Thanks to the increased demand for software development services, there has been an increased need for outsourcing and outstaffing. As a startup, medium-scale enterprise or company looking to use the services of others, there is a need for you to know the difference between outsourcing and outstaffing and the similarities between both of them.
When you outstaff, you hire external developers and programmers to work with your team on projects.
Outstaffing is a regular practice in the IT and non-IT industries. In the non-IT sectors, outstaffing is often referred to as subcontracting. It is the practice of hiring subcontractors to carry out specific tasks. These subcontractors could be companies or a single person who are mandated to perform specific job aspects that are part of a project.
The term ‘subcontracting’ existed before the term ‘outstaffing.’ Today, outstaffing is the term that is majorly used in the IT industry while ‘subcontracting’ is used in the non-IT industries. The IT industry adopted the term ‘outstaffing’ to stand apart from the non-IT or non-tech industries.
Outstaffing companies are tasked with finding IT developers and programmers to work with other companies for a certain period of time to complete specified tasks. The people you get from outstaffing are directly under your control, and you can mandate them to complete tasks within a stipulated deadline.
You are still in charge of the final product. The workers you get from outstaffing are only there to help you support you and aid you in completing the product. With outstaffing, you can hire qualified, competent staff to help you accomplish tasks in your field.
The primary advantage of outstaffing is that once you hire people, you don’t need to pay their taxes, insurance, medicals and other benefits. You won’t even need to conduct background checks. You won’t spend any money on interviewing them. You won’t need to find them an office space or offer them free lunch. You aren’t in charge of their wages or salaries in any way. Everything is handled by the outstaffing provider, so you have little to worry about.
With outstaffing, you can add as many staff as you want to your workforce. You can also cut them out as you wish. So, you can scale up as you want depending on the level where your project is. You can steer their activities as you wish, so they work in accordance with members of your internal team.
Outsourcing is when you give a project to an external team to manage. You give them your project, and you tell them what to do. You receive gradual feedbacks from the external team based on what they have done so far. You do not have to manage them actively like outstaffing.
So, outstaffing is when people that are externally contracted become temporary members of your staff while outsourcing involves giving other people projects to work on.
Rates of developers by location
|Location||Senior software engineer cost|
|Outstaffing rates (Gros)||Outsourcing|
|United States||$9500 per month||$155 per hour|
|Western Europe||$6500 per month||$60 per hour|
|Eastern Europe||$3500 per month*||$30 per hour|
*rates include not only salaries but also all expenses related to taxes, social insurance, HR, administration, etc.
In the IT industry, there has been a lot of discussion on which is better between outsourcing and outstaffing. Is it more advantageous to contract an external team from abroad or will it be better to give a project to an external company to handle?
Outstaffing is all about the staff. Startups and other small to medium scale companies can easily increase their staff while paying as little as possible. Large companies have even been known to outstaff in some cases. Outstaffing is basically the renting of staff members from external providers.
Outsourcing is the handing over of an entire project to an external company or provider. This company often has all the resources necessary to work on the project and delivered it with the expected quality.
Outstaffing Vs Outsourcing
1. With outstaffing, you can hire skilled staff without needing to pay exorbitant salaries and incur other fees.
2. You can hire as many staff as you wish and let go of them when you wish, allowing for maximum flexibility.
3. You have full control over the software development process.
4. You can access all the members of the software development team.
5. Outstaffing usually costs less than outsourcing.
1. There might be issues with communication, so care must be taken to ensure hitch-free communication.
2. You are responsible for all problems associated with delivery.
1. You don’t need to provide any equipment for hired staff.
2. You don’t need to provide any software for hired staff.
3. You don’t have to take part in the hiring or interview process.
4. The service provider is responsible for delivery and quality, so you have less to worry about.
5. The service provider is directly responsible for management. You won’t need to manage staff.
1. The development process is mostly in the hand of the hired staff. You can’t monitor the project as well as you will be able to if the staff were completely yours.
2. The rates for developing software with outsourcing are often higher than that of outstaffing.
3. The cost of outsourcing can be higher than the cost of oustaffing if the outsourcing process is not well managed.
TrendLine Global is an organization that connects companies to talented IT teams. You get to retain control of the entire development process while having your work done at rapid speed by an external team. We act as an intermediary between your company and the IT specialists.
We are responsible for hiring team members, giving them office spaces, taking care of their welfare packages, approving them etc. You don’t need to worry about their taxes, administration, payroll or any other employee related thing.
By using our services, you get to enjoy access to talented IT staff handpicked by us. We’ll take care of the needs of the team and ensure that your product is delivered according to specifications and requirements.
We help you collaborate and cooperate with them. You can manage them as you wish in a bid to get your company to achieve its goals.
TrendLine Global will handle almost everything for you, so you can have enough time to focus on other important things that will help you meet your organizational goals and objectives.