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Outsourcing VS Outstaffing: how they differ and which is the best for you

Outsourcing is not the only best way to attract additional offshore teams to your projects. In many cases, outstaffing could be a more efficient and less risky alternative. 

Today, companies are often faced with a lack of qualified programmers in local markets. The traditional way out in this case is offshore outsourcing which allows one to temporarily extend staff, for example, to promptly develop a high-quality software product. Even big industry players use it as a flexible management tool that allows them to solve short-term current tasks.

Though outsourcing is not the only option. Businesses of any scale are increasingly practicing outstaffing, also known as staff augmentation. The offshore R&D office is a common analog to this model often used by large companies. In any case, this means creating your own dedicated development team in a country with a good choice of highly qualified specialists. For a clearer understanding of the model, you can visit newxel.com/category/blog

Let’s have a closer look at the features and benefits of these two approaches.

Features of outsourcing

Outsourcing teams usually work on a project basis. You contact an outsourcing partner in another country, a company that, in your opinion, meets the requirements for the successful implementation of your project, and offers a deal. After you strike hands, your partner forms a team of his own in-house developers to participate in your task. Control over the development and responsibility for the result lies with the management of the outsourcing company. All you have to do is get the finished product and make sure that it meets the requirements agreed with the contractor. Commonly, you can pay for the work done or for the time the team took to complete the task.

Outstaffing features

Unlike outsourcing, when you involve another company with its staff, outstaffing means building your own dedicated full-time team abroad for a more or less long period. Your development team will function as part of your in-house staff, focusing exclusively on your projects.

Major industry players like Google or Microsoft create their R&D departments in other countries on their own, smaller companies turn to local providers, outstaffing partners who take over the entire routine of building your offshore team from scratch and organizing their work. 

For example, in Ukraine, a country known for a large number of high-skilled developers, such services are provided by Newxel. By the way, in their blog about dedicated teams, you can find a lot of really helpful information on this issue. 


What does your outstaffing partner do?

The outstaffing provider is responsible for hiring developers, QA engineers, and other specialists needed, using its highly qualified recruiters with a technical background. The whole recruiting process is transparent for you. You participate in interviews and make decisions about each candidate.

The contractor also finds an appropriate office, purchases the necessary equipment, and solves legal issues. Once the team is up and running, your partner provides all-around support by carrying out accounting work, implementing the best HR practices holding one-to-one meetings with your employees. At the same time, you manage your team directly.

In the outstaffing model, you pay salaries to employees, as well as a fixed cost for partner services, which usually include recruiting, HR support, office administration, all issues related to infrastructure and equipment.

Pros and cons of both models

The main benefit of outsourcing is that you do not need to spend time assembling a team from scratch, you are using an existing set of specialists from a partner company. Such a scheme is reasonable when it comes to short-term tasks that require quick solutions.

Building an offshore team will take time. But according to the articles in the blog from Newxel, this is a good and safer solution for long-term work. The main danger of outsourcing is data insecurity. All codes for your product are stored on the servers of the partner company and you do not have access to them. On the contrary, an outstaffing partner does not have access to your data.

In addition, in out staffing, your team is a full-fledged part of your in-house staff, which fully shares your corporate values ​​and speaks the same language with you. Not to mention that it will not waste energy on other projects and treat your tasks as temporary work.

Anik is an IT professional and Data Science Enthusiast. He loves to spend a lot of time testing and reviewing the latest gadgets and software. He likes all things tech and his passion for smartphones is only matched by his passion for Sci-Fi TV Series.