What Is Outstaffing with Simple Words

Outstaffing

Outstaffing (or temporary work) is the registration of employees in the staff of another organization. People work for one company, but according to the documents, they have another employer.

Why Is Outstaffing Needed?

An outstaffing company performs all the functions of an employer: it pays wages, pays taxes, keeps personnel records, interacts with state authorities, and so on. But it does not conduct any activity but only “rents out” employees to other companies. An employer’s main risk is running into an illegal outsourcing company. In this case, all sanctions for illicit workers, non-payment of taxes, and violation of migration laws will fall on him.

SECL Group is a reliable outstaffing company that knows everything about Body and Team Leasing and is ready to explain how outstaffing works with simple words.

How to Solve the Personnel Problem in IT?

Many things could be improved with personnel developing IT projects. Even if we leave aside the vast problem of hiring qualified programmers, there will still be issues of planning their work, estimating complexity, and many other factors that must be managed at all stages of project development.

Here are some approaches to solving them.

1. Professional In-House Development

In-house development is the most transparent and complex methodology of project development. Sometimes, a company’s team can turn out to be a relatively cheap way of implementation, sometimes – the most expensive.

The point is that the correct development of any project always requires a whole team of people – not only programmers but also designers, testers, product owners, and product managers. And it is necessary not only to collect them together but also to make them work effectively. The solution to this problem has been described dozens of times, but it remains a problem for many.

What are some other nuances:

  • Search: The labor market only sometimes has the necessary specialists, and if there is, the cost of their services may exceed the project budget.
  • Costs: Searching and attracting a specialist is often expensive for the company (HR costs, hunting commissions)
  • Infrastructure: It is not enough to hire a new employee. Giving him a workplace, a laptop, guarantees, and insurance are necessary.
  • Risks: Everything happens. Sometimes people have to be fired, transferred from one project to another, and retrained if they do not live up to expectations. The dismissal process also requires costs.
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Own development is suitable for companies with an IT infrastructure and an already organized process. All that is required is the scaling of the regular schedule. And this is already due to the availability of personnel on the market, exciting tasks on your project, and an adequate budget for buying developers into the staff.

2. Outsourcing

The most straightforward way is to outsource everything. This is a working option if you have a verified contractor with free resources. We tell our colleagues what we want, get the terms and costs from them, exercise control over the process of working on the project, and accept the product.

Everything is perfect. But even here, it is possible to make a mistake:

The problem with estimating the deadlines on the customer’s side: very often, third-party developers underestimate the project’s complexity.

The problem with finding the optimal solution: for example, the outsourcer will not redo the design endlessly, and the difficulties of the curve architectures can be released already after the start of product operation. In addition, the idea of an “ideal online store” varies greatly depending on the level of competence and accumulated experience of the contractor’s team.

The problem of choosing resources and technologies – the outsourcer may not offer the most suitable tools and solutions for the task, but what is currently used within the team.

The contractor’s evaluation criteria are not transparent – you have heard many stories when an outsourcer, who looks competent and professional at first glance, gave projects to freelancers.

3. Outstaffing

Outstaffing is a form of personnel management when specialists with the necessary competencies are on the staff of another organization, and the customer pays for their labor time and uses them in its projects.

If outsourcing supposes working on your project outside your enterprise, then outstaffing means hiring technical personnel outside your enterprise who are connected to the project. Sometimes, developers can come to the customer’s office, but this is only sometimes economically efficient. Outstaffing differs from freelancing in terms of confirmed competencies and guarantees of labor discipline.

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Outstaffing of individual specialists will be fully effective if there are project management competencies within the company.

Nuances:

  • The right to choose. Outstaffing allows HR specialists to conduct interviews and select specialists with sufficient competencies.
  • Own management. Within the customer company, professional managers and analysts are needed (but they can also be “rented” if they are not on staff). The main task of the customer’s management is competent management of hired resources.
  • Infrastructure. Outstaffing resources are fully integrated into the work of the team and your ecosystem.
  • Optimization. The contract is signed with another company and can be limited by time frames without any problems.
  • Efficiency. Reduction of risks of overestimation or underestimation in terms of time and resources. The specialist completes the task in exactly as much time as it requires and proceeds to the next one.

What Clients Are the Best for Working With the Outstaff Model?

Our experience shows that the business sphere does not play a key role here: outstaffing agencies work with fintech, retail, IT holdings, and integrators. This working model is perfect for public services and internal corporate systems to achieve equal success.

The size of the project is also not a determining factor. Outstaff is suitable for large projects that require constant development (read – endless) and for those when the goals are reached in 1-2 months and the contract ends.

As a rule, the client already comes with an understanding of what model to work on. In the last few years, large customers from the IT sphere have preferred to keep their expertise in-house and choose outsourced work. But this does not mean that some projects are not outstaffed. In short, everything depends on the project and the client.

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