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Outsourcing and outstaffing
The software industry is constantly growing, actually during the pandemic its growth only accelerated. In 2022, the market revenue in Europe is estimated at 150 billion dollars plus, and is forecasted to grow to 162 billion dollars in 2023 and almost 200 billion dollars in 2027¹. There is high demand for qualified IT specialists and developers and many development teams are constantly short-handed. When you find yourself, your business or your project in the situation of having much higher development needs, you often turn to subcontracting i. e. outstaffing or outsourcing
Outsourcing
It’s an IT hiring model, when the contracted company, with their staff and resources is entrusted with a whole project from end to end. The client typically has no control over and no contact with the development team – basically, the whole project is being transferred to the contracted company.
Usually, the client is an enterprise having a particular idea, but without the needed know-how in order to complete the task. Hence the decision of delegating the project to use all of the possible resources to make it to perfection.
Advantages of outsourcing
- avoiding extra expenses (e.g.software purchase or equipment)
- delegation of recruiting, training or administration
- no need of day-to-day management
Disadvantages of outsourcing
- costs – outsourcing is more expensive than outstaffing due to the fact, that all of administrative work is on a contractor end
- necessity of spending a fair amount of time on task and project planning
- no direct supervision over the process
Outstaffing
Outstaffing is based on hiring qualified professionals for certain tasks, based on client’s demands. Basically, they receive a developer with all of the functions of one of their employees but having been officially recruited by the contractor so the responsibility of paying wages and taxes is on their side. The client has more direct communication with the employee and is able to manage and control the working process at every stage.Often, the cooperation is based on remote work.
Advantages of outstaffing
- all of administrative and recruitment work is on the vendor’s side
- more direct access and supervision over the working process
- flexible hiring model
Disadvantages of outstaffing
- need of excellent communication between the external employee and the rest of a team – otherwise the cooperation may be problematic
- the project is in its entirety the responsibility of the client
Now, based on those information, you can choose what is best for you and your business. We, Netinteractive, will be happy to help you with the decision-making process, and encourage you to check out our outsourcing and staff augmentation offer.
¹ Statista software market revenue, https://www.statista.com/outlook/tmo/software/europe#global-comparison
