Karl Gorman
Outsourcing vs Outstaffing

Outsourcing Vs. Outstaffing: What Is Better In 2023?

High-quality software development requires a competent team. Sometimes, a business might not have the required app development team to meet deadlines or build a high-value product in time. The solution most times is not to cancel the whole project but to instead hire software developers to meet your needs.

That’s where outstaffing and outsourcing come in. With outsourcing and outstaffing, businesses can meet up with software development demands. If you require extra, qualified hands with building software products but wouldn’t want to hire a full-time staff, you should consider outsourcing or outstaffing.

But what’s the difference between either, and which should you choose? Here’s a table of content of how we’ll answer your outsourcing vs. outstaffing questions:

What Is Outsourcing Software Development?

Outsourcing software development involves a business company hiring another IT development company to take over a portion or all parts of a software development project. As a business owner outsourcing your development, you pay the company directly and interact with the project manager while they communicate with the rest of the team. The team does all the work required and aims to present a quality product within your deadline.

Pros and cons of outsourcing software development

In any decision that affects your business, you’ll need to understand the implications of those decisions on your business. Let’s look at how outsourcing might affect your business process positively and negatively:

Pros of outsourcing software development

  • Purchasing hardware or software isn’t required: The outsourced team would need hardware and software tools, but they won’t bill you directly. Instead, they’ll factor it into your budgetary estimates and costs.
  • Finding and managing the right people is the vendor’s responsibility: When outsourcing, the outsourcing vendor schedules interviews, appointments, onboarding, payroll, benefits, and taxes for the development team. You pay them, let them know what you need, and they handle the rest.
  • Hands-off team management: Outsourcing doesn’t require a hands-on approach, from communication with the team to assigning tasks, tracking deliverables, and ensuring quality; it’s all on the vendor’s project manager.
  • The vendor maintains code quality: Outsourcing vendors, who are the ones with the technical capacity, ensure the code meets your product’s requirements. They also conduct quality assurance on the product. Hence, technical input is not necessarily required from you, although it might be helpful if you’re the type to want to follow the process in detail.
  • Flexible access to more resources: What your team lacks in hardware and software, you gain by outsourcing your software product development needs. The vendor can bring in specialists at will to handle certain parts of the project without stressing you with hiring decisions.

Cons of Outsourcing software development

  • Less control: If you’re the type that likes to have considerable control over your development work, then outsourcing might not be for you.
  • Outsourcing is the more costly choice: The comfort and free time that comes with this decision to allow someone else to handle your software development come at a cost.
  • You’ll need to ensure their reliability: With outsourcing, the only way to know if a vendor is reliable is through reviews, and if there isn’t, you have to work with them or move to another vendor who does.
  • No contact with team members and no eye on the process: Whether the vendor is indeed working with specialists or if they’re overcharging you, you never really know. There’s no way to keep a sharp eye on every part of the development process.
Outsourcing vs Outstaffing

What Is Outstaffing Software Development?

Outstaffing software development involves hiring employees from a staffing company to handle parts of your project. You are to provide them with the scope of your work, and they’ll take that information and find the right people with the expertise to ensure a clean job is done.

With this arrangement, the staff you get from the vendors work with the rest of your team the way you like. You can have some control over how they carry out their job and spend their time in the office. In a way, your outstaffed developers are like your usual in-house staff, except they aren’t permanent staff and didn’t sign an employment contract with you.

Pros and cons of outstaffing software development

Outstaffing has some fantastic uses, especially for clients who don’t want to relinquish all organizational and management power to a vendor. But before you embrace it wholeheartedly, let’s look at some pros and cons of outstaffing development.

Pros of outstaffing software development

  • Less concern about labor disputes: You (the client) and the outstaffing company are the ones that go into an outstaff contract. The vendor then employs the outstaffed developer as a staff under you. Hence any dispute arising from the employment contract does not concern you directly.
  • Access to flexible hiring: Outstaffing allows you access to hire staff for a specified time flexibly. For example, if you need a QA tester for two months, the outstaff vendor gives you a QA tester for two months. They handle payroll and taxes while you manage the staff.
  • Control and Access to the development process: An outstaff contract worker works with your team and not the other way around. You dictate how they work and what you need from them, hence, maintaining control of your team and software development.
  • Reduced costs: Outstaffig is the less costly half of the outsourcing vs. outstaffing debate. Because you do more of the heavy lifting with management, you only spend on hiring the number of staff planned for. Also, you avoid being overcharged and any hidden costs.
  • Increased possibility of reliability and technical efficiency: You wouldn’t be hiring just any freelancer. It’ll be someone interviewed and tested by the outstaffing company. This way, you’re more assured of their technical capacity than an outsourced team you can’t contact directly.

Cons of outstaffing software development

  • Need for constant communication: With most outstaffed developers working remotely, it can be not easy to maintain effective communication, which is essential for teamwork. Hence, you must work out a way to ensure the contract worker understands and carries out the tasks efficiently.
  • Increased responsibility: Outstaffing shifts the responsibility of the team and project management to you. It falls on you and your project manager to ensure all quality checks are passed and that every task is completed.
promo image1

Certified engineers

Convenient rates

Fast start

Profitable conditions

Agreement with
EU company

English and German
speaking engineers

What’s the difference between outsourcing and Outstaffing?

The significant difference between outsourcing and outstaffing is that with outsourcing, you relinquish most of the team-management responsibilities to the project manager. Still, with outstaffing, the vendor hires a contract worker to join your team and work full-time as your staff. Navigating the difference between these two hiring models can be tricky, so let’s go into more detail with a table:

Team managementOutsource the project manager manages the teamClient is responsible for team management
Responsibilities and tasksOutsource team takes responsibility for carrying out most, if not all, that’s required to design, build, release, and maintain the productOutstaff team is only responsible for the tasks assigned to them. The client and in-house team maintain responsibility for the others
Payment and wagesClient pays the outsourced team vendor, and the vendor pays the workers what they’re due. The client has no knowledge of what the vendor pays the workers.A client pays the outstaff team a regular wage just like other employees
Pricing and costsOutsourcing is more costly as the outsourcing team takes responsibility for every part of the development process while you chip in when neededOutstaffing is less costly as you maintain responsibility over other parts of the development that the contract staff isn’t responsible for, including assigning tasks, team management, etc
Technical skills requiredSince the outsource team will do all the work, you don’t need any technical skill. However, you must be able to clearly define and communicate your needs, as that’s what the team will act onAlthough you have more team members, the rest of your team would need to maintain high-technical know-how in their specialized area

Outsourcing vs. outstaffing: What is better in 2023?

Now that you know the difference between outsourcing and outstaffing, how can you decide which is best for your business? Let’s use an example.

Imagine you’re a food production company or restaurant that wants to build an app where customers can order food directly from you. You ordinarily wouldn’t have an IT department since your primary business is to make food for people. Your wisest choice would be to outsource your software development, and not outstaff because you don’t have an already-existing IT department.

But if you’re a software development company and you want to build a food ordering app, it might be better to outstaff if you simply want more hands on deck. You already have the infrastructure and a team, so you would only hire according to your needs. But if till isn’t enough, you can outsource the work to an outsourcing vendor.

Outsourcing vs Outstaffing

Key Takeaway

Outsourcing and outstaffing serve different purposes. Outsourcing works for businesses who don’t have an IT infrastructure to manage your needs, or you have too much on your plate but would still like to get the work done. Meanwhile, outstaffing works for businesses with an existing IT department that need support to handle specialized parts of the development process.

When deciding what’s best for you, consider your business needs and how much control you can relinquish to the vendor. The best option would save you time and effort and help you design a high-quality product according to your requirement.

If you need highly qualified software developers at the right price for your project, contact us now!
Talk to us
Let’s talk about your project!
We will contact you as soon as possible