To Go With?

If you are looking for outstaffing services in Ukraine and Poland, contact Efisco. Outstaffing model becomes even more popular than the standard outsourcing. This model allows companies to control their costs and enable them to become more flexible when it comes to software development. The primary benefit of the model is that you get full control over your resources and pay not for features or hours, but for a team member who is working on your project full time.

Outstaff makes my life much easier by taking that worry off my plate. I wish Outstaff had been around when I first went into business for myself 14 years ago. Over the past decade, Ukraine became a “go-to” country having the greatest number of software developers in the world. These remote developers are well-educated, well-trained, and… However, you have to choose the optimal model for your business, depending on its primary needs, goals, and possibilities.

They can build software from scratch and keep maintaining it throughout its entire life cycle. Outstaffing is “renting” specialists from another company. They remain on the staff of their primary employer and are paid on the contractor’s books. But they are entirely controlled by the business that hires them.

How to Stay Afloat in 2022 by Hiring Tech Talent in Eastern Europe and Latin America

You can only trust an outsourced developer if they have a solid reputation and good reviews from other clients. If your outsourced company has no reviews or poor ones, then there is no way for you to judge their quality. Why do companies look for IT talent outside their own organizations? Using an outside vendor saves not only benefits and overhead on employees but base salaries for IT workers when you combine outsourcing with offshoring to countries with a low cost of living. 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. Outstaffing company provides you with qualified resources and creates the required comfort and productive environment for them.

Conclusion: What to Choose in Your Case?

As soon as the client provides positive feedback on the candidates and approves them, the outstaffing company makes them a job offer. In such a way, the outstaffing company actually deals with payroll, benefits, insurance, taxes, etc., whereas specialists work exclusively on a client’s project. The outstaffing vendor facilitates the communication between the sides by introducing HR or account managers, lawyers, accountants, and other relevant specialists. At this point, a smooth and quick onboarding process is key to success. An HR manager has to make sure that the newly-hired engineer understands their role, has all the accesses, and can use all the communication channels. By implementing the outstaffing model, you save money on two fronts.

Compared to outstaffing, outsourcing typically sets higher rates. The reason for this is that customer pays significantly more for the whole team involved in the project, than hiring a single person. The client won’t have to take part in the hiring process and waste time on interviews to find the relevant specialists. The agency has already done that and vouches for a high level of contractors’ expertise. For example, if a bakery wants to make a website, its owners definitely won’t hire an in-house team of developers to do that.