The ever-changing business landscape calls for organizations to constantly look for new ways to acquire tech talent. Hiring managers have to navigate a tight tech labor market, source, vet, manage and nurture job candidates to gain competence in relevant technologies. As a result, many are turning to staffing firms to meet their growing labor needs. But there’s one old question on matters of software development skills shortages: what is the best way to expand your technical team?
Generally, there are three ways of hiring external development teams i.e outsourcing, offshoring, and partnering with an outstaffing company.
In this article, we are going to discuss each of these hiring models, their merits, demerits, and which one is ideal and under what circumstances.
But before we do that, let’s start with explaining how different offshoring, outsourcing, and outstaffing are from each other.
Outsourcing vs. Outstaffing vs. Offshoring
The hiring model you choose is pegged on several factors including your budget, scope of the project, and skill deficit within your in-house team, just to mention a few.
Outsourcing. This hiring model entails moving internal operations or an entire development project to a third party. The outsourcing provider handles everything from A to Z, meaning the hiring company doesn’t have access to the development team until the project is done.
IT outstaffing. In this type of remote collaboration, a company hires developers or development teams to undertake development projects, although they’re officially employed by the development partner.
It is the IT outstaffing company that’s responsible for office equipment, wages, bonuses, insurance, and anything else given to an employee. As the customer, you are only required to provide the team with tasks and assignments and pay an agreed commission to the development partner.
The main difference between software outsourcing and outstaffing is the fact that the latter gives you access to the development team and the processes. Better yet, there are shorter communication lines because you can communicate with the team directly and work on multiple projects simultaneously.
If you’re venturing into a technologically driven project and need guidance on structuring your team or ensuring you have the right tech expertise on board, considering CTO services for hire can be pivotal. A seasoned CTO can curate and collaborate with an outstaffed team, ensuring alignment with your business goals and the technical excellence required.
Offshoring. This hiring model is primarily related to geography. It leverages the cost differentials by hiring from expensive countries to low-cost countries. In the West, for example, the cost of hiring a software developer can be as 3 times more expensive compared to a country like Ukraine.
How to Choose What’s Better for Your Business
As indicated above, the hiring model that works best for you depends on where you’re at as an organization. Are you a small startup working with a limited budget, or are you an established multinational corporation that would pay a premium to gain a competitive advantage? Or still, would you rather set out your own internal hiring requirements or have an external partner set these parameters for you? These are some of the factors that should inform your decision.
Now that we have seen the difference between outsourcing, outstaffing, and offshoring, let’s see how you can apply either of them in your business.
Outsourcing vs Outstaffing. If you run a company that isn’t too technology-focused and have limited in-house professionals, outsourcing is the most ideal model for you. If you have a proper management to manage your remote team and well-defined processes, you are better off sticking with outstaffing. However, each case is unique, and it’s always a good choice to consult with the experts first.
If you are looking for niche skills that are hard to find locally or regionally, offshoring can help you access a pool of talented experts on a global level. Alternatively, if you have maintenance, support, extensions, and other minor work to your legacy code offshoring can also be a good option.
Can Outsourcing or Outstaffing Replace In-House Employees?
Today, many companies want the people they’re working with to feel like a part of their internal team. Moreover, more and more workers are increasingly choosing to work in companies that offer better work and life balance rather than high salaries.
Some of these perks are impossible to achieve when outsourcing and outstaffing, as the specialists are officially employed by the outstaffing services vendors and tend to align more with that culture. Worse still, you’ll be investing in the on-job training of third-party contractors as opposed to investing in your in-house team.
So the simple answer is IT outstaffing services and outsourcing will not completely replace in-house employees. As an employer, however, you can leverage offshoring as it combines the best of both offshore staff augmentation and an in-house team.
5 Benefits of IT Outstaffing Company
Whether a tech or a non-tech company, IT outstaffing has several outstanding benefits that can help you expand faster and maintain a competitive edge in the market, ultimately increasing your revenues. They include;
Access to Deep Expertise
IT outstaffing gives companies unlimited access to a big talent pool of dedicated software developers with extensive experience. As such, even small businesses can work with top professionals without spending an arm and a leg on training programs. What’s more, operating as an extension to your IT team, external developers are able to boost the technical skills and knowledge of your in-house team.
Better Direct Communication
Another advantage of the staff augmentation software development model is that it facilitates better communication and control over the development team. By eliminating the middlemen, you can easily make decisions, manage the development process, guide group activities, and prevent possible risks in line with the requirements of your particular project.
Flexible Teams
Flexibility is yet another critical benefit of outsourcing outstaffing development. If you can detect a slight deficiency in terms of human resources, you can rope in additional talent to ramp up the overall productivity of your team. Likewise, you can stop the cooperation with particular external engineers once you feel your in-house team can comfortably deliver the remaining part of the project. In other words, with an outstaffing solution, you can scale upwards and downwards as the scope of your projects changes.
Increase Efficiency and Competitiveness
Companies that try to conduct all their IT Services in-house require a relatively higher level of research, development, and turnaround time, ultimately increasing costs, which are then passed to the final consumer. With outstaffing development, however, all these factors are passed on to the service provider.
Faster Implementation of New Technology
A quality outstaffing agency is constantly investing in resources and technology, meaning they can start working on new projects almost immediately. Trying to replicate the same thing in-house might take several weeks or months to assemble the right team, train them, and offer the support they need. What’s more, team augmentation services providers bring years of experience, ultimately saving you time and money.
Factors to Consider When Adding Members to Your Development Team
Before bringing a new outstaffing expert into your team there are several specific skills that you must look for. And while at it, you must be willing to invest in your people internally, as it will help in getting the best project outcome.
Role-Related Skills
Whether your project is small or big, each team member must understand their individual role, as well as their responsibility in the overall group. The roles and responsibilities are often communicated to the new person once they join the team, by the team leaders. As the employer, you need to clearly state the roles of every team member, as well as accountability, which must be in a written document. While at it, ensure you clearly outline the timeline charts before beginning any product development work and make everything as transparent as possible.
Communication Skills
For a development team to reach its full potential, individual engineers must be able to say what they think, share new ideas, risk making mistakes, and ask for help. And this can only happen in an environment where team members trust one another, focus on solutions rather than problems, and most importantly communicate.
And for friendly communication to happen, individual team members know, respect, and care about one another. Before you can outsource outstaff, ensure the individual team members have effective communication skills.
Team Player
Most software development challenges require much more than a good solo performance. And since the success of the project is pegged on the degree of interdependence within the team, it is important to choose an individual/s who can function both independently and in a team.
Organizational Skills
Mass chaos doesn’t mix well with software development projects. As such, your team leader needs to be extremely organized, knows the progress of your project, and identify challenges the team may counter. They should also be able to leverage project management tools and techniques to keep everything centralized and stay organized.
Concluding Remarks
As a business owner, you don’t have to wrestle with the challenges of sourcing and recruiting tech talent. By partnering with an outstaffing company, you can access expertise and resources not available in your own company, and save time and money while at it. And with the tips to consider when adding an external team member listed in our article, you shouldn’t have a problem augmenting your development team.