Outsourcing vs Outstaffing: What Is The Difference And What To Choose?

Unlike the outsource team, you are hiring outstaffed employees. Remote employees sign a long-term contract, providing professional help in a certain field. The outstaffed team and in-house team work together on various business processes. With staff augmentation, a company chooses to add to their team individual engineers who are legally employed by another company—outstaffing one. In this way, clients don’t have to find and select the developer(s) for their company themselves.

  • If you hire outstaffed developers who can’t deliver results, it will hinder rather than help your business.
  • We did it to ensure that we can find the best talent for our clients in the shortest time possible.
  • Suppose your company is not too technology-oriented and you do not have in-house specialists to oversee the work of a remote development team.
  • Every company needs to choose the kind of model that will suit its needs.
  • You will also learn how to choose the best offshore development model to help with your projects.

Serhii knows everything about project architecture, data science, and machine learning. His superpower is translating clients’ business needs into top-notch technical solutions. Considering that unclear goals are an obstacle to the success of the project, the partner should get ahead of any miscommunication by guiding the client through the goal-making process. Outsourcing and outstaffing have different levels of control over the development project, which directly affects the outcome. Now, let’s get to dig deeper into outstaffing vs. outsourcing, two terms that are different but often used interchangeably. Outstaffing can adequately solve your business goals, yet it comes with its own set of benefits and risks.

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At Softacom, we have rich expertise in providing services of both types and have gained an excellent understanding of how to opt for the most suitable model in different cases. That’s why if you are interested in working with external developers, do not hesitate to contact us for getting a consultation. Our experts will analyze your business needs and the peculiarities of your project to offer the most appropriate variant of cooperation with an IT partner. We are always open to communication and we will be happy to tell you more about our company and our services. 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.

Nevertheless, both outsourcing and outstaffing are in high demand as companies and startups seek to scale their operations and pursue rapid growth. You can outsource any chunk of work, but if you remain in charge of the daily management of a team’s activities, you will be working within the outstaffing model. The same applies to detailed user stories provided by the client. In a series of previous articles, we’ve covered the many aspects of software development outsourcing, including offshore and nearshore approaches. When a company outsources a software development project, it usually looks to offload an entire project to a providing partner.

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It allows them to quickly set up a remote team that can be productive almost immediately. Meanwhile, companies choose outsourcing when they lack IT capabilities or want to use external resources to build an app. Outsourcing allows companies to be very flexible when fulfilling their software development needs.

outsourcing and outstaffing

Some companies do not have well-laid down structures on how to undertake software development. Also, these companies may not possess the necessary skills and infrastructure to hire competent software developers. Зerhaps these companies do not need long-term cooperation and constant improvement of their product — they need a team exclusively for a point project.

When to Outstaff?

You can still influence the process through the project administrator. Outsourcing also refers to transferring your work to companies offshore, while outstaffing usually means getting local professionals, therefore avoiding communication barriers. The previous section was all about the cons and pros of outsourcing. This section will deal with the advantages and disadvantages of outstaffing. Everything has its pros and cons, and this section will tell you about the advantages and disadvantages of outsourcing.

As you can see, outstaffing and outsourcing have a common prefix – OUT. Does this mean software development is out of the client’s control? If you’re new to software development, it may be difficult to find and hire professionals for your project.

Pros of Outstaffing

Full Scale provides all the experts, from software engineers to project managers and QA specialists. Outsourcing and outstaffing are also often confused with offshoring. Offshoring is a model that involves transferring a part of business to a foreign country. The offshoring model involves hiring a permanent, remote team in a different country.

I enjoyed working in several companies, including startups, small private IT development Shops, and large enterprises with tens of thousands of people on board. We also wrote about a few related subjects like outsourcing failures, best countries for outsourcing, outsourcing to Serbia, in-house development vs outsourcing and outsourcing to India. If you enjoyed reading this article on Outstaffing, you should check out this one about nearshoring.

What Is Outsourcing?

Outstaffing is a type of business model in which a hired person is responsible for all the job duties of a company being officially employed by another company (outsourcing agency). The latter is an employer that decides on the wages, bonuses, and equipment, while a client company sets tasks and assignments. Outstaffing services are also based on working with external developers who are officially employed by another company but there are some peculiarities. Outstaffing can be explained as renting a developer (or a team of experts) that will work on your project and will be a part of your in-house team.

outsourcing and outstaffing

UVIK is an outstaffing company that’s been providing skilled developers for various projects for over a decade. Our specialists have worked in teams on solutions for legal, fintech, ecommerce, management, and other industries, so they quickly pick up the developing pace and maintain it. On the flip side, outstaffing is when a company extends its development team by adding one or several engineers. So, the scope of the project is managed by the CTO or the project manager of the client company and not the development company. There are many options to consider in the outsourcing vs outstaffing debate. Outstaffing is better for clients with significant, long-term needs that need day-to-day control of their vendor team.

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

Outstaffing costs vary according to the country the developers are located. If you outstaff from developed nations, you’d be paying massive salaries. Meanwhile, Asian countries offer developers for outstaffing and outsourcing that command cheaper wages, but you must grapple with the cultural differences.