Outsourcing vs Outstaffing: What’s the Difference, Advantages & Disadvantages

While outstaffing your work can effectively solve your business goals, it has its own risks and drawbacks. You can also replace them and end up your cooperation when their work is done. Hiring the best outstaff developers is basically the same as hiring a new staff to work for you, except for lower rates and savings on recruiting expenses. Then they think of how much they’ll have to spend hiring quality in-house developers, which is probably not the best choice.

On the other hand, large and public companies tend to position themselves as in IT outsourcing, but only in the Product Development Services and Managed services areas. As time goes on even small companies reject “outsourcing” positioning using “custom software development” instead. As mentioned above, projects with a few skills gaps and with a managing team should be fixed with staff augmentation. For projects requiring a whole team and/or additional resources, outsourcing the software project rather than staff augmentation is often the best course of action. That is what distinguishes staff augmentation from IT project outsourcing as well as other third-party staffing options.

Pros of Outsourcing

For staff augmentation, the company brings people in, on a temporary basis, to work on specific tasks. The third-party company provides the client with a team of the most skilled and self-managed experts suitable for their IT project. They will integrate seamlessly into your IT department, master your business process, and invest all their time and resources to ensure your project is successful. Thus when hiring an outstaff agency, it is worth drawing attention to the working environment in these agencies. The more benefits that agencies provide, the more chances your developer will not leave the company (and your projects with it). With the outstaffing service model, you are in charge of managing the development process.

  • They successfully delivered an online presence that the client is more than satisfied with.”
  • The CEO reached out to us and we had a couple of virtual meetings to set forth the project requirements and other details.
  • In the case of outsourcing, it’s usually a project manager of the hired team (outside of your company) who directs and controls the full scope of work.
  • Increasingly, companies are turning to outside vendors both at home and abroad.
  • In this article, we analyze the pros and cons of both approaches to hiring third-party specialists with a pinpointed specialization.
  • Now, let’s move to the advantages and disadvantages of outstaffing.
  • PWC claims that, on average, outsource payroll saves 18% more than in-house staffing.

They believe that they’ll be able to communicate, manage and assign tasks to the remote staff, and manage their business at the same time. The dedicated teams may become an outsourcing development model after some time. It usually happens when the client is satisfied with the quality of cooperation. As it turns out, about 300,000 jobs get outsourced out of the US each year. Companies mostly outsource web development services, accounting, and marketing.


Outstaffing is an offshore development model where the client hires a contractor from a software outsourcing firm to carry out development tasks. The employee works full-time on their project but is paid by the third-party company. Outstaffing is a type of offshore web development where a customer hires a contractor from a software outsourcing company to carry out development tasks. These models speed up the development process, and can also help you save time and money.

The confusion arises from the fact that both models offer a workforce for your business. The major difference is that the outsourcing team is more independent while the outstaffing team depends on your management skills. If you’re on the fence about your ability to outsource vs outstaff, ProCoders can help you choose the information technology outsourcing services. We can work with your team as an outsourced or outstaffed resource. We’d love to talk to you about your needs today and create a proposal specifically for your business needs.

What is the main difference between software development outsourcing and outstaffing?

To ensure professionals are hired, additional testing or interviews may be necessary, but at an added cost. In this partnership, the customer company hires specialists from a third-party organization to perform a project or specific services and tasks. Still, it takes over the distribution of functions and controls the work.

difference between outsourcing and outstaffing

But what if you have a tech team that misses a specialist with certain skills? Let’s see its pros and cons and what difference it may bring to your business. The outsourcing agency assigns a dedicated project manager that acts as an intermediary between the client and the developer.

Budget, Time, and Time Zone Differences

In that case, outsourcing is the most suitable option for you. On the other hand, if you have already set up some IT processes and have everything you need to manage and work with a remote team, feel free to choose outstaffing. However, do not forget that each case is unique, so we recommend that you first consult with specialists. Depending on your company’s needs, you can choose one or both of the models for upcoming programming projects. Outsourcing and outstaffing are two of the most widely used IT models nowadays.

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ProCoders answered the call with an IT Staff Augmentation Services proposal that allowed the CTO management team at AxisPoint to manage the programmers ProCoders provided directly. This way, outstaffing company AxisPoint/VSimple saved both money and time on hiring. In this case, your IT services vendor can quote you what it will cost to work with their IT resources for the duration of your project.

Outstaffing vs Outsourcing: Key Differences

Understanding the distinctions between outsourcing vs. outstaffing is crucial in making informed decisions and effectively managing resources. Outsourcing refers to the transfer of specific business operations or procedures to outside service providers. These specialized service providers provide the requested services on the client’s behalf.

difference between outsourcing and outstaffing

In offshore development, companies hand over their work to external vendors to meet their business needs. On the other hand, outstaffing involves hiring dedicated developers or teams. The distinction between these two approaches lies in the level of control and flexibility they offer for the company’s projects. As we already said, both outsourcing and outstaffing have their pros and cons. Outstaffing might be a perfect solution for those seeking more control over everyday tasks.

Outsourcing vs Outstaffing IT Models: What’s the Difference?

Although an outstaffing IT model is comparable to outsourcing, engaging talent through outstaffing has different characteristics. Imagine that you have decided to build your own house, and your friends or family have volunteered to assist you. The project has been underway for some time, but you find out that you don’t have anybody who knows how to work with wood. You go to a local construction firm and sign an agreement with a carpenter who will now work with your team. You terminate the collaboration once they’ve completed their task, then continue doing what you need to do.

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