Outsourcing vs. Outstaffing: What’s the Difference?

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Outsourcing vs. Outstaffing: What's the Difference?

Many businesses prefer to outsource or outstaff their projects rather than build an in-house team.  

Outsourcing and outstaffing are both popular options and have their advantages and disadvantages. 

Is outsourcing the right choice for your company? Or, will you benefit the most from outstaffing? Let’s take a look at each option and where each makes the most sense.  

Outsourcing vs. Outstaffing: What’s the Difference?

The primary difference between outsourcing and outstaffing is the level of control each option provides. 

Outsourcing refers to overall project support, whereas outstaffing involves the hiring and maintenance of individuals. 

What is outsourcing?

Outsourcing refers to the process of transferring tasks and functions to an external agency specialized in a relevant field. 

There are many different types of services that external agencies provide. This ranges from customer service, web design and development, software engineering and programming, copywriting, digital marketing, and more.  

Outsourcing helps businesses save money by eliminating the need for full-time employees in certain areas. 

This means that the outsourcing provider has a dedicated team that will be responsible for performing all tasks. The whole project responsibility is on the contractor company. When it comes to communication, the client company communicates with the project manager of the outsourcing agency about the latest updates, deadlines, and requests. 

Outsourcing Pros & Cons

The advantages of outsourcing vary greatly depending on the type of outsourced service, the company’s needs and goals, and the provider selected. 

The advantages of outsourcing service providers are: 

1. Quality and delivery are the responsibility of the outsourcing company 

Outsourcing companies need to ensure high-quality service that meets the client’s expectations in a timely manner. The outsourcing company should provide regular feedback on performance and identify areas of improvement if necessary. This ensures that issues are addressed quickly and effectively, ensuring that the client is satisfied. 

Communication between both parties should be ongoing so as to ensure smooth progress throughout the entire process. 

Finally, it is important that outsourcing companies have a structured approach to managing risks associated with the project, such as changes in customer needs or unforeseen circumstances. 

2. Less management effort is needed from the client company 

Since the client doesn’t lead the team, the client company can focus on its own core responsibilities. The external team ensures that everything is in order. Additionally, businesses save money in the long run since they don’t have to hire full-time employees. 

2. Reduced costs 

Outsourcing your services to a remote team is much more affordable than hiring a full-time employee. Plus, remote teams are often more efficient as they are not restricted by office hours and can work on projects when it best suits them. 

Outsourcing is considered efficient because it operates at a cost per hour. The client pays only for the work the remote team does directly in the process. 

 3. Access to a large pool of talent 

Outsourcing gives you access to a unique set of skills from all over the world. You can choose from a variety of options, such as freelancers and agencies, depending on your specific needs. 

Outsourcing gives you access to a large talent pool because you can hire people from different countries instead of your own. 

4. Enhancing the efficiency of in-house staff 

This means you can get quality assistance with tasks and projects that would otherwise be too time-consuming for your existing employees. Outsourced personnel can also provide specialized skillsets or technology that may not be available within your organization. 

You can also take advantage of the latest technology and processes that would be difficult or expensive to develop internally. 

The disadvantages of outsourcing providers are: 

1. Communication issues 

When outsourcing, there can be language and cultural barriers that make it difficult to communicate effectively with the third-party provider. This can lead to confusion and delays in delivery. 

2. Security 

When a company outsources, it needs to put its trust in an external provider to handle data securely. This can be concerning for some companies who are worried about the security of their confidential information. 

3. Lack of innovation 

When a company outsources, it may not benefit from the same level of innovation as an internal team. Without proper communication and collaboration between teams, it can be difficult to implement new ideas or take advantage of emerging technologies. 

 If your in-house agency team is overwhelmed with projects or you have a job opening that seems impossible to close, you can always consider teaming up with an external agency.  

Popcorn Recruiters is a team of IT and BPO recruitment experts ready to close even the most challenging roles. We help our clients apply data-driven hiring techniques, Agile and Lean recruitment approaches and implement the latest sourcing and engagement strategies that guarantee better success with passive candidate pools.  

What is outstaffing?

With an outstaffing company, you are creating an extension of your team by hiring a remote team who will work on behalf of your company. However, the main difference is that these people do not become full-time employees. Instead, you team up with an external agency and pay for their services only. 

The remote team is responsible for all the job duties for you but is officially employed by an outsourcing agency. This means that the outsourcing agency is responsible for wages, bonuses, and all the necessary equipment, while the client provides an outstaffing team with tasks and assignments. 

Outstaffing Pros & Cons

Outstaffing enables companies to quickly acquire skilled professionals while avoiding the time and expense of a recruitment process.  

Here are some of the benefits of outstaffing that are driving many businesses to use it: 

1. Great for emergencies 

If you have an emergency, hiring an outstaffed team allows you to keep your project running without causing significant damage to the final product. 

2. Full control 

Hiring an outstaffed team simply means bringing on an employee you can manage on an equal level with your regular team members. It allows you to have complete and direct control over the entire task-completion process. 

3. Flexibility 

An outstaffing company allows you to have flexible control over the number of hired employees in your teams. Depending on the current projects, you can increase or decrease the number of tailored contractors as needed. 

The disadvantages of outstaffing:  

1. Limited control 

When you outstaff, it can be difficult to monitor the quality of work being produced and ensure that tasks are completed on time. As a result, there is less control over the entire process which can make it more challenging to produce a consistent product or service. 

2. Difficult to build relationships 

 It is often difficult to create strong working relationships with outstaffers as they are remote and not part of the team. This can make it harder to motivate them and ensure that they feel like a valuable part of the organization. 

3. Cultural differences 

When you outsource to a different country, there can be difficulties due to cultural differences. This includes different working hours and practices, which can make coordination more challenging. Additionally, outstaffers may not understand the same ethical standards that you would expect from your own employees. 

Popcorn Recruiters is a specialized recruitment agency that helps expand the search to foreign candidates in local markets as well as incredible talent abroad. We support a diverse portfolio of international and local companies, from start-ups to global corporations. We specialize in IT recruitment but also successfully fill business roles (accounting, administration, HR, customer support, etc.)

Outsourcing vs. Outstaffing: Which should you choose?

When it comes to hiring additional help for your business, two popular options are: outsourcing and outstaffing.  

Each of these methods can be beneficial in certain situations, but they may not always be the most suitable choice for all businesses.  

To choose the right method for you, it’s important to understand how each one works and which model is better suited to the initial needs, goals, and capabilities of your business. 

How can Popcorn Recruiters help you? 🍿 

Popcorn Recruiters is a recruitment agency with a significant difference: we’re border-less. Located in Sarajevo, Bosnia and Herzegovina, we are in touch with ambitious and talented professionals across Europe.  

With a deep pool of IT and foreign-language speaking talent, our Popcorn Recruiters are leading the way to successful matches.  

As a specialized agency that focuses on recruitment and staffing for IT and operational business roles, Popcorn Recruiters are your go-to partners for filling one or more roles in your company.  

Thanks to our pool of qualified candidates, we offer our clients fast, flexible, and reliable solutions to their hiring needs. Our experienced and certified IT recruiters are equipped to find the best talent to meet your specific needs. 

Looking to grow your team and hire smarter? 

Let’s get in touch! Set up a consultancy call with our team and we’ll help you determine which recruitment service is the most suitable for your needs.