Outsourcing vs. Outstaffing: What’s Your Best Option?

outsourcingoutstaffing

Planning to hire a remote expert or a team of developers? Here’s a fair comparison between outsourcing and outstaffing.

2020 has proven to be a year of changes. With the current health crisis on our hands,56% of companiesaround the world opted to use remote workers, focusing primarily on outsourcing and outstaffing. And for valid reasons: these two business practices, in addition to cost reduction, offer numerous perks essential for various business needs..

The IT industry is no exception. Let's say you have a software project on your mind. However, you might lack the large, well-trained, and managed team. Or, perhaps, you might not have enough professionals to do the job. Either way, you are missing the right number of people to man your software development project. What do you do?

If you want to keep your expenditures in check, there are two excellent options for you: outsourcing and outstaffing. Let's unpack each practice and help you decide which one suits your needs best.

Outsourcing: A Software Project From Scratch

Outsourcing is arguably one of 2020’s hottest business trends. According to statistics byFortunly, the global IT market for outsourcing will grow by $98 billion in just four years. In the US alone, the outsourcing industry is expected togrow by 1.6%by the end of 2020.

So what is outsourcing, exactly? In IT, it's the practice of using an external service provider to deliver software development and maintenance solutions for your project. There are two primary motivations for using outsourcing: a focus on core business strategies and saving costs.

If you need an app for your business but lack the time or money to build a team of developers, this is a great option for you. As a result of outsourcing, you will have afinished IT projectwithout the need to assemble or manage a team.

Outstaffing: Cost-Effective Control

While outsourcing has been all the rage, outstaffing starts to take its place in the world of modern business. In addition to reducing the costs needed to build a development team, this option offers legislative and tax benefits while giving you a lot of control over the employees.

Outstaffing is the practice of hiring a third-party business that rents its employees to you on a full-time basis. Unlike an outsourcing business, an outstaffing company is not responsible for the quality of the services they provide. Personnel management is also not their job. Instead, you integrate an employee directly into your team of developers.

Outsourcing vs. Outstaffing: A Fair Comparison

Let's discuss the pros and cons of each option and outline the cases in which the specific practice fits best.

ProsConsUse cases
Outsourcing
  • Result-orientation
  • Includes project management
  • Instant team of professionals (no hiring or training)
  • Limited control
  • Risk of miscommunication
  • Startups that focus on core business strategies and don’t need a team of developers.
  • Companies of any size with short-term or one-time projects that do not need an in-house team.
Outstaffing
  • Local supervision and progress tracking
  • Tax benefits and lifting of legal responsibilities
  • Full control
  • Onboarding costs
  • Need to build and manage the workflow
  • Businesses needing to replace a long-term, absent employee.
  • Long-term projects without a specified time limit that require full control with changing conditions.
Pros
OutsourcingOutstaffing
  • Result-orientation
  • Includes project management
  • Instant team of professionals (no hiring or training)
  • Local supervision and progress tracking
  • Tax benefits and lifting of legal responsibilities
  • Full control
Cons
OutsourcingOutstaffing
  • Limited control
  • Risk of miscommunication
  • Onboarding costs
  • Need to build and manage the workflow
Use cases
OutsourcingOutstaffing
  • Startups that focus on core business strategies and don’t need a team of developers.
  • Companies of any size with short-term or one-time projects that do not need an in-house team.
  • Businesses needing to replace a long-term, absent employee.
  • Long-term projects without a specified time limit that require full control with changing conditions.

How Can Perfsol Help?

Both outsourcing and outstaffing are primarily focused on reducing the cost of software development projects. However, each practice has its specific benefits and drawbacks. To avoid the latter, it is important to choose your business partner carefully.

At Perfsol, we have hands-on experience integrating our teams and individual IT professionals into our clients' workflows. We not only possess expertise in software development but also provide the control and communication you require. Whether you choose outsourcing or outstaffing, we’re here to support you with the best software development services out there.