• As we covered in the previous article, the core of any business is people. One of the most frequent questions that we hear from our clients is:  “We desperately need tech staff for our upcoming projects as our team is not enough.” Or sometimes it doesn’t even exist as the tech forces simply were not needed for the company. Such occasions appear to be pretty common as the hiring process can be time-and-money-consuming, especially when your project, for instance, requires plenty of engineers of different stacks and levels and you lack expertise in attracting the right specialists for the job.
  • Therefore, the problem of staff or expertise shortage for software development with limited HR resources can be reduced to a single question - IT outsourcing or IT outstaffing?  In other words, what would most efficiently cater for your business needs - to hire an external team from a contractor or to order a full-cycle software development from the service provider?
  • Let’s straighten it out!
What is what – quick outlook
According to Cambridge Dictionary, OUTSOURCING is “a situation in which a company employs another organization to do some of its work, rather than using its own employees to do it”. The key moment is that usually outsourcing agencies work on a project-based business model which means that most likely the client entrusts the outsourcing company the whole project from A to Z.
Software or mobile app development, complex infrastructure solutions, hardware setup – all these tasks and many more can be conducted by the outsourcing agency. The main focus of the client is the result they will get from the agency. What the approach to the whole process is, what engineers are hired, how they are managed is the agency’s responsibility. Clients may have a basic idea of the internal process itself; however, their main focus is on the final outcome of the project.
OUTSTAFFING, however, is a type of remote employment when a hired person carries out all the job duties for a company (client) being officially employed by another company (outstaffing agency). The latter one act as an employer, thus is responsible for wages, bonuses, equipment granted to a worker, while a client company provides a worker with tasks and assignments. While using outstaffing services, the main focus of the client stays within the project and the company – the corporate culture, scope of work, relations within the teams, management style – every part is controlled and decided by the client.
First conclusion
  • From these two basic descriptions we can conclude that the key difference between outsourcing and outstaffing lies in the staff managing model.

    When companies work with outsourcing agencies, communication with external development team mostly is run by the agency's project manager with whom they together set the goals, identify the scope of work, deadlines and milestones. The client rarely has the access to the development team itself which actually solves the client's business problems. To put it in other words, control over the client’s project implementation fully belongs to the agency.

    Meanwhile, if companies use outstaffing services, the control over the project implementation is owned directly by the client, while the outstaffing agency is responsible for hiring process and maintenance of a software development team which is fully at client’s disposal. Basically you hire your own remote employees who become a part of your in-house team. This remote software development team can be managed either by your in-house people or you can have remote managers as well.

    WHAT’S MORE – let’s get a bigger picture of what exactly these two services can offer to your business.

Outstaffing model
what is outstaffing
Outsourcing model
what is outsourcing
  • To sum it up, if your company wants to delegate the whole process of development to the outsource service provider, keep the managing issues to the minimum and get the end product, then outsourcing is what your business needs.

    If your company wants to bolster the in-house development process by hiring additional qualified staff without putting them on the payroll yet fully controlling the project, then you should consider outstaffing services.

    Covering both services in IT, we can see that even though they may sound pretty much alike, the core difference between them is the approach to the software development and its management. At GitMax, we run both services for businesses of all types depending on the request of the client. Prior to work, we thoroughly study the company and its business needs to offer the best time and money wise solution. Hit the button “Contact us” below if you’re considering outsourcing or outstaffing services – we’d be glad to help you out!

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