IT Outstaffing Model: Pros and Cons of Hiring an IT Outstaffing Company

IT Outstaffing Model: Pros and Cons of Hiring an IT Outstaffing Company

With the nature of work progressing rapidly, hiring the right talent becomes a priority task for businesses. Alongside the traditional hiring methods,outstaffing or staff augmentation, a new partnership model came on the scene to help businesses with remote hiring back in the 90s. Simply put, IT outstaffing is the art of hiring remote tech talents from another company with the help of a third-party (vendor) organization. Within this form of collaboration, these employees are fully managed by the customer company, without having to relocate to be part of the team or the project. Businesses end up having multicultural teams across the globe without having to establish branch offices in multiple locations. But there’s more than that, so let’s go one by one.


Pros of Hiring an Outstaff Team

Outstaffing comes with a number of benefits for which many businesses turn to this model, and here are the main ones:

Cost savings

A number of factors lead businesses to cut expenses due to hiring an outstaff team. Here’s how it works. First, remote hiring is cheaper compared to in-house hiring, considering the office space, equipment, facilities, or taxes. Additionally, in case of outstaff hiring, the third-party organization (IT Outstaffing companies) becomes responsible for hiring, so you don’t spend resources on talent search. What’s more, some countries offer lower rates, which may be quite advantageous for businesses. After all, why spend more for the very same and sometimes even higher quality?

Access to a wider talent pool

Needless to say the wider the geography, the wider your talent pool will be. Outstaff hiring enables businesses to extend their team with outstanding talents from all corners of the globe. And due to global hiring, the chances of finding the most fitting candidate for the very project are exceptionally high. That is to say, you don’t limit yourself to talents in your in-house team but involve professionals overseas who can still be full team members.

Flexibility and scalability of team

Software is the industry where the workload can face immediate changes, and outstaffing again comes into play. While you may not be able to hire immediately or fire an in-house team for temporary workload fluctuation, with outstaffing, you could give it a go. Extending your team or scaling it down is simpler and more flexible with the help of your outstaffing partner.

Control over the development process

Here comes another significant benefit of outstaffing; having total control over the development process. When you outstaff a remote employee, they become a full part of your team, so your main team gets to manage the employee and their work processes. This results in a well-coordinated work process and overall collaboration.


Cons of Hiring an Outstaff Team

Despite the number of advantages, outstaffing bestows you, it falls short in a few aspects.


Time zone differences and communication challenges

Maintaining continual communication gets a little tricky when you switch to outstaffing. Because your outstaffed teammates are working remotely, time zone issues may stand in the way of effective cooperation within the team.

Cultural differences and adaptation to work style

Alongside the beauty of multiculturalism, dealing with people of different cultural belonging causes inconveniences in terms of work style, approaches, or standards. The adaptation process toward the mutual work style may take a while.

Reduced sense of team cohesion and morale

Building a strong team spirit is key to running a successful business. With your employees located in different corners of the world, you have to make extra effort to ensure a high sense of team cohesion and employee morale.

Legal and administrative responsibilities

Lots of paperwork and other legal responsibilities pop up when choosing to outstaff. Because you are working with a third-party organization and most likely from a different country, additional legal and administrative processes must be handled to ensure a successful collaboration.


How to overcome the cons of the outstaffing model

Overcoming challenges is part of your job if you are a business owner. Consider drowning out those cons by simple yet clever tips.  Here’s what to do:

Foster communication and collaboration among team members

Start with picking an online team collaboration tool that best suits your business needs to ensure a mutual platform for your team to communicate. If you are working with Agile, daily stand-ups must be inseparable from your daily routine. Or have you thought of bringing small teams together for a team presentation or a conference? Encouraging video chats would also do to assure a more friendly environment for collaboration.

Establish cultural awareness and cross-cultural training

High team collaboration and therefore, work productivity come with respect and recognition among the people of your team. Especially in a multicultural environment, boosting cultural awareness and inclusiveness becomes essential. Encourage an environment for all your employees to be open about their identity and ethnicity. Recognize their national holidays, celebrate when possible, or allow their native language use during non-formal work meetings.

Organize regular team-building events

Yes, that’s more than possible. At the time of Covid19 lockdown, at Esterox we switched to virtual happy hours. Gathering the team for a virtual coffee break, movie, or book club became a routine for us. Building a strong bond among your remote teammates must be no different. No matter where your employees are, bring them together for a remote videogame, an online challenge, or even an online talent show, and enjoy the positive work culture.


Hire a dedicated HR manager to manage legal/administrative responsibilities

Here comes the magic person, the HR manager, who’ll get everything on track for you. A professional and dedicated HR manager will coordinate all processes smoothly’ starting from employee contacts to legal duties in their countries.


Final thoughts on the IT outstaffing model

The IT outstaffing model allows businesses to fill talent gaps with remote staff. It’s up to your business needs if you are moving forward with outstaffing, whether it is to boost your team capacity or just cut expenses. In case you choose outstaffing,  you should consider the risks we have mentioned above and the recommendations on how to make the best out of your IT outstaffing experience for both your business and employees.

Recommendation for choosing an outstaffing partner or vendor

You must have already made up your mind if you have come this far, yet another challenge is to find the right partner for your team to fulfill all your business goals. Here’s a quick guide to help you out:

Define your needs and requirements

This is where you must be most specific. Without identifying your goals, problems, or needs, you cannot find the proper solution. Hence, prepare a clear picture of your requirements to make the process of finding a suitable vendor company easier.

Usually, when client companies don’t provide a complete picture of their needs, Esterox assists by providing a questionnaire to help the client give a more precise description of their needs and goals; after all, asking the right questions brings out the desired outcomes.

Check their portfolio for experience

Even if the outstaffing vendor pops up first on your feed, you always want to check their portfolio; did they have similar projects in the past, are they experienced enough in the industry, or were the projects they handled as complicated as yours? After all, no one orders lunch without throwing a glance at the menu.

Ask for references and check reviews

Outstaffing companies usually have a testimonials section on their web pages, so your first interest should be checking them out. But since double-checking is a must, you better ask for reference contacts from the partner-to-be, to be able to get a first-hand review about the company.

Pay attention to the time zone and location

The best developers may be based in every corner of the world, but you should look for convenience too. It's best if both your in-house and remote teams work similar hours to avoid any disruption in the work process.

You have to think about your budget, too

Do your research and lots of it to get the quality for the price you are paying for. Unquestionably, you should compensate for good work adequately, but you have the choice to go with the one that suits your business from a budget and quality point of view.

Prioritize communication and availability

Check all the communication channels and the team’s availability before you start doing business. No one wants to end up in a non-responsive work environment that affects people and the business negatively.

Look for shared values and culture

We have already highlighted that an outstaffed teammate will engage with your in-house team as a full member. Thus, make sure the vendor company you choose to work with holds shared values and culture to maximize work efficiency and smooth team collaboration.

A trial task is a good idea

When hiring an in-house teammate, you have either an exam or a test task. The same goes for outstaffing. You may send them a paid trial assignment to check if the result properly meets your project goals.