Types of Outstaffing and Remote Web Development
Guided by one of the important aspects of outsourcing – building a business relationship at the “customer-performer” level, the outsourcing models are distinguished the following way: horizontal (American), pyramid (Japanese) and mixed. ln contrast to the horizontal model in which a larger number of executors solve one assigned task, the pyramidal model implies longer-term cooperation with the possibility of developing industry and intersectoral clusters. At the same time, in the practice of outsourcing European countries, including outstaffing Ukraine, there is a mixture of pyramidal and horizontal models which bring to the emergence of outstaffing team and agencies that will satisfy your needs.
What Is Outstaffing?
Outstaffing (or as it is also called remote web development) is a process of providing the employer with needed dedicated teams or dedicated developers they lack. It is getting popular nowadays due to the lack of professionals, such as dedicated software developers, Project Managers and QA engineers on the local market of employers. It is often mixed with outsourcing or is mistakenly regarded as the type of it.
Is There a Difference Between Outsourcing and Outstaffing Dedicated Teams at All?
Answering the question – yes, there is, and it’s huge. The only thing they have in common is in both cases you are working with people remotely. But with outsourcing you are paying for your project to be done, so you absolutely don’t care who is working on your projects, and with outstaffing and software maintenance you are hiring real people and working with them, remotely though. In order to get things clear and not to mix up the terms, let’s figure out the difference with the help of visualization.
- Outsourcing is a process of handing projects, activities or functions to a third party, which has all needed resources to conduct it – such as qualified staff and equipment.
- Outstaffing is all about the staff itself. If you wonder what does outstaffing mean, it is when a company lacks web developers to develop a project and needs to extend the team and reduce staff expenses, so they are looking for a remote developer with a certain technology, it basically “rents” them from the provider of such services and very often such experts can be found in Ukraine.
Depending on the tasks that are transferred to the decision by the performers, the following types of outsourcing can be identified:
- Production outsourcing – transferring production functions to the contractor
- Business Process outsourcing – transferring processes to the contractor that are not the main activity of the customer
- Software development outstaffing or outsourcing – transferring the maintenance of the customer’s information systems (for example, the development or maintenance of software, the creation of websites, the maintenance of related equipment). Thus, the transfer of non-core and highly specialized activities of the customer is one of the indisputable advantages of the outstaffing software option.
Pros and Cons of Outsourcing vs Outstaffing
So let’s deep into a more detailed comparison of outsourcing vs outstaffing and see what pros and cons each model has. And if you doubt what way of hiring is better for you, we hope this will be useful for you to finally decide and make the first step.
|– Full-cycle project development||– Time-zone differences||– Full control over a project||– Time-zone differences|
|– In-house experts (developers, project managers, QA engineers, designers, marketers, etc) available immediately||– Language barriers||– Project’s priorities can be changed any time||– Language barriers|
|– Cheap development services (depends on the outsourcing country one chooses)||– Team size can be easily scalable||– Limited control over a team|
|– Unlimited control over a project and team members||– Costs saving due to the absence of project manager, business analysts, and quality assurance processes|
So if we talk about outstaffing vs outsourcing, the main difference between these two models is that outsourcing refers to the full project support, otherwise outstaffing model provides the hiring and maintenance of a remote developer or an outstaffing team.
When deciding on outstaffing software, companies often rely on the following advantages of outstaffing:
- Reduced costs. Reduction of payments, as well as the absence of an additional social benefits package, which the employer provides to its staff members, and the replacement of existing employees at no cost.
- Flexibility in cost-sharing. It includes drawing up a work schedule, mobility and reduction of permanent staff, attracting temporary labor depending on the need.
- Access to the best professional skills. It can be achieved by replacing existing employees, accessing local labor reserves, and methods available to third-party independent companies.
- Predictable, standardized (international) processes. Leadership and quality of contractual work, the impact on the margin and net profit of suppliers.
- Concentration of capital and rebalancing of regulatory or business risks. Especially applicable to the financial services sector. The concentration of professional skills, technology, and internal interaction to solve problems.
However, the practice of outstaffing in many countries can also cause a negative attitude. Opponents criticize outstaffing, arguing the loss of jobs during the dislocation of production processes, which is especially noticeable in the industrial sector. ln defense of outstaffing, arguments are made about the more efficient allocation of resources, which, in turn, is consistent with the market economy specifics in the world.
Which One Is Better: Outstaffing Agency vs Company
Let’s take a look at the main differences between the outstaffing agencies and outstaffing companies.
1. The scale of services provided
Outstaffing agency will have a narrow specialization and can provide specialists who perform specific processes and thereby provide the most effective and high-quality result. Such agencies are often founded by a team of specialists who in turn educate their engineers and adapt their skills to the needs of specific services and operations. In this case, outstaffing employees from an agency will offer services of narrow specialization – whether it be marketing, content creation or web development.
However, the downside to the high quality of the outstaffing services provided is that such companies are not multi-tasking and have virtually no experience in conducting several operations and processes at the same time. Therefore, their potential in the volume of outsourcing is small enough, but in the event that a company interested in outstaffing employees for only one of the processes, such agencies are the best solution.
If an outstaffing company does not need to separate all its processes, a large number of contractors will only complicate the control over the workflow. In turn, the efficiency of working with an agency decreases significantly. Therefore it is more convenient and profitable to hire the outsourcing company.
The outstaffing company captures more processes, as they usually have several teams or departments within the same company, which means they can be highly efficient in several processes at the same time. Huge outsourcing companies can provide very flexible and convenient prices for their services and are an attractive resource for many start-up projects looking for outsourcing. At the same time, the quality of such companies may be slightly lower than that of specialized agencies. Since such companies can simultaneously provide services to a large number of customers, therefore, the quality may decrease. In case if software development outstaffing is needed, the best solution will be to use the outstaffing company, as the project manager will assume quality assurance and control over developers, analysts, and IT specialists.
On the other hand, an outstaffing corporation will be able to provide you with all kinds of IT product development and support, but sometimes it is much more profitable to divide services between small agencies or teams in order to increase the quality of the service provided.
2. Availability of specialists and selection of companies
In this case, the search for specialists and the methods for selecting a company that will provide you with a service vary greatly. However, it is always crucial to remember what does outstaffing mean and what can it bring to your company. When it comes to small projects, finding freelancers for signing up outstaffing contract is specifically difficult. It is necessary to carefully analyze the portfolio of specialists and proposals from small companies or single professionals before entrusting them with the work on your project. It’s also crucial to pay attention to what type of agreement you will have when cooperating with a single specialist or a team. Sometimes, the cooperation with an agency or company who will provide you with a team of specialists working on your project is more sustainable and safe variant.
If we are talking about agencies and professional teams, the selection process may take longer. And since service agencies provide a narrow range of outstaffing services the control and verification of their specialists should be checked much more carefully.
Finding an outstaffing company is much easier and more accessible. Checking the company through its corporate website, the practice of working with different projects, as well as their portfolios are usually easily accessible. At the same time, it is quite easy to find companies on the Ukrainian market that will provide a wide range of services and already have quite substantial experience with many large and large-scale projects.
3. Independence and reliability
Due to the specification of the services provided, service agencies may cooperate on a quite independent outstaffing agreement, which can be quite beneficial for individual customers. If you want to provide a small team or freelancer with work, you are guaranteed to get the right specialist without interrupting the processes within the company. On the other hand, lack of control interferes with the transparency of the services provided, and this may interfere with the quality control of the final result.
When working with companies, you can demand more careful monitoring of processes, create a more strict outstaffing agreement to ensure that their reliability is verifiable. In this case, the company is likely to provide reports on the stages of work, clear responsibilities according to outstaffing contract, clear teamwork and the result on time.
Large outsourcing companies with project manager control over specialists are much more reliable and cohesive, so you can rely on them. But at the same time, all regulations of cooperation with the outstaffing corporation can be more energy-intensive and formal, while independent agencies can work exclusively for you.
As a result, the differences between agencies and companies can be significant and completely fit or contradict your original needs. To make the right choice in the direction of the agency or company for outstaffing in Ukraine, you need to clearly assess your preferences and the amount of outsourcing that you need. If you need highly specialized assistance, it is much easier to contact an agency that provides you with these services (for example, cloud hosting or testing). If your team lacks several specialists, you can “rent” them in such a company for a certain period of time. Such employees may even work exclusively on your project, but they will not have to be hired on staff for several months.
One of the best outstaffing solutions is to open an entire office in Ukraine: with a project manager, developers, designers, testers, business analysts, HR managers, and accounting. The latter option could save a large amount to your company: the cost of maintaining an office and outstaffing in Ukraine is about $ 500 per month, and in San Francisco, all $ 10,000. It is clear that outstaffing Ukraine specialists look quite beneficial both in terms of cost and experienced workers.
If you need a complex type of services that you want to outsource, it is better to contact a reliable company with experience and a proven team, that will become one of the most efficient outstaffing solutions for you.
Types of Outstaffing and Remote Web Development
Now, when the difference is clear, let’s talk about the existing types of outstaffing. There are several of them:
Outstaffing in its first and main meaning. The term itself is quite rare and still remains unfamiliar to many people. There are also other synonyms: remote web development, dedicated teams recruitment, IT staffing. If you look for a workforce which you don’t have at the company now, this can be the best way of getting it. Usually, an outstaffed remote developer stays under the roof of the company, which outstaff him/her. A company that wants to hire dedicated developers usually prefers experts to work remotely but to dedicate the whole time to their project only.
Relocation services as a type of outstaffing involve not the only search for an expert but their relocation as well. This means that a company or a client that wants to hire dedicated developers asks for a recruiting company to find dedicated software developers of outstaffing development teams who can relocate to another city or country (the second variant requires preparation of working visa).
Relocation within one country or a city can be easily performed since it doesn’t require any time on preparation of additional documents. The process is quite simple. When the employer has decided on what types of developers, designers, QAs are needed for the project, he applies with a request to the outstaffing software development partner which provides such services and after signing the contract with all discussed requirements the work can be started promptly.
Relocation to the foreign country takes more time, but is surely worth it, because as a result, a relocation software development partner helps a client hire dedicated developers and build outstaffing development teams which they lacked, and can implement all ideas into real projects.
Remote Web Developers Salaries
Remote working is when a company hires an employee who works away from an office, either from a hub or home, and communicates with his outstaffing team lead, project manager, or a company via phone, messengers, or emails. This type of employment allows workers to be more flexible, while employers save huge amounts of money hiring such workers. Even some of the most popular services and products have been outsourced for development, like Slack, Skype, Opera, BaseCamp, GitHub, etc.
We’ve made a research on salaries of developers and checked remote web developer jobs in the UK, the USA, Germany, Switzerland, Israel, Belgium, the Netherlands, Ukraine. Below you can find the rates of a software developer working in-house and of those who work for an outsourcing company. This logic is also applicable to any remote programmer including remote web application developer that works for an outsourcing company.
|Country||Average annual salaries of software developers||Average salaries of remote software developers*|
*These are annual average software developer salaries with additional 30% to the rate added by outsourcing/outstaffing firms.
According to the chart, the highest rates of remote web developers are in Israel and the USA, followed by Germany and the Netherlands. The UK and Belgium remote devs who work on outsourcing, offshore, or nearshore development projects have average annual salaries at the same level, while Ukrainian remote web developers have the lowest annual salaries.
Top 10 Reasons to Hire Remote Development Outstaffing Team
Are you looking for a great dedicated team for your project or startup? If you have no idea where to start with and whether to use the services of remote developers, check 10 benefits of hiring a remote team of devs at a web development agency. Remote workers are available in many outstaffing companies as well as in IT offshore outsourcing companies and you just need to choose the most suitable one:
- Remote work is the future. IT industry in the USA is quickly shifting to remote employment. The number of remote workers has grown by 115% within the last 10 years.
- Satisfaction. According to the Stack Overflow survey (2017), 53.3% of developers reported that remote job is their priority when looking for a new one. Remote full-time workers have the highest rate of job satisfaction.
- Less stress. Employees who work remotely have a better balance in life, so their health and wellness are improving too, and they get less stress when working.
- 11 days of life. A front end web development remote team members gain back the equivalent of eleven days each year because they don’t have to go to the office every day.
- Flexibility. The working hours of developers are up to you. You can ask for full-time or part-time remote web development from your outsourcing software development partner, depending on your specific needs.
- Costs. If you compare local vs remote web development, the latter is much cheaper due to no tax and office-related expenses.
- Higher productivity. Productivity is increased when workers are not interacting with each other for a long time. So if you hire devs for remote freelance web development, they might be more productive than those working in an office.
- Less staff turnaround. Remote workers tend to stay at one place for a longer time than those who work in an office.
- Talent pool. Hiring from outstaffing and outsourcing allows businesses to access much larger developer talent pool as they are not limited to geography and location.
- More engagement. Remote development agency and workers report more engagement into the job than when they were working in-house.
Taking into account the whole list of benefits you get from a remote team of developers, we advise you to consider hiring a remote web development company. Remote hiring has already been a global tendency in 2015 and most likely it will still grow in 2019 as well.
If you are eager to find a good outstaff specialist for your project, it is important to be sure that this person will be able to provide all the necessary services for you at the highest quality possible. To achieve this, it is important to check his portfolio, list of projects or services, as well as draw up a good contract agreement that can protect your interests. To do this, make sure you find a good outstaffing contract sample on the open resources and check that all the sub-clauses in your contract are settled and transparent, or entrust its creation to a specialist. In search of a reliable outstaffing contract sample, you can take a look at this source. But basically, any type of signed agreement will work fine with an experienced and credible employee.
Why Software Outstaffing Team is a Great Solution?
Outstaffing is very good cost-effective service provided for long-term projects. In most cases to hire dedicated teams of developers who will work remotely is 50% cheaper than to spend time looking for needed experts, interview and hire them in-house, increase operating costs and expenses for personnel instead of improving a company’s focus and productivity.
When employers from other countries are considering to hire dedicated developers for their project, it is important to take into account the level of professionalism of the staff. Ukrainian developers are chosen for their talent, high level of education, flexible approach to projects, reasonable cost for the provided services and convenient location. They are often chosen as dedicated software developers, when an employer wants to reduce the cost of the overall development, and get a high-quality product at the same time.