When it comes to software development, it goes without saying that everyone, even those who made their very first searches into this world, comes across these two terms: Outstaffing and Outsourcing. So, what these two terms really mean? What are the main differences between them? What are the benefits and drawbacks of them? And which one suits you more? If these are the questions that you are looking for answers for, then below paragraphs are right up your alley. Let’s explore these two terms further together and find out the answers to the questions above.

Outstaffing is a type of remote employments when a hired person carries out all the job duties for a company (client) being officially employed by another company (outsourcing agency). While the latter one acts as an employer and is, therefore, responsible for wages, bonuses, equipment granted to a worker, a client company provides a worker with tasks and assignments.

Benefits of Outstaffing

Cost-Savings

One of the major benefits of outstaffing is that it can help you save money. When you outstaff, you only pay for the work that is completed. There are no taxes, benefits, or other associated costs that come with hiring an employee in-house. This can lead to significant cost-savings for your company, which can be used to invest in other areas of your business.

Improved Efficiency

Another benefit of outstaffing is that it can help improve your company’s overall efficiency. When you hire an outstaffed employee, you are essentially outsourcing a specific task or project. This frees up your current employees to focus on other areas of the business that need their attention. As a result, your business can become more efficient and productive overall.

More Control

When you outstaff software developers, they become an extension of your own team. This gives you more control over the direction of the project since they are working directly under your supervision.

Increased Transparency

With outstaffing, there are no communication barriers between you and your team. This increased transparency leads to greater efficiency and fewer delays caused by miscommunication.

Drawbacks of Outstaffing

Communication Problems

With outstaffed employee often working remotely, or at least separately from the rest of the team, communication might raise some issues. Clients may find it hard to ensure that outstaffed individual or people are fully part of the project management software system, and their reporting is transparent to the rest of the corporate team.

More Responsibility on the Client

The client is usually responsible for many aspects of the project in outstaffing model. It is mostly up to them to be able to provide the outstaffed employee with regular tasks to complete and ensure that they are utilizing the individual’s competencies as much as they can.

Outsourcing

In outsourcing model, the provider of the service usually works on a project-based business model which means that, in majority of the cases, the client entrusts the outsourcing company the whole project from A to Z.

Pros of Outsourcing

Cost-efficiency

One of the primary reasons why companies outsource software development is because it is a very cost-effective solution. When you outsource your software development needs, you do not have to worry about things like expensive overhead costs or employee benefits. In addition, many outsourcing providers offer discounts for long-term projects.

Increased Efficiency

Another reason why companies outsource software development is because it can help them increase their overall efficiency. When you outsource your software development needs, you free up your in-house team to focus on other core aspects of your business. This can lead to increased productivity and an overall better bottom line for your company.

Access to Expertise

When you outsource software development, you also gain access to a team of experts who can provide you with the highest quality code possible. Many outsourcing providers have teams that specialize in specific programming languages or platforms. This means that you can be confident that your project will be handled by someone who knows what they are doing and can get the job done right.

Flexible Staffing

One of the great things about outsourcing is that you can staff up or down as needed. This can be extremely helpful if you’re working on a project with an unpredictable scope. If the scope of the project increases, you can simply bring on more outsourced staff to meet the demand. Conversely, if the scope decreases, you’re not stuck paying for staff that you don’t need.

Cons of Outsourcing

Lack of Control

When you outsource software development, you’re essentially handing over control of the project to someone else. This can be risky if you’re not careful about who you work with. It’s important to do your research and due diligence to make sure that you’re working with a reputable and reliable company.

Communication Difficulties

One of the challenges of outsourcing is communicating effectively with someone who may be located in a different time zone and/or speak a different language. Miscommunication can easily lead to delays and frustration on both sides. This is why it’s so important to choose a company that has good communication skills and established processes in place to minimize misunderstandings.

Which one suits you?

Now that we have made clear what these two terms are and what the benefits and drawbacks of these models are, we can move onto finding out which one to choose on what occasions.

If your company is not very much technology-focused and you don’t have in-house professionals to oversee the work of the development team, then outsourcing can be a better idea for you.

On the other hand, if you have well-defined processes and a proper management to handle the remote team, then you are welcome to stick with outstaffing.

However, each case is unique, and it’s always a good choice to consult with the experts first. If you need an expert opinion on software development outsourcing or outstaffing, you are welcome to ask our experts here at TechCells. We are sure that we can help you regarding your concerns, as this is what our core expertise is.

Zafar Ibrohimov Founder & CEO