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Comparing Outsourcing and Outstaffing: Key Distinction

Outsourced software development and outstaffing are both widely used terms nowadays that refer to the ways of hiring staff to accomplish the company’s goals. So, what are their definitions, and which is better for your business?

Defining Outsourcing and Outstaffing

In short, outsourcing is when a particular company delegates certain tasks to third parties by signing an employment contract with them. For example, the outsourcing company takes responsibility for all parts of the project for the client, and the employees working on this project may have other projects as well.

In contrast, outsourcing means hiring employees from another company to perform the tasks. In this case, the company, which is the main employer, takes charge of salary, bonuses, taxes, retention, replacement, providing the employees with equipment, and ensuring transfer, while the company-client gives the worker tasks and responsibilities.

So, to explore this matter further, let’s examine the pros and cons of outsourced software development and outstaffing software development.

Pros and Cons of Outsourcing Software Development

Outsourcing business strategy is especially beneficial in these aspects:

  1. The opportunity to engage professional and experienced employees from any corner of the world for remote working.
  2. Cutting costs for employees’ work. The outsourcing model of hiring staff is significantly more cost-effective than the one with full-time employees.
  3. Preventing burnout in the full-time team. Giving a full-time team a break and time to relieve stress is a very effective strategy to increase your company’s productivity. Delegating tasks to third parties can still retain the highest quality of work.
  4. Hiring experts in a particular field. With outsourcing, you can easily find experts in a certain field for one project instead of hiring full-time employees who may not meet the realistic needs of the company.

For the best business solutions, visit Giraffe Software to outsource custom software development.

Also, to provide a comprehensive understanding of outsourcing, it is necessary to have a look at its cons:

  1. Employees have a worse understanding of a company’s major goals, politics, and brand. Specialists in certain fields may know how meticulously to do the job and ensure the highest quality, but they cannot perceive the company as well as full-time employees can.
  2. Communication issues. Keeping in touch with remote workers has indeed become easy in a modern digital world with cutting-edge technologies and high-speed internet, but employers may still face the challenges of different time zones or communication via mail.
  3. Problems with quality control. When giving the freelancer the work, you expect the finished work in the agreed terms, but in this case, you may be less involved in managing, suggesting edits, and controlling the whole process.

Pros and Cons of Outstaffing Software Development

The pros of outstaffing software development:

  1. Free internal resources. A young and developing company may lack the finances to pay for software licenses, social packages, or equipment. By employing the outstaffing strategy, you pass these concerns to the overseas company that takes charge of these administrative duties and paperwork.
  2. Better focusing on business. Every business consists of marketing sales rather than developing software. Therefore, outstaffing gives you the opportunity to concentrate on the business side and make more money.
  3. Company growth. Companies may face the challenges of finding effective staff, so outstaffing is the fastest and most effective way to boost the development of your company.

At the same time, you should consider its cons:

  1. Slow turnaround time. Freelance workers work at their own pace and get paid only after their work is approved, so it may take them more time to hand in the work.
  2. Confidentiality risks. When you invite someone new to your team, there is a risk of confidential information leakage, so it is crucially important to deal with reputable outstaffing companies.

Deciding Between IT Outsourcing and IT Outstaffing: Which Is Best for Your Needs?

Outsourcing vs Outstaffing is a topical issue in the IT sphere. The main difference between them is that outsourcing is about full-fledged project support, while our staffing provides hiring and retention of employees.

The choice depends on the situation. In general, if you are looking for long-term cooperation, it is better to consider outsourcing. In contrast, outsourcing is beneficial when you need only short-term workers to accomplish the tasks for a particular project and want to do it cost-effectively. Finding staff for software development can be challenging, but with Giraffe Software you will always find the best solution.

In conclusion

In this article, we expanded on outsourcing business strategy and outstaffing as business strategies. In general, both of these methods can be beneficial for your business, taking into account the specifics of your needs, goals, and projects. Properly organized and delegated project tasks can help you upscale your company and improve productivity, so choose only the best options for your business. Have some thoughts to share on this topic? Feel free to share.