An increasing number of tech companies are transitioning their software development operations to remote and cost-effective options such as outstaffing. Not only to maximize their software development budgets but also because of the shift on the talent recruitment strategies.
Innovative strategies are highly relevant since the tech job market is more competitive than ever. In fact, tech job vacancies have increased by 81%, yet the median applicant pool has decreased by 39%. Most organizations recognize hiring remote teams or remote workers as a successful solution.
Outsourcing vs Outstaffing
Outsourcing and outstaffing are two of the most common business strategies that both rely on remote and external resources. However, each business model differs in terms of the scope and nature of the engagement.
In an outsourcing model, the client entrusts the overall project to an external company. Clients have limited involvement in the daily operations of the outsourced project as long as the provider delivers the expected results. This is commonly based on a long-term partnership.
On the other hand, outstaffing might not be a term you frequently hear. However, you may already be familiar with the outstaffing procedure as it is similar to hiring a contractor. Outstaffing is hence frequently referred to as "contracting" in the current IT outsourcing landscape.
In this business model, you can achieve team augmentation by hiring external tech talents as an extension of the client’s existing teams. It may include IT professionals such as web and software developers, QA testers, data analysts, project managers, and more. The additional member is officially hired by an outsourcing agency but the client still retains control and ownership of the project and tasks.
Outstaffing partners like, Dev Partners, act as the employer responsible for the following processes:
Recruitment and selection of members
Onboarding and training
HR and Administrative support
Performance management and evaluation
Support and Communication
Continuous Engagement and Relationship Management
Here are some particular instances of how outstaffing can benefit companies:
Scenario 1: A tiny startup may outsource the creation of a new mobile app to a group of skilled programmers from a low-cost nation. This can help the firm save a sizable sum of money and speed up the release of their app.
Scenario 2: A large company entering a new market might hire a team of industry professionals to design a new website or e-commerce platform. As a result, the business can easily establish a presence in the new market.
Benefits of Outstaffing for your Company
Cost-Effectiveness
An article from Linkedin reported that companies can save up to 60% on IT cost through outstaffing due to much lower monthly payments and administrative costs.
By leveraging outstaffing for your tech company, you can have a more cost-effective option compared to the conventional hiring practices. Organizations can do away with the need for tedious and pricey hiring procedures. Instead, businesses can tap into a pool of highly qualified professionals who have already undergone the provider's rigid screening process, both communication and technical assessments. Due to a streamlined process, the costs associated with recruitment, including advertising, interviewing, and onboarding, are significantly reduced.
Additionally, through outstaffing, businesses can avoid the costs of full-time employment, such as wages, benefits, and related taxes. It also allows businesses to lower overhead costs by contractually compensating external specialists for the services they provide. Tech firms can also cut costs on infrastructure and office space as teams who are understaffed work remotely. This can eventually reduce the demand for physical space and tools.
Access to Diverse Tech Talent
One of the outstaffing benefits that offers a range of advantages is the opportunity to access the global market. Tech companies no longer have to be constrained by geographical limits. They can hire the right people with the right skills for their project, regardless of location. Moreover, outstaffing companies are capable of finding candidates who have in-demand and difficult-to-find expertise in fields like data science, artificial intelligence, cybersecurity, and blockchain development.
Outstaffing companies bring onto the table their insights into industry best practices and emerging technologies. At the same time, tech firms can improve their own initiatives and plans by utilizing the pooled knowledge and industry expertise of global talents. By leveraging specialized expertise and experience, your tech company can surely gain a competitive advantage.
Scalability and Adaptability
Depending on the needs of the project, outstaffing gives you the freedom to easily scale up or down teams. With this adaptability, tech companies can easily tap into tech professionals that have the specific training and expertise required for a given project stage. This is highly important since tech organizations regularly deal with shifting business requirements and changes in project expectations. To meet these changing needs, outstaffing companies can quickly identify and assign resources and ensure that the correct talent is accessible when it's needed.
Increased Efficiency and Focus
Organizations like yours can cut down resources by delegating non-core functions to the outstaffed professionals. With this, specialized tasks are handled by the external team to make sure that in-house teams can highly focus their efforts on strategic initiatives and product development. This translates into faster delivery, higher quality output, and improved overall efficiency.
Additionally, clients can guarantee that projects are carried out by experts with the necessary knowledge and expertise since outstaffing partners have access to a large pool of specialist IT staff. This knowledge leads to quicker deliveries, higher-quality output, and more overall effectiveness.
Outstaffing is a great choice for businesses on a budget who still want access to top talent. It saves costs, offers scalability, and improves efficiency. Tech companies can benefit from low-cost options, access to various IT expertise, flexibility, and increased productivity.
It helps teams grow, gain specialized knowledge, and maximize resources in a talent-driven industry. It helps overcome tech talent shortages, foster innovation, and succeed in the competitive market.
If you’re ready to unlock the power outstaffing and experience the benefits firsthand, start your IT team augmentation journey now. Explore Dev Partners and don’t miss out on the opportunity to take your organization’s success to new heights.