The COVID-19 pandemic forced many companies to go remote, which led to outsourcing and outstaffing instead of building in-house teams. If both full-time employees and contract workers perform their tasks remotely, why not save money, given that the quality of the deliverables remains high?
Based on in-depth research of the US job market of 2021, 82% of executives in IT companies said they plan to outsource to skilled talent to meet their year-end goals and initiatives. As outstaffing helps quickly close the skill gaps and save up to 70% on salary expenses, both fledgling startups and Fortune 500 enterprises find themselves looking for a reliable outstaffing company.
Read on to discover the benefits of the outstaffing model, find a reliable outstaffing company, and why IT outstaffing in Ukraine is a good choice for technology companies.
What is outstaffing, and who can benefit most from it?
While the “outstaffing” and “outsourcing” terms are used miscellaneously, there is a distinct difference in comparing outstaffing vs. outsourcing.
Outstaffing (dubbed as “contracting” or “offshoring”) is the practice of hiring an employee of an outstaffing company to deliver some service on a project basis. The service provider handles the talent hiring, retainment, replacement, and HR support instead of the customer. The contractor company also provides the workspace, pays remuneration, insurances, and other benefits, and takes care of talent Learning & Development.
Outstaffed talents are supposed to deliver the expected services but are not responsible for the final project outcome. With this employment model, you as a customer will control all workflows, as you have direct access to any out-staffed talent, which acts as a remote member of your team.
What are the best use cases for the outstaffing model?
- Delegating regular tasks, but not the entire project.
- Your IT managers are highly skilled and can handle remote task management.
- The projects you work on have streamlined processes and goals.
- You work under the Agile model so that the project requirements can change with time.
- You need to scale up the team quickly and close the skill gap.
- You have a polished workflow and can ensure full-time or part-time remote workload (which was the main barrier before the pandemic).
- You want to delegate some tasks to a reliable service provider to save money in the long run.
- You are short on time/resources to hire the needed talent internally.
The business benefits of outstaffing
Most of them are listed above, so let’s quickly recap:
- You can scale up your project quickly.
- You instantly access specific skills unavailable internally or locally.
- You gain a long-term partnership enabling projects with flexible requirements.
Some other advantages might be not so obvious, yet are pretty crucial for success:
- Faster hiring. Instead of searching for talent and convincing to join your team, you gain value from day one.
- Lower expenses. This advantage is critical for offshoring.
- Back office covered—fewer overheads with legal issues, paperwork, and accounting. Outstaffing service provider handles this routine for you.
- Rapid onboarding. The outstaffed talents need very little time to onboard the project than a newly-hired in-house specialist.
- Learning & Development covered. The staffing service provider takes care of L&D activities, so you don’t have to invest in them to retain the talent.
- Scalability. In most cases, you can scale the team up in under a month.
- Global talent access. Your local IT talent pool does not limit you.
When we talk about global, we mean you gain access to another local pool of talent, as qualified as your local one — but much more affordable. For example, when you select a destination for IT outstaffing, Ukraine can be one of the best choices, hands down.
Ukraine has around 200,000 IT specialists engaged in various outsourcing and outstaffing products. A Ukrainian outstaffing company can have a backbone team ready to start on your project at once and fill the remaining roles quickly.
Most importantly, these specialists are not beginners. More than 66% of IT engineers in Ukraine are middle or senior developers, ensuring high quality of the resulting deliverables.
When you go for IT outstaffing in Ukraine, you tap into a pool of world-class specialists that charge very affordable rates. You can look at cost-saving with this approach compared to the costs of hiring locally in the US.
Points to consider when outstaffing
There are two main outstaffing approaches in terms of billing:
- Cost model. You pay flat costs per person, and the service provider manages them as they see fit. This way, you don’t know how much the talent costs and account for insurance, benefits, and managerial overhead.
- Cost plus model. You know the full bill (taxes, bonuses, office equipment.), thus having more transparency and control over how you spend your money — but you have to dedicate much more time to billing.
- Cost-efficiency — you can hire seasoned experts for a lower price.
- Scalability — you can add or remove team members with ease and without hard feelings
- Control of software delivery process
- Complete control of workload.
- Maximum cost savings
- It would be best if you had good tech expertise in-house to control the deliverables
- Task management and reporting must be impeccable on your side
- Project outcomes are your responsibility only.
Outstaffing vs. outsourcing: which is better?
We’ve covered the outstaffing part of the question, but what about outsourcing?
Outsourcing is the entire delegation of responsibility for some project aspects or outcomes to a service provider. This costs somewhat more than outstaffing but is still much more cost- and time-efficient when compared to forming and running an in-house team.
Outsourcing vs Outstaffing in Software Development: What is the Difference
Five steps to value with an IT outstaffing company
Below are five key steps to implement to gain value from long-term IT outstaffing for your business:
- Ensure streamlined and polished software delivery workflows internally to ensure outstaffed talents can deliver maximum value.
- Select the team management approach that suits your company culture and business objectives most and use project management best practices, whether you will require an external PM for outstaffed employees or not.
- Dedicate sufficient effort to determining project requirements precisely, so the outstaffing company knows precisely what needs to be done and when to do it.
- Build the Continuous Integration and Continuous Delivery pipelines for managing all the environments required for software delivery and deployment.
- Continuously control the quality of all deliverables to mitigate risks and ensure project success.
As you can see, this is no rocket science, and dedicating sufficient effort will help ensure the success of your outstaffing initiatives.
Let’s sum up the points to keep in mind when going for the IT outstaffing model.
- When considering outstaffing vs. outsourcing, the main parameter is the degree of control and responsibility for the project outcome.
- Outstaffing ensures team size flexibility and rapid value delivery while saving costs.
- If you hire outstaffed talent, project success remains your responsibility, and the outstaffing company provides instant access to the skills needed.
- Streamlined internal workflows and project management best practices must enable outstaffed talent to work at full potential.
- A good outstaffing company will handle all the back office and HR tasks to ensure your outstaffed talents remain productive and motivated.
Here is how Outstaffing AS ensures our customers get maximum benefits from IT outstaffing in Ukraine:
- We staff your dedicated team with our in-house specialists and rapidly hire the best fit from among 2000+ pre-vetted highly skilled specialists to fill all the needed roles.
- We handle the workplace needs of your team, from workstations with secure Internet access to various mobile devices for testing purposes.
- We perform all back-office tasks, billing, and legal support for our team members.
- We conduct all the necessary HR processes (from monthly one-on-one meetings to L&D activities) via a dedicated HR management system to ensure our team members have high morale.
- We manage all the required business trips and purchases needed for the team to operate efficiently.
- We can dedicate a personal PM to your project to streamline communication between your in-house team and outstaffed talents.
As you can see, outstaffing is a viable and cost-efficient approach to software development, allowing you to rapidly close the skill gaps and deliver value to your customers faster if you partner with a good IT outstaffing company. Should you have any more questions or want to discuss your project details with us — contact us today, and let’s talk business!