In today’s business environment, companies seek to improve efficiency and reduce costs by outsourcing various tasks. Some of the most popular models are outstaffing and outsourcing, each with its own characteristics. Understanding the differences between these approaches is especially important for companies operating in high-tech areas such as IT. For example, IT outsourcing Poland companies are becoming increasingly popular, attracting foreign companies due to competitive prices and highly qualified specialists. In this article, we propose to analyze the key differences between outstaffing and outsourcing to help choose the right tool to achieve business goals.
What is Outstaffing?
Outstaffing is a type of cooperation in which the customer company rents an employee from the contractor company. Formally, the customer receives the necessary team members and manages the work process, but does not waste time on recruiting, documentation, or calculations, because this is done by the contractor company.
Key Advantages of Outstaffing
Despite its relatively low popularity, outstaffing offers many advantages for business:
1. Avoiding labor disputes.
Since the employee remains on the staff of the outstaffing company, the customer does not have to conclude a new employment contract and therefore avoids possible labor disputes and maintaining personnel documentation.
2. Simple personnel management.
The employee’s personnel issues, for example, registration of vacations or sick leaves, will be resolved by the outstaffing company. The fikfap customer will not bear the costs of social contributions or business trips, or be involved in providing certificates or reports. This reduces the burden on the accounting department and the number of operational tasks of the HR department.
3. Optimization of resources and expenses.
In outstaffing, the customer no longer needs to calculate salaries, calculate taxes and generate reports, because this is done by the contractor company. The customer can allocate resources to strategic tasks, rather than deal with bureaucratic issues. Thus, management can focus on project development, employer branding, and improving working conditions for key personnel.
4. Maintaining control over processes.
Outstaffing employees are involved in work at the same level as other team members and therefore are completely subordinate to the management of the customer company. Working on outstaffing terms, the company retains full control over work processes, which distinguishes this service from outsourcing.
5. Flexibility to change.
Thanks to outstaffing, a company can easily adapt to unexpected challenges in the market, prepare for seasonal work, and master new areas of work. The company is protected from staff bloat, and therefore will not face benching or forced layoffs of employees. Also, among outstaffers, you can find rare specialists, for whose retention and training you need to allocate a large part of the budget.
The Main Disadvantages of Outstaffing
Outstaffing has a number of advantages, but we cannot ignore the disadvantages of this service:
- Questionable reputation of contractors.
To avoid financial losses, you should study the history of the outstaffing company in advance. The contractor must have all the legal rights to provide outstaffing services, as well as good training of specialists who will work for the customer.
- Organization of work of outstaffers.
Outstaff employees may have lower motivation compared to full-time employees. A clear onboarding program for freelancers, as well as a transparent evaluation system for the results of their work, can help them integrate into the processes. The customer needs to organize the work of the outstaffing team in advance, taking into account the possible difference in time zones, as well as the team’s communication methods.
What Is The Difference Between Outstaffing And Outsourcing
Both types of cooperation have common features because they are designed to optimize work and use the company’s resources profitably. However, there are key differences between them:
- Project goal.
Outstaffing is often used for specific work (IT services, Big Data analytics), as well as in projects that require the development of new solutions for the market. Outsourcing is associated with functions that are not core for the customer’s company (legal or financial sphere, transportation, service maintenance).
- Payments.
Outstaffers are no different from full-time personnel in terms of payments. Outsourcing cooperation is paid according to the contract, which can be either piecework or monthly payment.
Outsourcing and outstaffing are often confused, but if outstaffing resembles the rental of workers, then outsourcing is the transfer of an entire function or business process of an enterprise.
Outsourcing is often used for non-core functions (accounting and legal activities, cleaning services, personnel records management), outstaffing is usually chosen to find highly specialized specialists.
The most popular type of labor relations, in which new employees are recruited to the staff, entails significant costs for the business. The search for candidates can last several months, and the retention and development of employees also require an additional budget. In cases where organizing an in-house team is risky, outstaffing helps to optimize resources and reduce costs.
How to Choose The Right Model For Your Business?
When a business faces the choice between outstaffing, outsourcing, and in-house, it is important to assess the needs of the business and the goals set. You should contact an outstaffing company if the goal is to launch a complex project that requires specific experience and knowledge of external specialists. IT outsourcing will help minimize labor disputes and expenses, as well as attract resources for secondary business processes. Attracting in-house workers should be as consistent as possible with the long-term development strategy, so it is worth critically assessing your capabilities and the strength of your HR brand for hiring new employees.
Wrapping It Up
The choice between outstaffing and outsourcing depends on the needs of the company, the level of control it wants to maintain, and the scale of the tasks. While outstaffing allows you to integrate external specialists into the staff, outsourcing allows you to fully delegate projects or processes to professionals. If you are looking for a reliable IT outsourcing service provider in Poland, we recommend paying attention to the N-iX company. N-iX has been on the market for over 20 years, it cooperates with Fortune 500 companies.
