Outsourcing Vs. Outstaffing: Which is Good?
Outsourcing vs. outstaffing has been a popular debate in the IT industry for a while. Some business owners believe outstaffing is more effective as compared to outsourcing, while many others believe the opposite.
If all of a sudden, you are eager to figure out which one of these hiring models is the best, you probably are in need to deploy IT professionals from outside your company for some major project related to mobile app development, SaaS app development, etc.
In this article, you will find everything you need to know about outsourcing vs. outstaffing and more. Let us start with a brief introduction to both outsourcing and outstaffing.
Introduction to the Outsourcing Model
Outsourcing is a fast-growing business employment model for which global spending is expected to go beyond $700 billion in 2023. This stat is more than enough to prove how powerful outsourcing has become in recent years.
It is a type of remote hiring where a third party is hired by a company to take over certain projects for their business. Outsourcing is when you, as a service seeker, reach out to an independent outsourcing agency that provides you with experts to take care of whatever project you need help with.
A business generally opts for outsourcing services when it is short on the manpower or is looking for cost-effective ways to carry out certain business processes. Most often than not, a company switches to an outsourcing model when it is reluctant to set up a team and pay regular salaries.
Introduction to the Outstaffing Model
Unlike the global outsourcing market, the outstaffing industry is yet to reach its full potential, thus making outstaffing a relatively new hiring model. Many businesses are taking an interest in outstaffing as they learn how this model can prove beneficial for them in the long run.
Outstaffing and outsourcing are both remote employment models and differ from one another by the tiniest of margins. Outstaffing is a type of remote hiring where an expert from outside the company is hired to work with the team full-time and for a fixed salary.
Outstaffed employees are just like regular employees, except for the fact that they don’t have to be physically present in the workplace. They are expected to be available during office hours for work from wherever they are operating. Both the employer and employee can save money and resources through the outstaffing model.
Outsourcing Vs. Outstaffing: Benefits for Your Business
The second step to learning more about outsourcing vs. outstaffing is understanding what benefits these two hiring models have to offer.
Advantages of Choosing an Outsourcing Model
When you hand over some business activities to an outsourcing company, you save time and money without compromising on the quality of the work. Due to differences in wages in different parts of the world, you can find and outsource your IT tasks to an agency with highly-qualified professionals where you don’t have to pay much. This is why many businesses outsource their work to India at low costs.
Focus on Core Business Activities
By outsourcing projects to an outside agency, you free your team to focus on other important things. When you have an outsourcing team taking care of all daunting tasks, you can invest your time and energy in other crucial assignments that need your attention. By delegating projects effectively within your company and to an outsource company, you can also enhance your overall workplace productivity.
Stay on Top of the Market Trends
When you hire a professional outsourcing company, you don’t have to worry about keeping up with the latest trends in the market or training your in-house team. Your outsource professionals will be well-versed in the hired field of work which will eventually help you shape your projects as per the current trends.
Faster Turnaround Time
If your team is already under the pump, they will find it hard to meet all deliverables on time, which eventually leads to an interruption in the workflow. Whereas, when you outsource the same tasks, you can set deadlines according to the work and your requirements. This way, your outsourcing agency will get the job done within the specified time, thus speeding up the entire process.
Lastly, outsourcing your business activities will give your company an edge over its competitors. You can leverage knowledge and skills from the outsourcing firm and prepare your business for the upcoming market changes. Not just this, you can make your business come across as more flexible to deal with changing trends, leaving your competitors behind.
Advantages of Choosing an Outstaffing Model
Reduced Overall Expenses
Both outstaffing and outsourcing offer various ways to save money. However, outstaffing might provide more advantages to cost reduction as it lets you take full control of workforce management. You don’t have to spend anything more than you have to on infrastructure, regardless of how many more members you add. Plus, you can decide what salary you want to pay an outstaff employee, depending on your requirements and the person’s skills.
Better Control Over Project Management
Unlike outsourcing, outstaffing enables you to stay on top of each project and set the tempo for how things will go. In outsourcing, once you hand over the project, the hired service providers will dictate the terms at their convenience. So, if you want to get some projects done remotely without losing your influence over them, outstaffing is ideal for you.
Pick the Best Talents to Work with You
When you hire an outsourcing service, you choose an entire agency based on its reputation. However, when you go for outstaffing solutions, you can handpick professionals who will work on whatever tasks you have lined up for them. It gives you the peace of mind of knowing that you have the best person in place for a particular job. By choosing each talent yourself, you refine your employee pool, which in time benefits your business.
Decrease the Time to Market
Sometimes an in-house team can find it hard to reach deadlines or follow a set timeline to launch a new project. In this case, hiring a remote team to pace up the work is a great solution. The outstaffing model is perfect in these scenarios because it lets you have more people on board to make sure that the launch is done on time. So, the best way to decrease the time to market a product is through outstaffing.
Stay Away from Local Employment Laws
Every business owner is well aware of the local employment laws that they have to follow for their in-house team. These laws can be relatively strict, but businesses are bound to follow them by law. But with outstaffing, you can provide full-time employment to professionals without being restricted by most of these laws. You can hire a team on your terms and set conditions that equally benefit both parties.
Outsourcing Vs. Outstaffing: What to Choose?
The third step to understanding more about outstaffing vs outsourcing is carrying out an honest comparison of both models.
|Purpose||Handling an entire project from start to finish.||Handling specific tasks within a project.|
|Turnover Time||Faster than insourcing, but slower than outstaffing.||Relatively faster than both insourcing and outsourcing.|
|Project Handling||The project is managed by the hired outsourcing agency.||The project is managed by the hiring party.|
|Budget||Cheaper than insourcing, but costlier than outstaffing.||Relatively cheaper than both insourcing and outsourcing.|
|Communication||Less or no in-person communication.||Frequent in-person communication.|
In their own right, outsourcing and outstaffing both have their pros and cons. However, given the comprehensive approach carried out in outstaffing, it is a better hiring model as compared to outsourcing.
Outsourcing is more prone to poor work quality as compared to outstaffing as the employer doesn’t have direct control over the work. This is why smart business owners are paying more attention to outstaffing as it is cost-effective and time-saving.
Moreover, since the outstaffing model is fairly new, it aligns better with the expectations of modern businesses. Outsourcing has been an active hiring strategy for a long time, but outstaffing brings an innovative way to hire skilled professionals.
For a fast-growing company aiming to be one of the best, being aware of the latest hiring models is of utmost importance. Lucky for you, you can find everything you need to know about outsourcing vs. outstaffing in this extensive blog.
Although different businesses might make a choice based on their perception and requirements, outstaffing could be a better pick on paper. So, you must make the decision wisely in the end.
Whether you are looking to hire professionals for web development or mobile app development, figure out whether you should opt for outsourcing or outstaffing. Take your time to come to a decision, don’t rush into anything without prior research.