Outstaffing, outsourcing - what is the difference?

First of all, let's get to the bottom of the matter.

Outstaffing is

A person/team of people who are employees of the company, but their hours are fully paid by the client company. Most often it is full time work on one project. Less often it is part time, in which case there may be two projects.

The customer usually selects one developer or an entire team, conducts an interview, or sometimes more than one. This also includes test tasks and even live-coding.

The manager on the client side is responsible for the formation of the backlog and the setting of tasks. Developers communicate with him directly. All commits, reports and actions are recorded in the client's project management system.

The function of the contractor is to supplement, enhance, or completely replace the customer's team. Usually only one specific function is needed (frontend development, for example).

The manager on the contractor's side handles the overall account and HR support.

The payment format is retainer (when the client pays a fixed amount per month for the developer / team) or time and material (hours worked, multiplied by the rate, ideally with compensation for downtime caused by the client).

Outsource development is

A person / team of people who are on the contractor's staff, and he/she forms teams for client projects at his/her own discretion.

The customer does not interact with specific developers. Most often, he is not aware of how many people of what qualifications are doing his project. Only the result is determined.

Most often, the developer combines projects and switches between them several times a day.

The contractor takes full responsibility for the development or a piece of it. A manager on our side forms the backlog, sets tasks and supervises implementation.

The contractor's manager communicates with the client, sometimes the team leader.

The payment format - most often fix price, sometimes - time & material (as a rule, on a long technical support, less often - the development of "from scratch").

In other words, if the client needs specific people with a certain stack for a project that requires constant development, it is easier to take on outstaff already ready specialists. Our role in all this is to be a hothouse of personnel. To be responsible for the selection, training and motivation of personnel - to create the conditions in which an employee will grow and unfold.

If the client does not have minimum technical competence, no resources for onboarding, setting tasks and controlling execution, no inhouse and no desire to dive into all this, it will be easier for him to outsource a large part of work. The management remains on the side of the contractor, and the customer will only evaluate the result, not worrying about what is going on inside the task.

Almost all employees can work on the outstaff model: analysts, testers, programmers, layout designers. There is very high demand for them on the market right now, and it is far ahead of supply.


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