Table of contents
Outstaffing in the IT field is the rental of employees - back-end, front-end developers, designers, project managers. Outstaff staff is legally on the staff of the service provider's company, but works on the customer's project under his full supervision. Payment is based on the man-hours spent on product development. Due to its benefits - for example, savings on HR and accounting costs, outstaff is popular with both large businesses and small firms and start-ups.
When is it worth outstaffing
- We need employees for one specific project.
It makes no sense to look for and register an employee under the Labor Code if his services are needed for 1-3 months. An outstaffed developer will quickly begin to fulfill his duties, and upon completion of work, he will switch to another project.
- You need a specialist with rare skills.
It can take a long time for a non-core organization to find a programmer with sufficient programming experience in the desired language or with in-depth knowledge of a particular OS version. The company offering it outstaffing services has developers with the widest possible range of proven skills.
- It is necessary to temporarily replace a staff member.
So that production does not stop, instead of a retired specialist, you can hire a temporary one without formalizing it.
- Required to reduce organizational costs.
Selection of an employee who meets your needs is not only a long, but also an expensive undertaking. On average, when hiring staff in the state, 40-50% of additional costs are added to the hourly rate - taxes, salaries of HR services, office maintenance, etc.
- Building internal processes in the company with a focus on the main business tasks.
It is often unprofitable for a company to waste internal resources on accompanying projects and side activities. It is easier and cheaper to outsource non-specialized - including IT - tasks to a professional company.
Difference between outstaffing and outsourcing
In general, these processes are similar, so they are often confused. But there is still a difference. Let's clarify it. Outsourcing is an order for the creation of software with full transfer of development authority to a contracting company. In this case, the customer only voices the requirements for the future product, pays for the work and accepts the result. As a rule, he does not communicate with performers - programmers, designers, other personnel - directly. All communication goes through the manager of the outstaffing firm.
Outstaffing of employees implies greater control of the development process by the customer. In this case, the project manager of the client can compile sprints, write technical specifications, organize interactions within the team, and third-party specialists will only write code or perform other specific tasks. All project documentation remains with the customer. Work, as a rule, is carried out on dashboards and in the client's CRM systems.
Outstaffing is suitable for companies that have basic IT competencies and want to speed up the creation of a product or strengthen their existing staff. Outsourcing is preferred by firms for which IT is not a priority. For them, the result is important. Due to the above features, development outstaffing is cheaper than outsourcing. The quality of work is always controlled by the customer.
- Service availability.
Outstaff personnel can be quickly and painlessly replaced if necessary. The production cycle will not stand still in the event of a vacation or sick leave of one particular person.
- High planning flexibility.
You can order as many man-hours of development as you need and exactly when you need it. There is no need to think about how to keep employees busy during downtime or how to increase capacity during a production emergency.
- Inclusion of third-party employees in internal processes.
Outstaffing of it specialists involves their actual transition under the leadership of the customer. Programmers or designers will follow the principles of the company that hires them.
- Reduce risk compared to outsourcing
The client is always aware of how the development process is going. He knows who is involved in his project, what skills the hired specialists have, what result to expect.
- Improve the efficiency of all production processes.
By reducing development costs, the company frees up resources to develop important projects and invest in the future. Involving outstaffing also saves time for permanent employees to perform their immediate tasks.
Which companies use outstaffing
Now more and more large and small firms prefer to hire staff rather than expand staff. Someone wants to keep the opportunity to work under a simplified tax system, someone does not want to maintain a large office and organizes work remotely. But saving on HR and accounting remains the main reason for using outstaffing.
Most often, financial organizations, retailers, commodity enterprises, and media holdings become clients of IT service providers. These are large corporations for which it is important to maintain the sustainability of business processes at all levels.
How IT outstaffing works
The customer provides information about his project and the specialists necessary for its implementation.
- Signing a contract.
After the requirements are approved, the manager of the outstaffer company and the client's representative sign a contract for the provision of services.
The agency finds free candidates for the customer's vacancies and provides him with information about their qualifications, experience, hourly rate.
- Approval of candidates.
The client selects the employees he is ready to hire temporarily.
- Paying an invoice.
The final price of the service is formed based on the rates of outstaffing workers and the number of hours ordered.
- Running project.
The hired staff is transferred to the customer's disposal. Working conditions and reporting format are agreed in advance.
How is outstaffing beneficial for an IT company?
We described the advantages of outstaff for the client above. Now let's figure out what is the point for a regular development studio to provide such services.
- Clear loading scheduling.
Most often, complex, long-term projects are given to outstaff. This means that employees will not be idle, and the company's revenue will always be stable.
- Partial delegation of responsibility.
If the customer manages the project himself, the contractor does not have to worry about the organizational routine. All temporary employees are responsible for is the performance and speed of the code they write and test. Setting, distribution of tasks remains with the client.
- The opportunity to work with large customers.
IT outstaffing is often practiced by well-known companies, where it is extremely difficult to get a full-fledged project for outsourcing. Providing such firms with individual services is a good opportunity to gain new experience and add a meaningful line to the portfolio.
- Minimizing financial risks.
Turnkey software development for a fixed price is most often unprofitable for the contractor. All force majeure and nuances cannot be calculated in advance. A project that seemed simple and straightforward at the stage of drafting the TOR can lead to significant reworking of all involved employees. On outstaff, payment is made based on the hours worked.
In simple terms, outstaffing is the temporary provision of employees to perform specific work.
In IT, outstaff is beneficial for both the customer and the contractor. First of all, staff hiring solves the problem of workload planning in a company. Another important advantage of such a system is the savings on associated costs associated with direct hiring of employees in the state.
Outstaffing services are suitable for companies that want to independently control the software development process, attracting qualified personnel from outside.
Outstaff risks are minimal, most of them can be prevented at the stage of signing the contract.