The worldwide market size of re-appropriating administrations including the outstaffing employing model stands at about $88.9 billion in 2023. Outstaffing is one of the most popular remote resource hiring models used in today’s market, especially for software development and information technology. It has a lot of significant advantages for businesses all over the world. Let’s define the difference outstaffing vs outsourcing:
Outsourcing vs Outstaffing: What is the Difference?
- Outstaffing is a remote hiring model in which a third-party contractor provides a dedicated team of IT professionals—web developers, software developers, software testers, or any other resource—as a remote resource for the main client’s IT project. The team working on the client’s project for the duration of a contract. During the agreement, the hiring client will have complete control over the IT team or individual hired for his or her project. To successfully complete the project, the client can communicate with the resources of the dedicated development team through discussions, updates, phone calls, and other means.
- Outsourcing is the business practice of hiring a third party to provide services or produce goods previously performed in-house by the company’s staff. Companies typically employ outsourcing as a means of reducing costs. As a result, it can have an impact on a wide range of jobs, including customer service, manufacturing, and back office.
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Outstaffing Hiring Models
Now let’s take a look at the most popular outstaffing pricing models:
Hiring freelancers online takes about 40% less time than traditional remote hiring methods. The hourly rate and the fixed project price are the two main types of agreements typically used in freelance hiring. Although it is the most cost-effective hiring method, freelance remote hiring carries a significantly greater risk due to resource control and dependability than other models.
2. Global Team Model
One of the most influential models of remote hiring that is most frequently used in the software development industry is the global team model, also known as the global delivery model. The development team in this model is made up of both onshore and offshore resources that are spread out all over the world. Due to the continuous availability of resources, this is a beneficial strategy for completing the project quickly.
3. Virtual Team Model
This model of remote hiring employs a diverse group of individuals from various locations around the world. They work on development projects in dependable parts and coordinate electronically.
4. Dedicated Team
The skill-specific remote resource or team of resources in the dedicated team model is under the control of the company that outsources its project to a third party. With the assistance of their dedicated team of developers, the third-party company ensures that the project’s entire work scope is completed and takes care of all hiring and legal obligations based on the contract.
Pros and Cons of Outstaffing
As an every hiring model outstaffing has its strong sides and weaknesses, let’s take a quick look at them:
Pros of Outstaffing
- Offers more noteworthy command over the workers
- A lot less expensive assets when contrasted with in-house representatives
- Adaptable group to handily scope up and downsize your groups
- Simple need the board
- High effectiveness and efficiency
- Quick opportunity to showcase
- Lower project costs
Cons of Outstaffing
- Communication management is complex;
- Multi-cultural mindsets are difficult to comprehend;
- Team motivation is a significant challenge;
- Time zones pose additional challenges for outstaffing teams.
Misunderstanding about Outstaffing Model
There are a lot of positive opinions about the outstaffing method of remote hiring, but there are also some misconceptions about it in the market. The following is a list of the most prevalent misconceptions:
- Outstaffing is NOT the same as outsourcing
- The third-party company controls productivity, workflow, and task assignment. As a matter of fact, a large number of exercises are the obligations of the organization that enlists them for their ventures, and just organization and lawful commitments of the agreement are the obligation of the outstaffing organization.
- The in-house development team is separate from the outstaffing team. In fact, it is a member of an internal team at a remote location.
To Sum Up
Many IT companies, including large corporations, are also choosing outstaffing services in countries like Ukraine, India, Brazil, and other parts of the world, despite a few obstacles that the outstaffing remote hiring model faces in the market.
Overall, outstaffing has its advantages and disadvantages, but if you are looking for a cost-effective decision of getting highly skilled employees, it will work the best.