Outsourcing or Outstaffing: Which Is Best for Your Company?
While outsourcing is a term most are familiar with, outstaffing might be new to you. Today we’re going to discuss the differences between them and the pros of each.
What is outsourcing?
Outsourcing is when you let workers from another company do a particular job for you. The outsourcing provider will act as the employer and will be responsible for hiring, training, wages, and equipment, while you (as the client) provide the worker with tasks.
Most outsourcing providers work on a project-based business model, which means you’re entrusting the outsourcing company the entire project from A to Z (whole scope of work – not just a task or two). As the client, you will rarely have access to the team working on your project as they’re probably handling several projects at a time. If you choose to outsource a task, you’ll most likely interact directly with the manager handling the team.
Pros of Outsourcing
- All aspects concerning the quality and delivery of work are in the outsourcing provider’s responsibility.
- There are lesser management efforts needed from you (client).
- The outsourcing service provider is fully responsible for providing all the necessary equipment and software to finish the project.
- The client doesn’t need to take part in the hiring process.
What is outstaffing?
Outstaffing is when another company hires and maintains a team that is entirely under your command. Basically, you’re hiring a remote team that is a part of your in-house team. In contrast with outsourcing, you treat them as your own employees and not employees of the service provider. Your in-house employees can manage this extended team, or you can hire a remote manager as well.
Pros of Outstaffing
- Hire talented and skilled professionals without paying a high price and taxes.
- Enjoy the flexibility in increasing or decreasing the number of dedicated workers hired.
- Have full control over the development process of the project.
- Have access to all of your remote team members.
Difference between Outsourcing and Outstaffing
Most people think that outsourcing and outstaffing are pretty much the same. And while they sound similar, they’re not the same at all. The primary difference is cost and time commitment.
Outsourcing companies or providers usually work on the entire project or big tasks that require a team of skilled workers. In this case, the outsourcing provider provides support and manages the whole project for you (the client). You will rarely have access to the team, and in most cases work only with a project manager. In outstaffing, you (client) work closely with your remote team as you have full control and direct access to them.
The most significant difference between outsourcing and outstaffing is on who manages the team performing your tasks. Outsourcing deals with the whole project support, while outstaffing hires and maintains individuals.
Which is best for your company?
What areas of your business could need an extra pair of hands? Whether the outsourcing model suits you better, or the outstaffing model is designed for your success – this is something that greatly depends on your business requirements. If you only have a one-time project that needs to be finished, outsourcing may be a good fit. But if you already started a project but will need external assistance, you could go the outstaffing way.
Keep in mind that business requirements can change often. Choose an outsourcing or outstaffing partner that understands your business’s dynamic nature. Ask if your partner can be flexible to meet your needs and mend the contract in a flexible manner so that a single model won’t constrain you.