What Is Outstaffing & How to Benefit from It?

Adding date: 29.03.2018 | Ukraine

The global market size of outsourcing services including the outstaffing hiring model stands at about $88.9 billion in 2017. Outstaffing is one of the popular remote resource hiring models commonly adopted in the domain of information technology, especially in the software development, in the present day marketplace. It offers numerous great benefits to the enterprises located across the globe.

“It offers 3C benefits – Control, Cost and Consistency,” says Cyril Samovskiy, the founder and CEO of Mobilunity - Outstaffing Services Company. “Outstaffing offers greater control, over 60% reduction in the development cost and full consistency in the development workflow due to the dedicated talents” further added by Samovskiy. 

What Is Outstaffing?

Outstaffing is a type of remote hiring model in which a dedicated team of IT professionals, such as web developer, software developer, software tester or any other resource is provided by a third party contractor as a remote resource to the main client for its IT project.

The dedicated team or even a single dedicated web developer works dedicatedly on the project of the recruiting client for the period of a contract. The hiring client will have a full control over the IT team or an individual hired for his/her project for the contract period. The client can have a discussion, updates, phone calls and any other interactions with the resources of the dedicated development team to complete the project successfully.  

This remote model of hiring consists of the following major procedures:

  • Recruiting process: It consists of the selection of profiles of talented resources, short listing of profile based on the screening test, conducting a short technical interview and presenting recruitment/offer letter 
  • On-Boarding Process: This process consists of an allocation of sitting space, setting up of development environments, provisioning of communication, tracking and monitoring tools
  • On-Going Process: This process comprises regular discussions, project tracking, issue resolution, fulfilling contractual obligations and accomplishing the assignments

What Are Remote Hiring Models?

Remote hiring has become an integral part of HR departments of almost all companies across the globe. According to the Future Workforce Report 2017, only 1 out of 10 managers believes that the physical presence of the resource in the office is important. Owing to such considerations, the remote hiring models have taken strong roots in the past couple of decades. The main remote hiring models are explained below:

Freelance Hiring (Control-Less Hiring)

The freelance hiring has become a very powerful model of remote hiring during the past one decade. The online hiring of freelancers is about 40% faster than other remote hiring procedures. The normally freelance hiring depends on two main kinds of agreements like hourly rate and fixed project price. It is the most cost-efficient way of hiring, but the risk associated with the reliability and resource control with the freelance remote hiring is much more than other models.

Global Team Model (GTM)

The global team model, also known as a global delivery model is one of the most powerful models of remote hiring most commonly adopted in the software development industry. In this model, the development team consists of both the onshore and offshore resources located at multiple locations across the globe. This is a very useful method of completing the project in a very short time span owing to the availability of resources round the clock without any breaks. It is also very useful for quick response to the requirement changes initiated by the customers. 

Virtual Team Model (VTM)

This remote hiring model consists of multiple individuals with different skills from the multiple locations across the globe. They coordinate electronically and work on the development projects in dependable parts. For instance, a designer completes the design part of the development and hands over the design to the developer who completes his/her part and forwards the code to QA tester and finally handed over to the product owner.

Dedicated Team Model (DTM)

The dedicated team model consists of the skill-specific remote resource or the team of resources that work under the control of the company that outsources its project to a third party company. The third party company handles the entire process of hiring, maintenance of legal obligations based on the agreed contract and assures the completion of the entire work scope of the project with the help of their dedicated team of developers.

This model of hiring is becoming very popular in long-term software development projects. The outsourcing Ukraine market of software development, especially for dedicated development teams, has become a new hub for high quality and low-cost development.  

How Is Outstaffing Different from Other Remote Hiring Models?

Outstaffing is the most reliable way of hiring remote resources dedicatedly for a project or for a specific time duration. Outstaffing is different from other remote hiring models in different ways as given in the following table. 

Remote Outstaffing Model  Other Remote Hiring Models

It consists of a dedicated software developer or a team of software developers that work dedicatedly on one project.

These models of hiring don't work dedicatedly on a specific project, but their tasks may depend on the outcome of the other developers in the team. So, they work on multiple projects at a time.

This form of remote hiring offers great control over the remote resources

Other remote hiring models have limited control over the resources of the team

Outstaffing hiring is regulated under the legal contracts and the third party responsible for providing the dedicated team also guarantees for the reliable completion of the project.

Other remote hiring models are not that reliable owing to their independent nature of hiring without any guarantee from the third party

You pay the fixed charges to the third party for the completion of the project without any fear of additional charges or any hidden charges

The project cost in other forms of remote hiring depends upon the way the teams are managed. The cost of the project may go beyond the allocated budgets too.

It offers a good working environment facilitated by the third party company, so the resolution of the problems is accomplished easily

Without any involvement of the third party, the conflict resolution may take longer, and in some cases, it may result in a big risk for the threat to the project.

Normally, the outstaffing results in high-quality code and fast completion of the project

Other forms of hiring will require specific monitoring for the quality and the project timeline

 

General Misunderstanding about Outstaffing

Along with many positive thoughts about the outstaffing form of remote hiring, there are also some misunderstandings about this form of remote hiring in the marketplace. The most common misunderstandings are listed below:

  • The outstaffing is same as outsourcing
  • The productivity, workflow and assignment of tasks are controlled by the third party company. Actually, all those activities are the responsibilities of the company that hires them for their projects, and only administration and legal obligations of the contract are the responsibility of the outstaffing company. 
  • Outstaffing team is not a part of in-house development team. In fact, it is a part of an in-house team located at the remote location. 

Outstaffing – Pros & Cons

The main pros and cons of an outstaffing model of remote hiring are given below:

Pros:

  • Offers greater control over the employees
  • Much cheaper resources as compared to in-house employees
  • Flexible team to scale up and scale down your teams easily
  • Easy priority management
  • High efficiency and productivity
  • Fast time to market
  • Lower project costs

Cons:

  • Difficult communication management
  • A bit difficult to understand the multi-cultural mindsets
  • Team motivation is a big challenge
  • Time zones are also issues for outstaffing teams

Final Takeaway

Despite a few challenges that the outstaffing remote hiring model faces in the marketplace, a large number of IT companies including big corporations are also choosing outstaffing services in different countries like Ukraine, India, Brazil and other parts of the world.

  • Author:
  • Anastasia Stefanuk, Mobilunity

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