IT Outstaffing as an Alternative to Hiring IT Recruitment Agency
When your business requires IT services, it can be a complicated task to decide between outsourcing the services or hiring a local recruitment agency. While hiring local agencies have for many years been the preferred method of accessing professionals, making use of outstaffing services have far surpassed this method when it comes to benefits for businesses.
The worldwide pandemic has forced many businesses to opt for remote working solutions, as more and more professionals have started working from home. No longer are in-house teams a requirement. Businesses are looking for professionals who can work remotely while saving them valuable money and resources.
Hiring remotely is much more cost-effective compared to setting up a team in a physical office. But besides the affordability, businesses using remote workers also have access to a larger pool of international talent and avoid the extra hassles and time on complex admin tasks.
If your business is looking to stand out in a competitive market in a safe way while saving time, money and resources, outstaffing is a suitable model to look into.
What Is an IT Recruitment Agency?
Recruitment agencies exist to find the right talent for available positions in companies. Most often, businesses will approach a recruitment agency to find a suitable candidate for an open position in the company. These agencies source and vet candidates to make sure they have the right skills and knowledge to fill the position.
When a business requires IT talent, they may hire a local software development recruitment agencyto take care of the admin tasks of hiring the right candidates. The agency acts as the middleman and does the advertising, sifting through submissions, and shortlisting the best candidates for the available positions. Other responsibilities of the IT hiring agency include:
- Headhunting candidate. Back and front end development staffing agencies will source local talent with the right skills, knowledge and experience for the client’s role.
- Interviewing prospective applicants and matching them with positions. They will ensure the candidates are prepared by taking them through a vetting process which typically includes interviews and assessments.
- Screening candidates and drawing up shortlists. Furthermore, IT recruiting agencies may screen the candidates by doing background checks and then shortlisting those who have passed the tests.
- Arranging contracts. The tech hiring agency may also negotiate contracts with the client and candidates to ensure they are a match.
Besides the tasks of the software engineering staffing agency, there are also certain tasks the business or client is responsible for. Some of them include:
- Dealing with certain HR issues. The client is still responsible for certain HR tasks such as processing payroll, conducting disciplinary actions, updating policies, maintaining employee records and providing career growth assistance to employees.
- Sorting wages and taxes. Possibly one of the most exacting tasks is having to deal with wages and taxes. When hiring local talent through a software development staffing agency, the client is responsible for managing and paying out wages and taxes.
- Having office facilities in place. When hiring local talent, the client has to have office facilities in place for the candidates to work from. The facilities should also include all the infrastructure and resources, including hardware and software, needed to complete their work.
- Managing the project. When using a local IT recruitment agency, businesses have to manage their projects independently. This means they may require skilled managers or team leaders to lead and guide teams.
Hiring local IT or web development recruitment agencies can take time and be costly. The process includes different steps that can delay a project and it can involve a range of admin and hiring fees. Therefore, this model is ideal for businesses who have the time and capital to invest in local talent.
What Is IT Outstaffing?
IT outstaffing is a type of outsourcing hiring model that involves businesses hiring a dedicated team of professionals that work remotely on their project. In some cases, the remote team can work alongside the businesses in-house programmers, but most often a business will hire a team who works completely remotely. It is fast becoming a major form of hiring. According to Statista, the global outsourcing market stood at $92.5 million in 2019, with the number expected to grow significantly in the coming years.
When businesses want to make use of outstaffing, they will typically use an outstaffing vendor. The outstaffing company will take responsibility for finding the right candidates, employing them and administering the employment processes. Some of the other tasks of the outstaffing vendor include:
- Sourcing and vetting candidates. Remote IT staffing agencies or vendors will source some of the best talents throughout the world and typically have a large pool of candidates ready to hire.
- Managing HR tasks. When it comes to HR tasks, the vendor takes care of the administrative processes such as recruitment and payroll, allowing the client to concentrate on the core aspects of their project.
- Managing wages and taxes. The vendor will usually take care of any payroll and employment taxes of the remote employees on the client’s team. According to ZipRecruiter, the remote developer salary is much lower compared to the in-house developer salary.
- Taking care of office facilities, if needed. Outstaffed professionals work remotely and typically do so from their preferred locations. However, if needed, the vendor will provide for suitable office facilities to work from.
With this model, the outstaffing client also has some responsibilities. These include:
- Managing the outstaffing team. The client has the task of managing the remote team throughout the development project’s timeline. This includes managing time logged, setting goals for team members and reviewing work done.
- Reviewing performance. As tasks are completed, the client reviews the team members’ performance and gives feedback to the workers, as well as to the outstaffing vendor.
- Controlling the development process and project success. The client controls the project’s process and its success. This means they may make changes to the team, set new goals and change tasks responsibilities.
This hiring model is designed to give businesses access to a larger pool of talent, to save them time and to be more affordable. The outstaffing model is ideal for businesses who want to save on valuable time and money.
Comparing the IT Outstaffing Model With the Local IT Recruitment Model
When considering which hiring model is best for your business, there are certain aspects to consider. Not only do you have to analyze the cost involved, but you also have to think about the risks and flexibility involved. Let’s compare the IT outstaffing model with the local IT recruitment model to see how they differ:
|IT Outstaffing||IT Recruitment Agency|
|Сooperation terms||The client works alongside the vendor to find the right candidates and then works directly with the remote workers.||The recruitment agency finds the right candidates, whereafter the client hires the workers as part of an in-house team.|
|Services included||Delegating the searching, screening, interviewing and hiring of candidates, as well as dealing with all the recruitment and accounting paperwork.||Recruiting, interviewing, hiring and onboarding employees using the client’s resources.|
|Pricing model||Clients pay an outstaffing vendor, who takes care of wages for workers.||Client is responsible for agency fees, as well as wages for workers.|
|Liability of a vendor||Sourcing and vetting candidates Managing HR tasksManaging wages and taxesTaking care of office facilities, if needed||Headhunting candidates Interviewing prospective applicants and matching them with positionsScreening candidates and drawing up shortlistsArranging contracts|
|Liability of a client||Managing the outstaffing team Reviewing performanceControlling the development process and project success||Dealing with certain HR issues Sorting wages and taxes Having office facilities in place Managing the project|
|Risks||Possible miscommunication and loss of control in managing teams and project tasks.||The client is responsible for retaining workers. If the project is paused or cancelled, or the business struggles financially, the client is responsible for paying out workers and taking care of retrenchment admin tasks.|
|Flexibility||The client can choose when and for how long the business requires remote workers.||The business has to hire the workers for a set period, typically on a contract base.|
From this, it is evident that the outstaffing model allows for fewer responsibilities and risks for the client. And besides being more cost-effective, it is also time-efficient and more secure to outstaff software development team.
Which Outstaffing Destination to Choose
There are many countries that offer plenty of benefits when it comes to outstaffing. However, you should choose carefully, as there are several aspects to consider that might affect your remote working relationship. Let’s take a look at some of the major countries offering outstaffing development services:
China is one of the leaders in outstaffing. And while they have a large pool of talent available, they are often expensive and the language barrier can be a major problem.
The Philippines offer highly affordable outstaffing solutions, but their talent pool is much smaller and the candidates’ expertise may not always be up to standard.
India is another country with a large talent pool. However, the language barrier may be a major issue for some businesses.
Ukraine is fast becoming one of the leading countries offering outstaffing solutions. The country has many of the top RPO companies with access to a large pool of highly experienced candidates with excellent skills and knowledge, as well as proficiency in English.
It is important to choose the right country and company for your outstaffing needs. Choosing staffing with nearshore teams can mitigate risks of timezone differences and language barriers, while choosing a country that has access to a large pool of talent can increase the chances of finding the right candidates.
Why Mobilunity Is a Preferred IT Outstaffing Company
Mobilunity is a leading IT outstaffing company Ukraine with over 10 years of experience sourcing and providing dedicated development teams for businesses around the world. Our IT outstaffing service in Ukraine includes sourcing developers and engineers from a large pool of talent with every candidate having top skills and knowledge in their fields.
We take pride in working with some of the best clients around the world, including Zenchef in France, Byg-E in Denmark, Network of Arts and esurance in Switzerland and 3e Joueur in Canada. These clients trust us to provide them with top-class outstaffing in Ukraine for their projects.
We follow the following approach to IT outstaffing services Ukraine with clients looking for outstaff team of developers:
We work with our clients to establish an ideal candidate profile for their software outstaffing needs. We then source potential candidates and shortlist the right ones.
We initiate interviews between our clients and the candidates and assist with the onboarding process to make the new remote workers part of the client’s outstaffing development team.
- Ongoing work
We focus on staff retention of our clients’ teams, making sure we get regular feedback from all parties involved in the outstaff development.