Outsourcing and Outstaffing: what's the difference?

Outsourcing and Outstaffing: what's the difference?
4 min read
22 September 2022

To save their money, large companies are increasingly using outsourcing and outstaffing in practice. The English language even has a new verb to bangalore, which means "dissolve the IT department and transfer the business to another company." Keep reading this article to find out what are the differences between these two types of hiring employees, and what are their advantages and disadvantages.

Both concepts denote cooperation with a specialist who is not a representative of your company. However, despite the similarities, the differences between outsourcing and outstaffing are more than significant.

Outsourcing is the transfer of job functions to a third-party company or person who is not directly related to your organization. As in the case of IT professionals from other countries: you enter into a contract for the provision of services with specialists (a company or an individual), you forget about the equipment jobs, taxes, and insurance, and you pay only a salary (often lower than that of full-time employees ) and you get service and reports.

Subcontracting is required when:

  • reduce the administrative burden;
  • avoid high taxes and salaries;
  • connect additional resources for seasonal work.Outsourcing and Outstaffing: what's the difference?

Find a temporary vacation replacement for an existing employee

Outstaffing - a type of "leasing" of personnel from a third-party company. The mechanism is as follows: you go to an intermediary (mostly recruitment agencies) and make a request: what level of staff, for how long, and why you need it. The recruitment agency searches for candidates and concludes an agreement between you for the provision of services. You pay a recruiting agency a fixed amount for each employee and you assign hired employees to perform certain tasks.

In most cases, outsourcing is used when:

  • one big problem needs to be solved, and there are not enough full-time employees for this;
  • want to avoid legal problems when hiring foreigners;
  • wants to save on taxes and wages.

To get to know more about the difference between outsourcing and outstaffing, imagine the situation when you urgently need to move to another place. There are two different choices. It can be taken a taxi or renting a car. Staffing starts from the moment you rent a car. The company you contacted picks up a car according to your requirements: model, engine size, horsepower, receives the money, and expects you to return the car to them on time.

Study the standard outstaffing contract model:

  • the client provides everything necessary for work (refuels, chooses the road);
  • the client pays the money to the hiring company (instead of leaving the money in the glove compartment of the car);
  • the client requires the performance of only the agreed services (and does not carry the cabinet to the village in a car).

Outstaffing gives more freedom, because the client does not acquire a specific solution to the problem, but a “tool”, with proper use of which, for the same money, you can do 3 times more. However, with great freedom comes greater responsibility: the client will have to create all conditions for the work, management, and control of employees.

Outstaffing and outsourcing - are there differences or not? So, having considered outsourcing and outsourcing in detail, we can conclude that these services provide companies with the necessary support. Without outsourcing services, some companies will cease to exist, mainly due to competitive pressures.

As we discovered the concepts of outsourcing and outstaffing, they have several meanings and different types of activities. An important difference is the cost. What is the difference between outsourcing and outstaffing in this area? Every company strives for high-quality workmanship while reducing financial investment. So, the improvement of personnel is the most profitable type of service. The cost of payments and salaries is much lower than outsourcing. In this case, there is another advantage - low time costs, since outsourcing companies work constantly.

If you feel that you need outstaffing, then it's time to use the services https://dinarys.com/it-outstaffing-services.

Alex 10K
Joined: 4 years ago
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