1 February 2019

What Makes Outstaffing Different?

Nowadays more and more companies consider to hire remote employees. That’s why outstaffing as a model of hiring became popular and demanded. However, there are still many questions about this staff management process. To make it clear, it is necessary to understand how outstaffing differs from other models of hiring and what are its main advantages over them.

Outstaffing vs Outsourcing

It is the most widespread dilemma what to choose – outstaffing or outsourcing. To answer this question it is necessary to understand the critical difference between these 2 models.
The main idea of outstaffing is to hire a specialist that will join your team and receive all functions as your employee being officially recruited by another company. The outstaffing company will be responsible for paying wages, taxes, preparing documents for every worker and providing with the necessary equipment. But still, you will have direct communication with the staff and will be able to manage and control the working process on every stage. So outstaffing model helps to increase in productivity by hiring the specialists needed and save money on human resources management by getting rid of responsibility to transfer taxes, compensations, etc. for every employee.

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The main idea of outsourcing is to complete the exact project. It means that you entrust the supplier certain tasks or the whole project development. In such case, the outsourcing company is fully responsible for the result. You rarely have direct access to the development team. The communication occurs between you and the project manager of the outsourcing company who is managing the working process. So there is no need for you to be involved in every stage of the project. However, after it is complete, you need to hire the outsourcing supplier again. While the outstaffing model means that you have your team of specialists who are carrying out all the job duties for your company and can be involved into several projects if it is needed. So the difference between these 2 models – outstaffing and outsourcing – is obvious.

Outstaffing vs In-House Employees

Another question that also needs to be considered is what is better – to outstaff or to hire in-house employees. Despite the fact that 72% of enterprises have already chosen the remote software development teams, some companies continue using the traditional model of hiring. Both options have their advantages and disadvantages that should be taken into account. In-house hiring has the following pros:

  • Face-to-face communication. All your employees are close to you. So you can arrange the meeting anytime you want. Such conversations help the employees to get more engaged in the project. Besides, many new ideas can be created at these meetings.
  • The confidentiality of intellectual property. When all employees are working in the same place, the information will more likely stay confidential that when you delegate the duties to the outstaffing company. That’s why it is so important to choose the supplier very carefully. For example, Outstaffing Inc guarantees full confidentiality of your intellectual property because every specialist we find for your project will sign the Intellectual Property Agreement.
  • Greater control. Having all employees in the office lets you manage and control the whole working process. In-house model of hiring entails quicker communication that gives a possibility to handle the emergencies faster.
  • Company culture. Creating your in-house team you carefully select people with the values and vision that is suitable for the company’s general values and principals. That’s why using an in-house employment option it is much easier to develop an excellent working environment and follow the company’s culture. Besides, employees feel more responsible for the result working in the office.

outstaffing vs

Choosing in-housing model of hiring also have some disadvantages that became a reason for many companies to use outsourcing or outstaffing model:

  • Limited talent pool. Sometimes it is very hard to find the specialist needed for your project, especially in small towns. The recruitment process takes a long time and isn’t always successful. Outstaffing model lets you choose the best expert who will fully satisfy your project’s needs.
  • Compensations. Nowadays the majority of companies offer much more than just a salary to keep high-skilled specialists in their teams: insurance, dental compensations, free lunches, courses, etc. And it becomes really expensive to hire an expert. Outstaffing eliminates all overhead compensations required by the employee.
  • Loss of time. As it was mentioned before, the recruitment process can be very tough and long. You need to find candidates, consider all CVs and arrange an interview (sometimes even several interviews), while the project development remains on the same stage. You can save your time turning to outstaffing services.
  • All the paperwork. Hiring in-house means to take care of all the necessary documents, banking, payments and other current issues connected with staff management. Using outstaffing services you get rid of the need to calculate and transfer taxes, to prepare all relevant papers, etc.
  • Huge expenses. Besides the compensations and taxes, you provide the employees with all the necessary equipment and other working stuff. You also need to rent the office and to pay for utilities. Taking into account salary, office equipment, and other necessary payments, it turns out that in-housing employment is very expensive. You can save up to 40% of costs choosing the outstaffing model.
Outstaffing vs Opening a Branch Office

Comparing outstaffing and opening the development center in another country or city, it should be mentioned that such an option has almost the same pros as in-housing hiring. The employees feel more responsibility working directly in your office. The communication is easier and faster, and the level of IT project engagement is higher. One more advantage of the development center is the possibility to choose the country with lower prices and cheaper specialists.

However, it also has its cons. You still need to pay the office rent, provide the employees with all the necessary working resources. The outstaffing model reveals you from these expenses. The outstaffing agency takes the full responsibility for every employee and provides with the necessary equipment, compensations, etc. One more important disadvantage of the branch office is that you need to find a really reliable person for general management there. And it’s not an easy task. Also, the difficulties can arise when it comes to the labor legislation as it differs in every country. When you turn to the outstaffing agency, you give them all the responsibility for preparing documents, executing labor legislation, etc.

To sum up, all the hiring options (outsourcing, outstaffing, in-housing) have their pros and cons. To choose the most appropriate one it is necessary to determine the exact needs and purposes of your business or IT project. In some cases, the best solution will be to combine several modes – in-housing and outstaffing. If you are a start-up or you don’t have programmers, designers or other specialists for your project development, then outstaffing can be a good idea for you. If you are hesitating or just want to learn more about software development outstaffing, feel free to contact our manager. Any case is unique, and Outstaffing Inc is to find the best solution that will work for your business goals.

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