Outstaffing in The IT Industry

Outstaffing in The IT Industry

Recently, many companies have been using outsourcing services. It means delegating some operational tasks to freelance specialists. Such a format of work is especially relevant in the IT industry. Recently, however, entrepreneurs and HR have begun to use outstaffing services. In this article, you will learn what outstaffing is and how it differs from outsourcing. 

 

Some people think that outsourcing and outstaffing are completely identical concepts. But they are not. Outstaffing means that an employee will work full-time for the same company without being formally employed. The employee continues to perform his duties at his workplace and receives a salary. But he is not officially employed by the company. At the same time, he will officially work for a company that provides outstaffing services. This company assumes the costs of paperwork and payment of taxes, vacations, and sick leave. Outstaffing is beneficial because it is a completely legal method to reduce taxes and authority of accounting and company administration. Outstaffing is beneficial for companies operating under the simplified taxation system, where there is a limit of regular employees. This is especially important for the IT-sphere. 

 

This format of recruitment is common in countries where the IT industry is developing rapidly. For example, you may hear a lot about IT outstaffing in Ukraine, Singapore, Dubai, Great Britain, Canada, the USA, and other countries. 

 

Outstaffing advantages in the IT industry:

 

  • Speed. Ability to respond quickly to business needs. A good outstaffer firm always has dozens of first-class specialists. Contracts are signed with the performers, which obliges them to perform the necessary amount of work with the required result.
  • Efficiency. With good specialists, the required result will always be higher.
  • Flexibility. The team is managed by the managers of the customer himself. He can easily add or reduce the number of specialists working on a project as needed. 
  • Reduced costs for recruiting, staff support, accounting, insurance, taxes, and so on. The bigger the company, the bigger the result. Outstaffing is a great way to optimize staffing costs.
  • The best employees. There is a real hunt for programmers. Even if you offer a higher salary than the market, it may take months to find a first-rate specialist. It is easier and cheaper to go to an agency that already has them. And do not waste the time of the HR department.

 

However, this model of organizing the work of IT companies has disadvantages. One of them is the lack of communication. Often freelance IT specialists work remotely, in another city or country (in a different time zone). They may speak a different language or have a different culture. It is very important to establish good communication between them and the manager of the client company. This is the only way to achieve peak productivity. It is also difficult to get performers motivated when using outstaffing. Outstaffing personnel often require additional communication, especially at the start of the job. You have to keep them motivated, keep them enthusiastic. Usually, programmers’ enthusiasm and dedication to the project in this way of organizing working relationships is much better than in outsourcing, but still, you should not take it for granted.

 

You should know that saving money should not be the only reason for choosing outstaffing. After all, IT staff outstaffing is the perfect model for finding important experts, speeding up product implementation, and quickly expanding/shrinking your development team. Especially if you want to maximize quality.

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