The Ultimate Guide to Outstaffing
You’ve seen the term “Outstaffing” here and there but never really got a concise explanation of what it is? We got you! In this article, we explain what outstaffing is, using our own company’s process as an example.
What Is Outstaffing?
Outstaffing is an innovative recruitment model that allows a company to hire remote full-time employees through an outstaffing agency. The employee joins the existing team as a full-time member. The only difference is that legally they are employed by the outstaffing company, which takes care of all the legal paperwork.
Let’s look at Coder Staffing as an example and briefly describe the process. Our team has a large database of vetted developers. We carefully find a perfect fit for each client. Since we pair a company with Russian developers, the costs are significantly lower than those of North American and European programmers. The developer then joins the client’s team. Coder Staffing helps with communication when needed and if after 30 days the client decides the programmer is not the right fit, we return the money. In an absolute majority of cases, our clients are happy with the programmers we found for them and keep working with them and, thus, us for years.
You probably already grasp some differences between outstaffing and outsourcing. However, since outsourcing is a popular way to meet the tech needs of an organization on a budget, many imagine outstaffing to be something similar. Yet, there are many significant advantages outstaffing has when compared to outsourcing. Let’s look at how the two differ.
Outstaffing Vs. Outsourcing
Both outsourcing and outstaffing save you money on hiring tech talent. However, that is about all the similarity there is between these two models. What are the differences?
The main difference between these two recruitment models comes down to management. When you hire through an outstaffing company, your company manages the employee fully. In contrast, when you outsource, you delegate the responsibility to the project manager from the outsourcing company. No one joins your team, the whole project is done outside of your company. Thus, outsourcing can be a solution for each individual project, but it is not meant for long-term, committed cooperation. This can create a lack of transparency and a disturbance in the feedback loop. Moreover, the team that works on your project most likely simultaneously works on other tasks as well.
In contrast, outstaffing agencies provide you with an employee as good as your own. The only difference is the paperwork that positions the agency as a middleman, and the remote status of the team member. You can be sure the new employee works exclusively for you. Moreover, you have a direct communication channel, instead of addressing them through a project manager.
What are the benefits of Outstaffing?
Outstaffing is the closest you can come to traditional recruiting on a limited budget. With developers’ salaries constantly rising, you might feel like outsourcing is your only way to get tech tasks done. But outsourcing cannot be the long-term solution. After all, outsourcing teams never work exclusively for you. However, outstaffing offers you a rare opportunity to scale your team and hire internationally recognized talent even if your budget doesn’t allow you to employ programmers in your country.
Outstaffing companies aren’t looking for a one-time collaboration. Instead, they focus on building lasting work relationships. For instance, most of our clients ask Coder Staffing to help scale their tech team after hiring one developer. Commitment and transparency are important values of outstaffing agencies that pay off in the long run.
Yes, you heard that right! The outstaffing company legally employs the person who fully works for you. Your company has a contract with the outstaffing agency and you just pay one invoice per month. The rest – legal filings, overseas taxes, health insurance, and more – is taken care of by the outstaffing agency. Coder Staffing, for instance, is a registered US company, which makes it easier for a lot of our clients to cooperate. Outstaffing ends up being a great deal – you get a talented developer, no paperwork on your hands, and it saves you money.
To trust the outstaffing process, you need to understand what the business model behind it is. An outstaffing agency is interested in finding you an employee who will fit your technical needs and corporate culture. In fact, at Coder Staffing we don’t charge anything for the hire itself, only a commission off their salary every month. Thus, we optimized the recruitment process to deliver quality results fast. We then give our clients time to assess the fit in a workflow situation – a 30-day trial period. After 30 days, you can still choose not to employ the developer and you won’t lose any money. Therefore, our objective is to invest energy and time to find someone with who our client can build a stable, long-lasting working relationship. Indeed, our revenue directly depends on how good the fit it, and thus, how long the working relationship between the client and the developer will last. It becomes evident that the interests of Coder Staffing are aligned with those of our clients, which adds to the transparency and smoothness of the work process.