Recruiting Agency vs Outstaff Company: Comparison & How to Choose

Therefore, many organizations use freelancers as needed, outsourcing or outsourcing the management of their business processes. Responsibility for project success lies mainly with the client. Since neither communication nor project management efforts are offloaded to any outsourcing partner, the success factors for a project stay in-house.

  • There isn’t a simple answer to choosing either approach, as it involves various considerations.
  • This is where knowing what is outstaffing may become very useful.
  • It works very well to avoid excessive expenses and unpredictable decisions, especially when the project takes months, if not years, for execution.
  • Thus, the goal of the outsourcing company is to provide employees, ensure the workflow and complete the task.

Instead, you can simply find an outsourcing company, which will do all the routine processes and pick the most suited team of developers, which will meet all your demands and requirements. Once every formality has been fulfilled, the developers start performing their duties. Every developer will be assigned to an Account Manager who will track their performance and send out invoices under the contract. For hired full-time employees, you pay not only salaries but also various benefits such as sick leave, vacations, and health insurance. Your company may also provide personnel with partial or full reimbursement of advanced training courses, workshops, and visits to sports centers.

Pros And Cons of Hiring with a Recruitment Agency

When you cooperate with an outsourcing company, it works according to its principles and internal order. While working with outstaff developers, the situation is different. They are completely immersed in your work processes and company policy. They must recognize your working methods, corporate culture, and work schedule.

We are sure that we can help you regarding your concerns, as this is what our core expertise is. The concept of outsourcing implies the transfer of a specific part of the duties and tasks to a third-party contractor. Thus, the customer company receives those services that it cannot perform independently. In turn, the contractor ensures the high-quality performance of the tasks assigned to them by a team of own specialists. Alternatively, within classical outsourcing the client partners with an outsourcing vendor that takes full responsibility over managing talent and implementing the project. That’s why outsourcing rates include the cost of daily team management, overheads that the vendor uses to cover the salaries of other employees, and risk management.

What benefits will outstaffing bring to your business?

There isn’t a simple answer to choosing either approach, as it involves various considerations. Nevertheless, both are in high demand as companies and startups seek to scale their operations and pursue rapid growth. Whenever you expand your business, we stand along as a trusted staffing partner to provide additional team members. Basing on clients’ needs, we recruit or pick from our pool of highly skilled professionals with particular domain expertise.

outstaffing model

Plus, you assign tasks and monitor the progress yourself, so you can intervene at any time and modify the development progress. The in-house hiring process may take around 66 days and will cost you more than average. Partnering with an outsourcing agency, you can have a developers team with the needed skills within a few hours. This way, you’ll start product development cycle earlier and launch the solution faster.

Outstaffing vs. Outsourcing – Differences and Aspects to Consider

Finally, they decide on hiring the service an offshore software development agency and get confused with a bunch of terms like software outsourcing, outstaffing, dedicated team, and others. Outsourcing is the practice of hiring an outside company to provide services or products to a business. It involves transferring certain business operations to a third-party provider, which then performs the tasks in-house or offsite. Outstaffing, on the other hand, involves hiring a third-party provider to supply personnel for specific tasks or projects. The provider provides employees who work in the company’s office or remotely, and the company pays the provider a fee for their services. The mediator takes on the tasks of payroll, taxes, labor law compliance (hiring, sick leave, firing, etc.).

outstaffing model

Now, let’s move to the advantages and disadvantages of outstaffing. As your contractor takes care of hiring the experts, there’s no need to bother oneself with employment issues. Outsourcing implies you collaborate with your team remotely, not being constrained by the geographic location of your experts – they can reside anywhere in the world. There are some more specific differences between the approaches.

Outsourcing vs. Outstaffing Models: What is the Difference and Their Pros & Cons

Alternatively, agree on communication rules, such as sending queries by a specific hour and provide response in 2 working days. This helps to manage communication across certain time zones. Sign the outstaffing agreement and formally onboard the outstaffed developers to your team. Provide clear guidelines, task scopes, and expectations to ensure they can be productive as soon as possible. You can do so on search engines, business forums, or browsing a professional platform like Clutch. Take note of their locations, years in service, and areas of expertise.

The company has 15+ years of experience in digital transformation and software innovation, most notably open source cloud-native programs. In outsourcing, the technical vendor takes care of managing the team as well as all the required planning and tracking activities that should lead to the successful delivery of the product. In the majority of cases, what is outstaffing the vendor will staff the team with their existing engineers. Outsourcing is the process of delegating business processes to an external provider or a third party. In IT, outsourcing uses third-party service providers to build from scratch. One of the main reasons why companies choose the offshore development service is to reduce cost on development.

Competitive Rates and a Variety of Choices

This staffing method is perfect for companies that depend on their management team and need to fill in gaps in their workforce. Using this approach, the provider firm manages the payroll, benefits, machinery, bonuses, sick days, holidays, and employment taxes. The understaffed team member, however, is solely focused on the contracting customer. One of the most “transparent” methods of outsourcing services is through outstaffing.

outstaffing model