How Outstaffing Helps to Increase Your Business’s Profitability?
A business’s ultimate success is defined by its ability to strike a balance between growth and profitability. Today, many companies are growing rapidly, but it doesn’t matter unless they are making significant profits at the end of the day. Therefore, if you want your business to be truly successful, you must pay equal attention to profitability. There are many ways for you to increase business profitability, one of which is building a development team with the outstaffing model.
In this blog, we will discuss how outstaffing helps to increase the profitability of modern-day businesses. So, let’s not wait any longer and dive right in.
What is Outstaffing?
Outstaffing is one of the latest hiring models that a lot of businesses are opting for. It allows business leaders like you to hire skilled IT experts from anywhere in the world. The developers you hire through outstaffing work alongside your on-site team to deliver projects quickly.
Although outstaffing is not a new concept, it hasn’t been that popular among businesses in the past. For a very long time, people were confused between outstaffing and outsourcing. Outsourcing is also a well-known remote hiring model, but it is very different from outstaffing.
Outstaffing refers to hiring developers to augment your in-house team. The remote developers you hire through outstaffing work directly under you. Whereas, outsourcing is handing out your software development project to a remote IT company with its own development team and project manager.
There are plenty of benefits to hiring dedicated developers for your project through outstaffing. But the biggest advantage is that when you outstaff developers, it helps to bring down your business’s operational costs and thus increase your business’s profit.
What is Business Profitability?
Business profitability is the extent to which a company’s total income exceeds its total expenses during a given period. It is a commonly used term in the business world which is occasionally also referred to as net income or net profit.
Companies that are highly profitable or take significant steps towards it are likely to have a successful run in the market. This is why every company needs to keep an eye on its overall profitability.
Generally, there are a handful of factors responsible for driving profitability for a business. These factors are increased turnover, reduced cost, and enhanced productivity. Companies that prepare business strategies revolving around these four factors are bound to have increased profit margins.
Organizations across industries formulate strategies to increase business profitability in the long run. More often than not, these strategies depend on the type of business and target market.
5 Ways Outstaffing Boosts Your Business’s Profitability
Now that you know what outstaffing and business profitability is, let’s talk about how the two work with each other. Outstaffing is known to be a smart business hiring strategy that helps a company gain more profit.
Check out the top five points listed below that prove how beneficial outstaffing is for your business’s profitability.
1. Build a High-Performing Remote Team
For any business, no matter how well-budgeted it is, hiring an extensive in-house development team is still expensive. A full-fledged dev team consists of a designer, developer, software tester, software architect, and more. It means business owners hire individual experts and pay them fixed salaries which is only a part of total employee compensation.
On the other hand, outstaffing lets businesses hire development teams easily without going out of their budget. They can hire skilled developers from anywhere in the world at affordable rates. Plus, they don’t have to spend on employee benefits, or any such additional expenses.
2. Reduce Operational Costs
Businesses that augment their development team by hiring on-site employees have to deal with higher operational costs as well. They have to manage office space to accommodate new employees, buy hardware, get office furniture, etc. Thus, the chances of their company increasing their profitability quickly are relatively low.
But with outstaffing, businesses can significantly bring down their operational costs. When someone hires developers from an outstaffing company, they don’t have to worry about paying them anything except the salary. It means outstaffing is cost-effective and helps companies save money and increase profitability.
3. Scale Up or Down the Workforce
When a company grows, it brings in more human resources to keep up with the additional workload. But because of the market’s dynamic nature, there could be times when they don’t have a lot of work. So, having employees sitting idle and still getting paid surely affects the company’s overall profitability.
In the traditional hiring model, employees are hired on a permanent contract and cannot be laid off as desired. This is where outstaffing comes in. Since it is a flexible hiring model, businesses can easily scale up (hire more developers) or scale down (relieve employees) their workforce. Therefore, with outstaffing, scaling your workforce to maintain profitability becomes effortless.
4. Improve Overall Productivity
Your business’s profitability is directly proportional to your team’s productivity. The more productive your development team is, the higher your chances of gaining profits. However, the challenge that many companies face is how to maintain or enhance their in-house team’s productivity.
An in-house developer is often indulged in more activities than one at the same time. It means they are more likely to be distracted which affects their productivity. On the other hand, when you hire a development team through outstaffing, you assign them a specific task to work on from their remote location. This way they avoid any unwanted distractions and get the work done quickly and efficiently which increases productivity.
5. Decrease Time to Market
Time to market is the time that a company needs to build a product and launch it in the market. It is the measure of how fast a company can build a new product from scratch and bring it out to the end users. Businesses that maintain less time to market develop and launch products quickly, which in turn enhances their profitability.
Outstaffing is a powerful remote hiring model that lets businesses reduce their time to market. Depending on a project’s requirement, you can hire an on-demand software team from an outstaffing company to fast-track the process and meet deadlines efficiently.
To Sum It Up
Outstaffing is a flexible hiring model that helps businesses increase their profitability. It allows companies to hand over their development projects to remote developers and focus on other core activities. But that’s just one of many ways in which outstaffing helps you boost your business’s profit. By choosing this model, you also get to reduce operational costs and easily scale up or down your workforce.
Outstaffing assists modern-day companies in keeping up with the ever-changing business world without affecting their profit margin. Therefore, you can also opt for outstaffing and reap its benefits to give your business an edge over its competitors. Outstaffing is also a great way for you to make your business more profitable in the long run.
Teqnovos is a reputed outstaffing company with a wide array of software developers available for hire. You can reach out to us to hire skilled developers and build your development team to increase your business’s profitability. Connect with us today!
Frequently Asked Questions
1. How does outstaffing affect business profitability?
Outstaffing allows businesses to hire remote developers and cut down on operational costs like office rent, hardware rent, etc. Moreover, through outstaffing, you can hire the most skilled developers from a country with lower labor costs. This way you get a superior development service at a budget-friendly rate. Lastly, outstaffing also increases the turnaround time which leads to more sales and increased revenue.
2. How to choose an outstaffing company?
There is no shortage of outstaffing companies nowadays for you to choose from. But making the best pick out of the numerous options can be tricky.
Therefore, you must keep the following tips in mind while looking for the best outstaffing company.
- Understand your business goals and set a clear scope of work.
- Filter out the best outstaffing companies from the rest.
- Ask for testimonials and portfolios to check their proven track record.
- Look for a company offering outstaffing services at a competitive price.
3. Why hire a remote development team through outstaffing?
Outstaffing is the most sought-after hiring model today because it makes it easier for companies to hire dedicated software development teams. Outstaffing streamlines the hiring process and helps you find the best IT talent to work on your projects. Moreover, when you hire a remote team through this model, you manage the team yourself instead of having an outside manager. It means with outstaffing you establish full control of projects handled by remote employees.
4. How does outstaffing work?
Outstaffing is a simple hiring model through which companies hire the best developers. In this model, business owners reach out to an outstaffing company with their staffing requirements. Depending on their project or business’s needs, they can ask for developers skilled in specific development technologies. Companies can then conduct one-on-one interviews with each shortlisted candidate, and hire the ones who are best suited to their projects.