Pros and Cons of Outstaffing
What is outstaffing?
Outstaffing is a type of remote employment in a company when some of the staff is taken out of it. An intermediary, who is an outstaffer, settles the employment relationship between the employee and the company.
Outstaffing involves hiring experienced professionals from other firms to carry out all the job tasks for a company under the control of the business owner. The client company offers tasks and assignments to the employee while the company that withdraws its staff outside the company acts as an employer. Thus, the company is responsible for the wages, bonuses and equipment provided to a worker.
It is a simple mechanism where you basically hire experienced employees who work at their regular workplace. The only difference is that you are their employer for the duration of the project. These professionals are generally developers, designers, analysts and others who carry out the task you have assigned to them.
Companies often come across a point in their development when they require the services of remote experts in order to fulfil their needs. Thus, outstaffing can meet the company’s expectations, depending on the type of business and its goals. The essence of outstaffing is hiring employees while the employment contract states all the terms, conditions and requirements.
It comes with its own set of advantages which will greatly benefit a business who was to implement this type of remote employment.
- Ability to hire amazing professionals in the required field without having to pay high taxes, insurance, facilities and salaries etc.
- Outstaffing rates are the lowest and most reasonable in comparison to other business models.
- As your chosen outstaffing firm acts as the employer of your remote team, you have no employees legally.
- Ability to use workers for seasonal work only instead of making them permanent staff.
- Ability to modify the schedule.
- Increase in investment attractiveness for the firm.
While it can effectively solve your business goals, outstaffing has its own risks and drawbacks.
- Contractors may also not be able to handle the duties if they receive vague instructions.
- Disloyal treatment by workers towards a company that is their unofficial employer.
- High quality communication channels needed which may induce extra costs.
- Since you have complete control over managing the development team, you need a software development process and corresponding qualifications.
- More control requires more responsibility so you have much more responsibility over the final result.
- All delivery concerns are under the control of the client and his team.
Outstaffing will provide profitable and effective results if they are properly performed with business initiatives. However, you need to be prepared to take on greater responsibility of the remote development team as you will have full control of the software development process. Therefore, outsourcing is a more preferable option for you as it looks at your requirements to hire a company. You do not have to worry about the equipment, qualified team and resources. Outsourced software development is best for startup businesses or companies that do not have a development department. In addition, it is easier to explain your needs to an outsource software development provider, delegate the process to the partner and discuss budget and time estimates.
Outstaffing of the workforce is a new idea that has recently become quite common among the business industry in order to promote business ideas via technology. Most software businesses based in the United States or the United Kingdom use the services of software development companies in remote countries.
You need a qualified team of people to turn a unique idea into a working product. IT staffing industry faces new challenges as finding qualified candidates is very hard. Thus, several firms opt to outstaff their projects.
Irina LinnikView all articles by this author.