Outstaffing vs Outsourcing vs. Managed Services: How To Select The Right Model

It is believed that software outsourcing boosts small businesses’ efficiency and expertise. We will analyze the details of outsourcing vs outstaffing and explain all the terms of offshore development. You will also learn how to choose the best offshore development model for your project. Hassle-free employment of the experienced gems, isn’t it what all employers dream of?

Outstaffing: what is this service and how is it different from outsourcing – jim o brien

Outstaffing: what is this service and how is it different from outsourcing.

Posted: Wed, 09 Feb 2022 08:00:00 GMT [source]

Collaborating with an international outstaffing agency can turn out as a great tool for reducing your costs and time. There are several paramount aspects to be taken into account for choosing the relevant agency. First, you should evaluate their experience in the demanded sphere. Review the agency’s portfolio and services, evaluate the amount and quality of the performed job, and form an opinion about Cost. Typically, European outstaffing agencies are cheaper than those located in the US.

Outstaffing Opportunities for Digital Agencies: How Does It Work?

Outsourcing is considered to be focused on business decisions. And then, the outstaffing model came to the scene as a new method of hiring remote talent. While still technically outsourcing, outstaffing gives the client more control over the product by allowing them to manage remote workers directly.

outstaffing meaning

Often, they manage the hired team along with their own; the payroll is handled by a contractor , though. Sometimes, when deciding between outsource or outstaff, outsourcing will be the clear winner. Outsourcing will be the right option if you have occasional bursts of IT needs, whether to build a new app or shepherd the company through major software outsourcing and outstaffing transitions. So, the definition suggests that an outstaff team member would be dedicated to one client rather than working from project to project.

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You pay for the vendor company, get a dedicated team, while the vendor is responsible for the payroll. Besides, you can be totally flexible when it comes to increasing or decreasing the number of hired specialists. One of the core benefits of IT outstaffing is that it can cover the growing lack of talents that haunt the tech industry. Such a form of employment best suits those companies who want to enlarge their existing team of tech specialists quickly and have ultimate control over the workflow and projects.

So if you have limited time, finding a remote development team that specializes in your area of interest will probably be quicker than hiring your own. We build mobile and web apps for companies and enterprises from Western Europe and the USA, designing, developing and testing our products internally. Currently, we are focusing on healthcare, wellness, tourism, and entertainment industries, where we have a lot of successful cases. People work in exactly the same way as full-time employees. They perform their usual duties, often even in the office of the client company.

Cons of Outsourcing

You don’t need to search and hire the developers directly. The outsourcing company will act as the official employers for people working on your project. Companies choosing outstaffing services usually enjoy development cost savings. When you need to release a new product, a team of at least 100 specialists is required, but during normal work-flow 20 employees will be enough; in such situation, it’s good to hire an HR company.

  • A lot of people believe that offshoring is only for short-term tasks.
  • The global IT sourcing market currently surpasses 85.6 billion dollars.
  • Now, let’s move to the advantages and disadvantages of outstaffing.
  • This factor is often considered among the main outstaffing pros.
  • It’s something like HR agency meets Outsourcing company.
  • Outstaffing allows you to get access to the best software development experts.
  • And this is when knowing the meaning of “outstaffing” and “oursourcing” comes in handy.

Another question that causes a little misunderstanding in software development is about IT outstaffing and IT outsourcing and how they differ. Both of these terms have come in the IT sphere and considered relatively new ones. However, if your project is of enormous scope and you have specialized managers, then start outstaffing. An outstaffing company will be the best to meet your business’s needs if you want to hire professionals to work on a project-by-project basis. This option is suitable for companies with strong management capable of supervising the projects. Such services will also be useful if you suddenly need a superior workforce that your in-house staff doesn’t possess.

Pros of Outstaffing

What follows is an overview of each option and where each makes the most sense. The main reason to address the outstaffing company is to save time and money. For instance, a clothing brand goes online and you need to arrange a call center department. The owner will have to buy equipment, rent an office, search for staff and monitor their work. It is much easier to buy already existing service from an outsource provider.

outstaffing meaning

The best option for them is to hire an outsourcing development agency to conduct the complete development cycle and provide the finished product. If you’re considering using outstaffing to staff your next project or build your dream team, this guide is for you. We’ll cover everything for you need to know about outstaffing, from how it works to its advantages and disadvantages. By the end, you’ll have a clear understanding of whether outstaffing is suitable for your business needs. The software development rates for outsourcing are usually higher that for outstaffing.

Outstaffing: Advantages and Disadvantages

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. But no matter what term you use to define it when you have more IT development needs than your current staff can handle, you need to hire more help. And this is when knowing the meaning of “outstaffing” and “oursourcing” comes in handy. If you need to execute the project on a turnkey basis and do not have specialists to solve this problem, it will be much easier to hire an outsourcing agency. The idea of an outsourcing agency is to finish the customers’ project fast and efficiently.

outstaffing meaning

This way, NorthDevTech indirectly hires full-time talent that is technically employed by TalentStaffingPro. As a result, the Dutch company extends its team with subcontractors located abroad. Outstaffing is an offshore development model where the client hires a contractor from a software outsourcing firm to carry out development tasks. The employee works full-time on their project but is paid by the third-party company. 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.

You just need to send your requirements and get the CVs of those interested in your project. It wouldn’t be just freelancers you have found on the freelance platform, but real professionals who were already interviewed and tested by specialists. Consider these recent statistics from Grand View Research, Inc. All the communication, including discussions, updates, phone calls, and other interactions, are direct, and you can rely on your team since they are hired by you only. There’s no need to spread yourself too thin and keep everything in mind. Outstaffing is excellent for concentrating on the main task.

Outstaffing comes in handy when the client’s needs mean increasing the software development team’s capacity and jumpstarting the development process. A dedicated offshore team consists of two or more high-quality developers involved in the development of a particular part of the project. Unlike outstaffing, a software outsourcing company manages the developers in the hired dedicated team.


So, the main difference is that outsourcing refers to the whole project support, while outstaffing provides hiring and maintenance of individuals. Next, the recruitment process is held on the side of the outstaffing vendor. Their recruiter uses candidate portraits and makes pre-screening calls with suitable candidates.

If your company is not very much technology-focused and you don’t have in-house professionals to oversee the work of the development team, then outsourcing can be a better idea for you. On the other hand, if you have well-defined processes and a proper management to handle the remote team, then you are welcome to stick with outstaffing. However, each case is unique, and it’s always Conventional outstaffing vs smart outstaffing a good choice to consult with the experts first. With the outstaffing approach, the client has full control over management. The outstaffing software development team inherits the existing methodology, processes, tracking tools, and communication approaches. The repository, environments, and automation tools are usually on the client-side or administered by the client.

Small Business Payroll and HR Management

Many vendors may charge you a higher hourly rate for a simple project but may lower their rate when they know you are staying around for greater projects in the future. 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. 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. Outsourcing is when you hire a company or individual to do work for you remotely, often from another country. Both have their pros and cons, so it’s essential to understand the differences before making a decision about in which is right for your business.

Typically, a specialist stays in his previous company but works on another project until it’s completely done. If you need temporary expansion of your workforce, the outstaffing services will come to you in hand. It’s like renting – you team up with a developer from an outsourcing company without employing him directly. 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. Imagine you’re a big company with hundreds of projects and thousands of employees.

As mentioned, Riseapps provides both – outsourcing and outstaffing services. Also, the software development service provider is responsible for hiring, maintaining the team and, as mentioned, payroll. Most often, outsourcing means that your contractor will do the whole scope of work – not just a task or two. If it’s an app, they will deal with everything – from technical requirements to final checks and maintenance.

The quality of code you get from outsourced coders is much better than that from amateur developers. The reason for this is quite obvious – companies hire only experienced developers with good knowledge and skills as they are worried about their https://globalcloudteam.com/ reputation. If something goes wrong with a particular person, you can just fire them. However, in terms of an outstaffing company, if such a situation happens, then it loses its reputation, trust among clients, and, this way, the whole business.

You should clearly communicate your expectations and set up tasks in order to avoid problems. Consider using open-source videoconferencing tools for daily meetings and creating strong connections with every team member. The team delves into business processes, corporate culture, tech team composition, roles distribution, product development plan, and functional requirements of the product. The CEO of NorthDevTech, a Netherlands-based tech company, decides to hire a team of specialists located in an Eastern European country.

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