An In-depth Look of the IT Outstaffing Model

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IT outsourcing didn’t start off with such a good reputation. While people were attracted by the lower costs, there was a lack of motivation, quality control, and general business procedures. Budgets were increased unexpectedly, and deadlines were often missed.

Outstaffing became the new approach to remote hiring. Although it is still a form of outsourcing, the client has far more control than with outsourcing as companies are able to maintain control of the remote workers. Outstaffing is frequently used by SaaS businesses as well as tech startups, mid-sized companies, and international corporations.

What Is Outstaffing

Outstaffing is a form of indirect employment. An outstaffing provider takes care of matching talent, retaining, managing the legal side of employment, including salaries and even provide the workspace and equipment needed.

Different parts of the world have different terms for outstaffing, In Europe, it is known as offshoring or subcontracting while in the states it is referred to as contracting.

The Main Advantages of Outstaffing

The first benefit is the ability to fill vacancies when there is a shortage of tech talent. It is an ideal solution for companies who need to expand their team in a speedy manner but at the same time, maintain control of the team and the project. In a perfect world, the company already has specialist IT staff in order to manage the team, and so the outstaffing company can fill in the gaps. If this isn’t the case, a company can also hire a project manager from the outstaffing company.

The key difference between outstaffing and outsourcing is that when outstaffing, the company retains control over the staff, deadlines, and product quality. On the contrary, when outsourcing, it is the outsourcing company that takes control of the planning all the way through to the delivery of the product. On the downside, it is the company that takes full responsibility for the product.

The company, however, is not responsible for paying salaries or taxes, this is down to the outstaffing company. Generally speaking, rates are lower for outstaffing than outsourcing.

Using IT Outstaffing to Improve Development Costs

Taking on a new project can often involve expanding your location. This will require other staff such as lawyers, office managers, even cleaners. When outstaffing, your team can grow but your location doesn’t have to because the staff can work remotely.

The main costs associated with outstaffing are the developer’s salary and the fee for the outstaffing company.

What Is The Process of Working With An IT Outstaffing Company?

Step 1- Initial meeting to discuss the needs of the company, the outstaffing company explains what roles they can take on.

Step 2- A meeting with your team to prepare them for working with outstaffed developers

Step 3- The company must prepare any documentation that will explain their business processes and team structure. With this, the outsourcing company knows what kind of talent is required both in skills and in cultural fit.

Step 4- The outstaffing company will carry out pre-screen phone calls

Step 5- The company receives suitable CVs from the outstaffing company

Step 6- The company provides candidate feedback and the outstaffing company then sets up interviews to be held with the company’s managers/tech leads

Step 7- When a candidate accepts a job offer, they are prepared by the outstaffing company, including hardware, software, onboarding and contact with the company’s HR

Step 8- While the candidate is performing their duties, the company will have regular contact with the outstaffing company in case of any doubts and to provide feedback

The Distribution of Roles In IT Outstaffing

There are 6 key roles in an IT outsourcing company:

  • Recruitment Team- they will plan for communication with the company and manage the recruitment process.
  • HR Team- The job of HR is to allow for performance reviews, focus on retention and discuss staff compensation.
  • The Client- This is an ongoing process that requires both parties to be involved, remote staff needs to be managed, feedback from both sides is given and they must control the progress of the project.
  • Legal/Finance Team- Handle payrolls, contracts, taxes, and fees. They must also prepare any legal documentation required by governments.
  • Environment Team- Their responsibility is to manage the working location.
  • IT Team- The IT team will make sure that the new staff is prepared with the hardware and software needed for the project. They are also responsible for the maintenance of the internet connection.

Selecting The Right IT Outstaffing Company For You

It is important to confirm the level of experience an IT outstaffing company has. If a company has between 5 and 10 years of experience, you know they will have had enough time to establish a solid database of candidates.

If an outstaffing company has certifications or other types of recognition, you can be confident of their high standards and that they are dedicated to their employees.

Some people like to turn to social media to read reviews. While this is fine, you will get a much better feeling for an IT outstaffing company when you speak to them directly. Focus on their communication skills and how well they are able to answer your questions.