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The alternative to IT freelancers: benefits of outstaffing model

by | April 15, 2021

Every process in business requires highly qualified personnel. However, companies cannot always afford to maintain a large staff of personnel. That is why the services of attracting freelance personnel and the transfer of business processes to be serviced by contractors are so in demand. Among such services is outstaffing.

What is outstaffing?

Outstaffing is the process of transferring HR management responsibilities to a professional contractor. The service is used to relieve the business of the burden of managing and maintaining staff finances. The employee is now registered with a specialized company, where he is identified in the state and paid. The customer is responsible for allocating the budget for payroll formation. The contractor only distributes it, charging his remuneration. This method enables you to formally minimize the organization’s workforce and delegate HR administration to a partner. Outstaffing’s key characteristic is that it focuses on mitigating risks, financial and resource costs for non-core operations of businesses, as well as optimizing taxes and lowering personnel costs. When it is now clear what is outstaffing it’s time to discover the benefits of this model. 

Outstaffing advantages

  • Facilitate the task of finding valuable personnel. Usually, it takes a lot of time to find talented IT specialists. With an outstaffing model your partner takes over all the responsibility for recruiting and employing, you only need to tell which specialists you prefer. Moreover, such companies normally have a list of specialists from which they can choose a coder according to your preferences and it will diminish the time for searching and ease the overall process.
  • Reduce maintenance costs for staff members. Recruiting, staff support, accounting, taxes, office supplies, equipment, software and so on, in the end, all add up in a pretty sum. Outstaffing is a great way to optimize staffing costs. Costs are especially reduced in the accounting department and the personnel department, which loses some of their functions. The larger the company, the greater the result. Outstaffing also allows you to set your own payment terms based on the amount of work, the number of people you’ll need, and the length of the project.
  • Reduce the administrative and financial burden on the company while maintaining direct management of employees. This is especially true for startups with small IT products, which still have little experience, and for large firms that want to cut some of their managers.
  • Provide flexibility in personnel management. The number of labor force corresponds to the real volume of work. Employees are not idle if they are busy. But at the same time, what if all work is done and a new project hasn’t started yet? You are obliged to pay a salary to people who don’t work. With an outstaffing model, you can manage your resources according to the need. Also, it can work the other way. What if you need a rapid expansion? Such possibility remains too.
  • Boost performance efficiency. Work goes faster if the specialists are good. It’s such a common practice for all the companies to not meet the deadlines. It is quite upsetting when the deadline is approaching faster than the work can be delivered. With first-class IT specialists it can be different. Such programmers can quickly start to work and completely surrender to the company’s tasks

Outstaffing disadvantages

  • Selecting vendors can be a difficult job. With so many options on the market, picking the right company becomes more complicated. Companies from all over the world claim to be the greatest, but you must choose wisely and according to requirements.
  • Communication difficulties. When the in-house and outsourced teams start working together, communication issues arise. Communication now takes longer than face-to-face meetings at the office. When engineers must communicate through several networks, the process of project realization may be slowed.
  • Time zone differences. If you recruit remote staff from all over the world, you can encounter time zone differences. Setting up overlapping working hours to analyze the project’s progress is difficult. Typically, one side will be tired after a long day at work, while the other will only start the day.
  • Distance management and trust issues. When you manage a team in the office you easily can control people and be 100% sure about what your employees are doing. With distant relationships, however, you lose this possibility. It’s crucial to have trust in the people who work for you because it could decide the fate of your whole project or even business.

In general, cost savings should not be the first and even more so the only reason for choosing outstaffing. IT outstaffing is an ideal model for finding important experts, accelerating product implementation and quickly expanding/reducing your development team. It is critical to consider the advantages and disadvantages and choose the best alternative. If you’re unsure, Team4Code will assist you in making a decision. Please get in touch with us if you’d like to learn more.

About Team4Code

Team4Code is a Dutch IT company with a delivery center in Kyiv, specialized in outstaffing services. For various IT solutions, we have dedicated teams. Customers from different European countries use our company’s services. Team4Code takes control of a client’s software creation and optimizes and streamlines the process. We have a completely transparent pricing model and flexible employment options to meet your company’s staffing needs, whether you need one expert or an entire team.