Outsourcing vs Outstaffing

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Finding skilled IT experts is not a simple process. Jobs in technology are among the most difficult to fill since talented people are in great demand in a talent pool that is scarce.

Many businesses choose to outsource part of their work or hire another company to handle part of their workers (Outstaffing), rather than forming an in-house team.

Which method works best and should be applied depends on the project and organization, the answer may differ for different situations. Here's a quick summary of each alternative and when it makes the most sense.

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First, we need to define both methods to understand the differences:

Outstaffing is a kind of remote work in which a firm (the outstaffing company) is responsible for the hiring, contracts, and every administrative aspect of having an employee but another company (the client) works with this employee as if it was in their own team. As a result, rather than working on many projects, an outstaff team member would focus on only one client.

In this method, a customer can "hire" a dedicated IT outstaff team member, with the IT outstaffing services provider acting as the formal employer responsible for benefits, payments, administrative expenses, and any other arrangements.

In Bait, for example, clients are able to hire vetted remote Latin American talent in a very quick and easy way. This happens because Bait is leveraged in a whole recruitment and partners network, bringing the speed and vetting process necessary for the IT market.

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Outsourcing is a management method that involves hiring some services or job responsibilities to a third party. This means that the client trusts the Outsourcing company to deliver the service or job complete (instead of adding an employee to their team as in outstaffing).

An outsourcing company might include a variety of functions, ranging from the complete IT development of a project, being ready to handle contingency plans, network services, or QA testing.

In some companies, like Bait, for example, the client is also to hire an entire outsourced IT team that has already been working together. In this case, the client will benefit because they know how to work as a team already, saving time and gaining the agility to get the project or job done faster.

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Now let’s talk about some pros and cons of Outstaffing and Outsourcing:

Code quality

• Outsourcing: The outsourcing company has full control of the quality of the project/job, this means that the quality will depend entirely on their performance.
• Outstaffing: As long as you are able to choose who and how do you work with you’ll be able to expect the quality to be in your standards.

Flexibility

• Outsourcing: As the client is not involved (at least not in the daily work) with the team and these employees might have another project/job in parallel, it is hard to be so flexible.
• Outstaffing: While the outstaffing company handles payroll, staff resources are committed to you and your IT requirements only (you manage how flexible you need to be).

Costs

• Outsourcing: The client pays only a final price for the project as long as the project is done and delivered.
• Outstaffing: The client can pay per hour or monthly for the resources are required at a certain point.

Communication

• Outsourcing: In this method, the communication is managed directly with the company owners/managers. Therefore, the project scope and its details must be extremely clear for everyone.
• Outstaffing: When hiring a remote employee or team, you must guarantee that they are completely integrated into your project management software and that their reporting is visible to the rest of your team. Setting clear objectives and being active on a daily basis are essential. In Bait, a direct communication system is established to ensure that the client and the development teams are completely aligned.

So, what should I choose for my business?

Outsourcing is built on collaboration and designed to get a project done in a quick and efficient way. If you are able to find an outsourcing company that you can work in long-term projects and come back whenever you need an extra hand, this is your method.

On the other hand, Outstaffing is the method to use if you want to keep track of the remote employee's performance and give them extra responsibilities. You may fill up the gaps in your team and have complete control over the duties you delegate to them by employing specialized professionals.

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