top of page

Outstaffing vs. Outsourcing: Which Is Right for Your Business?


Table of content




Introduction


In today's dynamic business environment, outstaffing stands out as a versatile remote recruiting strategy, where a provider equips you with specialized talent or a team tailored for your project's duration. This approach guides and integrates this "leased" expertise directly into your operations, while the provider handles the details of employment, legal frameworks, and payroll.


Here's how outstaffing companies and outsourcing services offer unique benefits to businesses looking to scale and innovate.



What is an outstaffing model?


Outstaffing represents a strategic model where a business partners with an outstaffing agency to "rent" skilled professionals who integrate into the in-house team while being employed by the agency. This approach offers several advantages:


  • Direct control and integration: Unlike traditional outsourcing, outstaffing companies allow businesses to maintain direct oversight over the outstaffed team, ensuring projects align closely with company standards and objectives.


  • Cost efficiency: Outstaffing services often result in significant savings, as businesses can bypass the overhead associated with hiring full-time staff, including benefits, taxes, and office space.


  • Flexibility: Outstaffing companies offer the ability to scale teams up or down based on project demands, providing a level of agility that's invaluable in today's fast-paced market.



Outstaffing example


Imagine your digital marketing agency has a big project to build a website, but you're short on coders who know the latest web design tricks. Instead of hiring a new person full-time, you decide to bring in a specialist just for this project. That's where outstaffing comes in.


  • You reach out to a company that has the tech talent you need. 

  • They have a web developer who's exactly the right fit for your project. 


This developer works with your team just like they're one of your own, but they're still employed by the other company.



Outstaffing is best suited for



Outstaffing is best suited for


  • App development: Digital startups or companies looking to develop or update their mobile applications might not have the necessary expertise in-house. Outsourcing app development to specialized firms can accelerate development. They can access expert knowledge of the latest technologies, and adherence to best practices in UX/UI design

  • Website redesign: Companies looking to overhaul their online presence might outsource website redesign projects to agencies with specific expertise in web development, SEO, and digital branding. This allows companies to focus on their core operations while ensuring their website is optimized for user experience and search engines.

  • Cloud computing and IT infrastructure: Digital companies often outsource the management of their IT infrastructure and cloud services to providers like AWS, Google Cloud, or Microsoft Azure. These providers offer scalable solutions that can be customized to a company's needs, reducing the need for in-house IT staff and infrastructure.

  • Cybersecurity: With the increasing importance of data security, digital companies outsource their cybersecurity needs to firms specializing in protecting against cyber threats. This ensures access to top-tier security experts and the latest security technologies without the overhead of developing this capability in-house.

  • Content creation and marketing: Digital companies, especially those in the e-commerce, tech, and service sectors, often outsource content creation, SEO, and social media marketing to specialized agencies. This allows them to leverage expert knowledge and insights to drive engagement and sales, while their internal team focuses on product development and customer service.



What are the key components of outstaffing?



What are the key components of outstaffing


  • Talent search: Outstaffing starts with finding the right people for your project. The outstaffing firm does the recruiting, you choose the best fit.

  • Project leadership: You guide the work of outstaffed professionals, setting what needs to be done and when.

  • Handling paperwork: The outstaffing firm takes care of contracts, payroll, and legal stuff, so you don't have to.

  • Easy communication: Use tools like project management software to work smoothly with your outstaffed team, no matter where they are.


Pros of Outstaffing 



Pros of Outstaffing 


  • Access to a broader skill set: With outstaffing, you're not limited to the skills available within your immediate geographic location. You can tap into a global talent marketplace, ensuring you always have access to the specific skills needed for each project.

  • Control over projects: Just like having a project manager who brings in a freelancer for a specific task, outstaffing lets you have external experts work under your guidance. They're part of your team for the project duration, giving you the power to steer the project exactly how you see fit.

  • Cost savings: If you outstaff your team, you will work with great talent without spending too much. Also this way, you save on things like office space and taxes, making things easier on your wallet.

  • No HR responsibilities: Going with outstaffing means less headache for you. The outstaffing team takes care of all the hiring paperwork and payroll and makes sure everything's by the book. Thus, your core team can dedicate more time to innovation and strategic planning. This focus can lead to the development of new products or services and improve your competitive edge in the market.



How does outsourcing work?



How does outsourcing work


  • Identification of outsourcing needs: Companies first identify functions that are either too costly to manage in-house, require specialized knowledge, or are non-core to their business operations.

  • Selecting a service provider: The business then selects a staff top augmentation service provider with the expertise and capability to handle the outsourced functions. This selection is based on several criteria, including cost, reputation, and the provider's ability to meet the company's needs.

  • Contracting and agreement: Detailed contracts and service level agreements (SLAs) are negotiated and signed, outlining the scope of work, performance metrics, costs, and timelines.

  • Transition: The company transfers the agreed-upon tasks or processes to the outsourcing provider, which may involve transferring assets, staff, or information.

  • Ongoing management and review: The company and the outsourcing provider engage in continuous communication and review processes to ensure the outsourced functions meet the agreed standards and objectives.


Outsourcing example


Imagine your digital marketing agency is swamped with work. You've got campaigns to run, and content to create, and now a client wants a complex mobile app developed—a task your team isn't equipped to handle because it's outside your usual scope of work. This is where outsourcing comes into play.


  • You decide to outsource the app development project. 

  • You find a company that hires top app developers at the best price

  • You hand them the project details, agree on the goals, timeline, and budget, and they get to work. 

  • They manage the app development from start to finish. 


You don't have to worry about the day-to-day tasks involved in creating the app; your focus stays on your agency's core tasks like crafting marketing strategies and managing client relationships.


Outsourcing is like delegating a big task to someone outside your team who can do it better and faster, allowing you to stay focused on what you do best. It's handing over the entire project to experts, so your business can grow without spreading your internal resources too thin.



outsourcing work


Types of outsourcing


  • Onshore outsourcing: Refers to outsourcing tasks to a provider located in the same country. This model minimizes cultural and language barriers, making communication and collaboration easier.

  • Nearshore outsourcing: Involves outsourcing to providers in nearby countries, often sharing a similar time zone or cultural background. Nearshore outsourcing strikes a balance between cost savings and ease of collaboration.

  • Offshore outsourcing: This model outsources work to companies in distant countries, usually to capitalize on lower labor costs and access to a global talent pool. While it offers significant cost savings, it may also present challenges such as cultural differences and communication barriers.


Benefits of outsourcing


  • Cost reduction: Outsourcing can significantly reduce operational costs by leveraging lower labor costs in other regions and countries Like hiring in:

  • Access to expertise: Companies gain access to world-class capabilities and expertise from the Caucasus without the need to develop them in-house. You can utilize the best employer of record services and get a high-quality remote workforce at the best price. 

  • Focus on core business: Outsourcing non-core activities allows businesses to concentrate resources on strategic areas that drive growth and competitiveness.

  • Scalability: The model offers flexibility to scale operations up or down based on business requirements without the constraints of fixed capacities.

  • Risk management: Outsourcing tasks to regions with a strong pool of talents like Georgia, Armenia,  Azerbaijan, Egypt, and Turkey can also serve as an effective risk management strategy. You diversify your operational base across different geographical locations and mitigate risks associated with relying solely on the market or operational hub.


Disadvantages of Outsourcing


  • Loss of control: This can lead to challenges in ensuring that the work meets the company's standards and expectations, as the outsourcing provider may have different procedures and quality benchmarks.

  • Communication challenges: Outsourcing, especially offshore, can introduce communication barriers due to differences in time zones, languages, and cultural norms. These barriers can lead to misunderstandings, delays in project timelines, and inefficiencies in the workflow.

  • Dependency on remote staffing companies: Relying heavily on external providers for critical functions can create dependency, making the company vulnerable if the supplier faces problems such as financial instability, changes in management, or shifts in business strategy that affect their ability to deliver.

  • Risk to confidentiality and security: Outsourcing operations, particularly those involving sensitive data, can expose a company to risks around data security and confidentiality. But, the best IT staff augmentation services will keep you away from potential threats. 


Outsourcing is best suited for


Tech and App Development


  • Suited for startups lacking in-house development teams.


Website Design and SEO


  • Perfect for companies needing a polished online presence.

  • Great for businesses aiming to improve search rankings without a full-time SEO team.


Customer service


  • Beneficial for businesses requiring 24/7 support without the overhead.

  • Useful for companies looking to offer multilingual support.


Digital Marketing


  • Fits companies seeking to tap into advanced marketing strategies.

  • Ideal for expanding reach without expanding in-house teams.


Cloud Services Management


  • Suited for businesses wanting to leverage cloud technology without the expertise.

  • Good for companies looking for scalable IT solutions.


Cybersecurity


  • Necessary for firms needing robust security measures.

  • Best for businesses without specialized in-house cybersecurity personnel.


Content Creation


  • Excellent for brands wanting high-quality content without a full-time creative team.

  • Useful for projects requiring diverse content types.


Legal and Accounting Services


  • Suitable for small businesses needing expert advice without the cost of full-time staff.

  • Ideal for navigating complex regulations or financial landscapes.


HR and Recruitment


  • Effective for companies looking to streamline hiring processes.

  • Great for businesses seeking specialized talent across the globe.



Why Businesses Decide to Outsaff and Outsource: 6 Reasons


Cost savings & compliance


An Employer of Record takes on the responsibility for employee payment records, ensuring that all local tax and employment laws are adhered to. This not only reduces the administrative burden on the company but also mitigates the risk of non-compliance.


Quick project start-Up


Similar to the benefits of outsourcing and outstaffing, using an Employer of Record service allows companies to start projects quickly, with the EOR handling all aspects of employment, from contracts to payroll. This is invaluable for businesses looking to execute projects in regions where they lack local HR infrastructure.


Payroll management


Both outsourcing and outstaffing models streamline payroll processes, especially when hiring freelance or remote developers. Outstaffing firms often take on the role of employer of record, managing payroll, taxes, and compliance, reducing the administrative burden on businesses.


Flexibility


Whether it's EOR in Europe, Employer of Record in the Caucasus, or any other region, provides businesses the flexibility to operate in multiple markets without the need for a physical presence or in-depth knowledge of local employment laws.


Access to global talent


 An EOR enables businesses to legally hire employees or contractors in countries with needed expertise, such as tech talent in Employer of Record Georgia or other creative professionals in Turkey. This broadens the talent pool available to businesses, ensuring they have access to the best skills worldwide.


Enhanced operations


Utilizing Employer of Record services in regions such as Europe, the Caucasus, Egypt, Serbia, and beyond allows companies to adapt to market demands and operational needs without the constraints of establishing local entities or navigating complex international labor laws. 



Outstaffing vs Outsourcing: What are the differences?


Purpose 


Outstaffing is a preferred option when a company needs to extend its existing team with additional resources. The purpose here is to augment the in-house team with external professionals who contribute their expertise while being managed by the company's leaders.


Outsourcing is suitable when a company needs to completely hand over a project or specific business operations to an external provider. It's ideal for tasks outside of a company’s core competencies or when additional expertise is required that the current team lacks.


Control


Outsourcing offers less direct control over the day-to-day operations of the outsourced function or project, as the external provider manages the work and makes decisions within the scope agreed upon.


Outstaffing allows for significant control over the work process, as the external staff integrate into the in-house team and follow the direction of the company's project managers or leaders.


Team management


Outsourcing means the external provider is responsible for managing the team that works on your project. You communicate your needs and goals, and they handle the rest, including the allocation of tasks and oversight of the project’s progress.


Outstaffing requires your company to manage the external professionals as if they were your employees. They become part of your team, attending meetings and working alongside your staff, with you overseeing their contributions and integration.


Cost


Outsourcing can be more cost-effective for projects requiring a complete solution from start to finish, especially when leveraging global talent pools in countries with lower labor costs. However, it might involve higher rates due to the comprehensive nature of the services provided.


Outstaffing often results in cost savings by avoiding the overhead associated with full-time employees, such as benefits, office space, and equipment. You pay for the professional's time and expertise, usually at a lower rate than if you were to outsource an entire project.


Feature

Outstaffing

Outsourcing

Direct control

Yes

No

Team integration

Yes

No

Reduces full-time employment costs

Yes

Depends

Access to wide expertise

No

Yes

Focus on core activities

Yes

Yes

Risk managed by you

Yes

No

Requires internal project management

Yes

No

Geographical flexibility

Yes

Yes


5 Common challenges in IT Outstaffing and ways to overcome them


Time zone differences


Challenge


Coordinating work across different time zones can be tricky. When part of your IT outstaffing team is starting their day, another part might be ending theirs.


Solution


Find common working hours for everyone, even if it's just a couple of hours. Use tools that allow for work to continue asynchronously, ensuring that tasks keep moving forward even when everyone isn't online at the same time.


Communication and language


Challenge


Clear communication is essential, but differences in language and cultural nuances can lead to misunderstandings.


Solution


Opt for straightforward, clear language in all communications. Regular video calls can help foster a better understanding and relationship among team members, ensuring everyone is on the same page.


Intellectual property protection


Challenge


Sharing sensitive information with an external team raises concerns about intellectual property protection.


Solution


Ensure that all contracts include clear clauses on intellectual property rights and data protection. Working with reputable partners who understand the importance of these protections is key.


Misaligned expectations


Challenge


There can be a gap between what you expect from an outstaffed team and what they deliver, leading to project delays.


Solution


Begin every project with a detailed briefing. Regular check-ins and updates can help realign expectations and keep the project on track.


Selecting a reliable provider


Challenge


With so many options available, choosing the right outstaffing partner is crucial but can be overwhelming.


Solution


Research potential partners thoroughly. Look for those with strong reviews, relevant experience, and a track record of reliability. Starting with a smaller project can help assess if the partnership is the right fit.



The Cost of IT Outstaffing Services


Outstaffing in the information technology (IT) sector has become a prevalent strategy for companies looking to optimize costs while maintaining or enhancing the quality of their services. This approach involves hiring external staff, often from different countries, to perform specific tasks or projects.


The cost of IT outstaffing services can vary widely depending on several factors, including the location of the outstaffing company, the expertise level of the professionals involved, and the complexity of the projects.



Outsource and Outstaffing destinations in the Caucasus


The Caucasus region is distinguished by its strategic location and robust IT sector. Countries such as Georgia and Armenia have become notable for their vibrant tech communities, offering a blend of quality and affordability:


  • Georgia: Known for its favorable business environment and proficient IT professionals, especially in web and software development.

  • Armenia: Stands out for advanced tech like AI and blockchain, supported by tax benefits and competitive costs.

  • Azerbaijan: Shines in mobile app development, cybersecurity, and data analysis.

  • Turkey: Offers a broad range of development skills, strategic location, and strong infrastructure.



Hire top talents in the Caucasus


Hire Freelancers


Finding and hiring freelancers with us is designed to be as simple as online shopping. We prioritize clarity and ease:


  • Scalable profiles: Every freelancer’s profile is a clear window into their professional world, detailing their skills, past projects, and what they bring to the table. This transparency helps you quickly decide if they’re the right fit for your project.

  • Upfront pricing: No guesswork here. Each freelancer’s rate is displayed upfront, helping you budget effectively for your projects without any surprises.

  • Effortless search: Our platform is built with you in mind, featuring an intuitive search function that lets you filter candidates by their expertise, experience, and more. Finding the perfect fit for your project is just a few clicks away.


Hire Remote Employees


For those projects that require a collective effort, we specialize in putting together remote teams that are custom-fit for your specific needs, ensuring a seamless integration into your projects.


  • Tailored teams: Whether you need a dedicated web designer or a team of PHP developers, we match you with professionals who have the exact skills you need. Our approach considers your project's unique requirements to build a team that complements your in-house efforts perfectly.

  • Inclusive solution: Managing a remote team is made easy with our comprehensive support system. We take care of everything from payroll to ensuring your new team members blend in smoothly with your existing operations, allowing you to concentrate on what matters most - your project's success.

  • Money saving: You can access all the benefits from just 200 EURO.



Start growing your business today

What types of remote dedicated teams can you hire?


Tech teams


Hiring a dedicated development team with Gegidze means bringing on board more than just coders. Our developers are not just technically proficient; they bring a creative and strategic approach to every task, ensuring your project benefits from speed and precision.  With us, you can hire:


  • Dedicated Java developers

  • iOS developers

  • Laravel developers

  • Angular developers

  • Android developers

  • PHP programmers

  • PHP developers

  • WordPress developers

  • React Native developers


Marketing teams


Our digital marketing teams in Georgia are creative minds and technical experts, all collaborating to elevate your brand's digital presence. With us, you can hire:


  • Content writers

  • SEO managers

  • Digital marketing managers

  • PPC experts


Design teams


When it comes to design, our dedicated teams in Georgia offer more than just creativity. They are part of a highly respected community of design professionals, leveraging global insights and trends to deliver exceptional results. 


  • Web designers

  • UI/UX designers

  • Graphic designers


Business operations teams


Our teams in Georgia bring more than just operational efficiency; they offer fresh perspectives and focus on innovation and proactive problem-solving. 


With us, you can hire:


  • Project managers

  • Customer support specialists

  • Data analysts

  • Administrative assistants



F.A.Q


What does outstaffing mean?

Outstaffing is when a company hires employees through a third-party provider, who then work exclusively for the client company. The third-party provider handles administrative tasks like payroll and HR, while the client retains control over the employees' daily tasks.

What is outsourcing?

When is it better to choose outstaffing for a software development project?

 What's the difference between outstaffing and outsourcing

How do I ensure data security when working with outsourced teams?




Comentários


bottom of page