Difference between outstaffing and outsourcing

Updated: Apr 7

Outsourcing and outstaffing: The meanings and main distinctions

Outstaffing and Outsourcing are two different models of cooperation with employees through an intermediary. It may sound a little bit confusing, but stay with us and let us tell you why you may benefit from using one of those.

Outsourcing is a term that means "outer source", and it refers to the transfer of certain functions or tasks from a third-party organization. This means that companies can seek out an intermediary company to fulfill their non-major staffing or service needs. Outsourcing usually involves legal and accounting support. It is a complete model that allows you to hire a team of programmers, designers, QA engineers, and project managers to remotely manage one or more of your development projects.

Outsourced teams can manage tasks such as app creation, website development, web development, and many more. An outsourcing model has the unique advantage that your chosen development team will handle every aspect of your project, from design to testing.

In most cases, you will only be able to communicate with the project manager of the outsourcing team. They'll give you updates and deadlines.

A company can add to its team individuals who are legal employees of another company--outstaffing one--through staff augmentation. Clients don't need to search for and choose the developers they want. The clients choose from pre-screened professional developers in the outstaffing company's talent pools. Your business can partner with such a company to get a worker or team for a particular task/project.

Outstaffing can be a good option to temporarily increase a company's development staff. Your company will manage the individual or the development team, but the payroll of the outstaffing company that you partner with is taken care of.

Outstaffing is similar to outsourcing but has distinct characteristics for engaging talent through outstaffing.

Let's compare the main differences between these two models and find out which one works best for you!

These terms are different because an outsourcing company does a specific business process without the involvement of the customer, and then receives payment based upon the result. Outstaffing is when an intermediary hires staff who collaborate directly with customers and receives a fixed salary, which does not depend on the product. There are other differences:

  • Workplace. Outsourcing is done at the company's location. Outstaffing is done in the customer's place.

  • Duration for project: Outsourcing is a long-term contract that can be extended, while outsourcing is usually temporary. The terms of outstaffing are determined by the details of each project.

  • Save on resources: Outsourcing does not require you to organize the workplace. There is less administrative work involved and no deductions from your salaries. Outstaffing eliminates the need for a recruiter and staff worker. You can also save money on benefits and salary deductions.

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If you are on the fence about your ability to outsource vs. outstaff, we can help you choose the most suitable model.


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