There is a common misconception that outsourcing and outstaffing are interchangeable terms. This misunderstanding arises because both approaches involve delegating work to external employees. However, in reality, these concepts represent distinct relationships between a company and its non-core personnel. Today, we will explore the concept of IT outstaffing and examine the benefits and challenges associated with this model in the context of software development. Today, we will examine what IT outstaffing is and what the benefits and challenges are when used in software development.
What Is An Outstaffing?
Outstaffing is a form of staff augmentation that enables businesses to enhance their existing teams by hiring software professionals from IT outsourcing companies. In this arrangement, the outsourced developers remain based at their own workplaces but operate under the full management and supervision of the client company.
Through outstaffing, organizations can strategically leverage the expertise and skills of external software professionals without the need for physical relocation. The outsourced developers seamlessly integrate into the client’s team, working remotely but effectively as part of the client’s workforce.
In this model, the client company retains complete control over the outsourced developers, managing and directing their work to align with project objectives and timelines. This level of control allows for a close working relationship, effective collaboration, and clear communication channels between the client’s internal team and the out staffed professionals.
How Does It Outstaffing Work?
Outstaffing involves the transfer of staff from one company to another through the involvement of a recruitment agency. It consists of three parties: the host organization, the recruitment firm, and the hired workers. The intermediary company becomes the actual employer of the specialists, and employment relations are established with them. Under an outstaffing contract, the experts conduct detailed work for the keeper company, while remaining registered as employees of the private employment agency.
In this arrangement, the intermediary company assigns a portion of its personnel to another company for temporary utilization. In the realm of IT, outstaffing commonly involves technical specialists, designers, developers, and other experts who are outsourced to address digital challenges.
Outstaffing is usually mistakenly conflated with outsourcing and freelancing. While all three models involve hiring specialists who are not part of the customer company’s staff, there are distinct differences. In outsourcing and freelancing, the customer company typically has limited power over the contractor. However, in outstaffing, the customer maintains a higher level of control and oversight over the specialists’ work.
Benefits of IT Outstaffing
1. Access to a Global Talent Pool
Outstaffing allows businesses to tap into a vast global talent pool. It enables access to highly skilled IT professionals from around the world, providing a wider range of expertise and specialized skills that may not be readily available locally. This access to diverse talent increases the chances of finding the right professionals for specific projects or tasks.
2. Scalability and Flexibility
With IT outstaffing, businesses can scale their teams and resources quickly and efficiently. They have the flexibility to adjust the team size and skill sets based on project requirements and changing needs. This scalability enables businesses to respond effectively to fluctuations in workloads, ensuring optimal resource allocation.
3. Cost Savings
Outstaffing can be cost-effective compared to hiring full-time employees. Companies can bypass expenditures associated with recruitment, onboarding, and maintaining in-house teams. Instead, they can access the required expertise on a project basis, optimizing costs by only paying for the services rendered by the out staffed professionals.
4. Time Savings
Outstaffing eliminates the necessity for lengthy recruitment strategies. Businesses can save time and effort spent on sourcing, screening, and hiring talent. The outstaffing provider takes care of the recruitment process, ensuring that businesses have access to qualified professionals promptly, allowing them to start projects without significant delays.
5. Focus on Core Competencies
By outsourcing specific tasks or projects through outstaffing, companies can concentrate on their essence competencies and strategic purposes. They can delegate non-core functions to external professionals, allowing them to concentrate on critical business activities, innovation, and growth.
6. Expertise and Specialized Skills
IT outstaffing provides access to specialized skills and expertise that may be lacking within the organization. Businesses can augment their teams with professionals who possess specific knowledge and experience in areas like software development, cybersecurity, data analytics, cloud computing, and more. This enhances the overall capability of the organization to deliver high-quality solutions.
7. Greater Control and Collaboration
Unlike traditional outsourcing models, outstaffing offers businesses more control over the project’s progress and outcome. The client company maintains direct communication and collaboration with the outstaffed professionals, enabling seamless coordination, efficient workflows, and effective project management.
Challenges of IT Outstaffing
1. Time Zone Challenges
Effective collaboration between outstaffed developers and in-house teams can be hindered by significant time zone differences. For instance, if a US company hires developers based in the Philippines, scheduling spontaneous meetings becomes challenging due to non-overlapping business hours.
Potential Solution – To address this issue, consider working with IT outstaffing companies located closer to your region or in a time zone that is more manageable for collaboration. Alternatively, establish clear communication rules, such as setting specific hours for sending queries and allowing a two-day response time, enabling effective communication despite the time zone differences.
2. Communication Barriers
Language and cultural distinctions can make communication borders, making it hard to obtain project details, timelines, and expectations effectively. This can hamper ongoing collaborations.
Potential Solution – Prior to hiring out staffed developers, conduct thorough interviews not only with the marketing team but also with the individuals who will be working with you on a daily basis. This will help assess their language proficiency and cultural compatibility, ensuring better communication and understanding.
3. Intellectual Property Concerns
The issue of data leakage and intellectual property protection can be a significant concern when onboarding a remote team that belongs to another company. Businesses dealing with sensitive data or next-generation technologies may hesitate to outsource staff without addressing these concerns.
Potential Solution – Implement measures to safeguard intellectual property, such as establishing regulations for email and communication protocols, managing information securely, and implementing Non-Disclosure Agreements (NDAs) to protect sensitive data.
4. Misguided Expectations
Some business owners mistakenly assume that outstaffing requires minimal management effort, leading to poor collaboration between the out-staffed team and the in-house team. Without clear leadership, direction, and instructions, outstaffed developers may feel confused about their roles within the team.
Potential Solution – Develop an onboarding guideline specifically for the out staffed team. This should include information about the company’s culture, expectations, project tasks, and individual roles. By providing clear guidance and integrating them into the organization, you can effectively manage the out staffed developers as you would with your in-house team.
5. Choosing a Reliable Provider
With numerous IT outstaffing companies in the market, it’s vital to choose a provider that delivers reliability, talent, and professionalism. Hiring out staffed developers who are unable to deliver the desired results can hinder rather than help your business.
Potential Solution – Perform due diligence by thoroughly reviewing client feedback and conducting comprehensive interviews with potential out staffed developers. This will help you make an informed decision and choose a provider that aligns with your business requirements and expectations.
Also Read: Process of Software Licensing Management