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Outstaffing vs Outsourcing: What to choose?

Outstaffing vs Outsourcing: What to choose?

The importance of a flexible business model in 2019 cannot be stressed enough. The ever-changing market forces companies to make instant decisions, try out new strategies and technologies in order to succeed.  This is when outstaffing and outsourcing come in handy.  From product development to sales and marketing, there is a variety of benefits of taking this approach.

Most of the modern companies turn to outstaffing or outsourcing at some point of their existence. For instance, the majority of startups have it hardwired in their business model from the very start to save on payrolls and get access to a larger talent pool.  For others, it’s a great way to execute expansion, improve existing service or try out experimental ideas.

If you are looking into one of these options, there are certain things you should consider before diving deep into it. First of all, which one to choose? Although both means pursue one objective they differ on a certain level and meet different needs.

Outsourcing VS Outstaffing

Outsourcing means hiring an additional workforce to perform services that traditionally were performed in-house by the company’s own employees. Basically, it’s a project-based business model when you hire a whole division, run by an external project manager, to complete certain tasks. In this case, you don’t spend time managing the team and your project manager acts as a link between you and the people who actually do all the work.

On the other hand, outstaffing is a term used to describe remote employment. In this case, your company creates a contract with an outsourcing agency, who then provides you with remote employees that will work as a part of your in-house team. The agency acts as a legal employer, it provides wages, bonuses and needed equipment, while a client’s company provides a worker with tasks and assignments.

Pros and Cons of Outstaffing

Pros:

  1. Low cost

This is one of the main reasons companies turn to outstaffing in the first place. Your vendor is responsible for the payrolls, sick leaves and bonuses + you don’t need to spend money on arranging a workplace and taxes.

  1. Flexibility

If you are looking into some radical strategic choices, but unsure if this is the path you need to follow, outstaffing is here to help. Experiment with professions and the number of workers to find that golden mean. It’s much easier to alter a contract with an agency than going through that endless hiring/firing process.

  1. Access to any team member

Unlike outsourcing, outstaffing gives you full control over your employee, as he works as a part of your in-house team. Direct communication makes this business model almost indistinguishable from traditional remote employment.

How to know when you should outsource your business?

Cons:

  1. You are in charge

Even though you avoid a lot of legal duties, you still have to manage your outstaffed employees. You are in charge of their tasks and assignments and the final result is your area of concern.

  1. Miscommunication

As with any remote worker – communication is the key to success. Make sure to carefully choose and shape communication channels, so that your new worker can fit in with your team.

Pros and Cons of Outsourcing

 Pros:

  1. Less work

Trusting a whole load of work to a team of professionals and having them being responsible for the final result gives you a whole lot of time. In this case, you can focus more on core functions and ensure that your company thrives and succeeds.

  1. Higher Returns on Investment

Not only you can save money with outsourcing. Try using the saved resources efficiently. Invest them smarty to get higher sales and increase revenue.

  1. Larger talent pool

Companies are often limited to available specialists in the area. With outsourcing, you can get access to a whole range of top-notch professional around the world.

Cons:

  1. Lack of control

Monitoring outsourced staff isn’t easy, you only have your project manager to rely on. Making corrections on the go can be challenging as miscommunication and inaccuracies may occur.

  1. Expensive (in comparison to outstaffing)

Hiring a whole team is significantly more expensive than outstaffing a couple of remote employees. Also if the project scope isn’t clear enough costs may become noticeably higher than you previously anticipated.

  1. Intellectual Property concerns

Make sure you don’t leave yourself unprotected. Choose a reliable outsourcing company and pay additional attention to the contract. Don’t forget to check the IP policy of the country you are outstaffing from. It’s always best to exercise caution when your business involves sensitive data.

What is best for your business?

When deciding between outstaffing and outsourcing it’s vital to clarify your needs first. If your company requires a whole project to be completed (e.g. development) it’s better to look into outsourcing options that will also give you professional expertise to oversee the work. But if you already have the foundation to manage a remote employee/team and just need additional help then you should rather look for outstaffing services. This is often the case when companies want to improve their customer service or facilitate back-office processes. At Zelh we deal with absolutely every aspect of the hiring process, to include executing final contracts along with coordinating with your HR department, figuring all tax liabilities, instituting medical and workers insurances, and even