Outstaffing of IT specialists is a highly demanded service in the market. The main reason for this is the lack of staff.
Let’s say a bank came up with a new service for users – a financial application for teenagers. To launch, you need to conduct research, develop a business model, draw a design, write texts, make a software part. But there are no human resources for the task. The necessary specialists are already inundated with their projects. In order not to waste time looking for new employees, the bank turns to a special agency and hires a temporary team. The IT Outstaffing Agency is responsible for salary, hiring, taxes and other HR processes. This is called outstaffing.
In simple terms, outstaffing is when a company “buys out” the time of specialists from a third-party organization for the implementation of projects or tasks.
How outstaffing works
Most often, this is full-time work on one project for one business. Maybe part-time, but then the employee takes on other tasks so as not to be idle.
The business buys the hours of the
front-end web development company: it pays a fixed price per month or for the hours worked by the team or employee.
The client himself forms the requirements for the product, draws up tasks, determines priorities, and appoints a manager. On behalf of the business, he communicates with IT specialists and accepts work. Project activities are carried out in the client project management system – Jira, YouTrack, Asana, Wrike.
The outstaffing company deals with labor and financial issues. Also, its functions include the addition, strengthening or replacement of a specialist or team.
Types of outstaffing are:
- Permanent. To reduce the staff: employees still work for the same company, but are officially registered in another organization.
- Project. When a business needs outstaffing of IT specialists for certain tasks – a new product or feature.
Needed to complete one specific project or task. When the project ends, the outstaffer selects a new project for the employees.
When a business needs IT outstaffing
If the company does not have a specialist with relevant experience and expertise.
There is a specialist, but he fell ill or does not have the necessary competencies. And the project needs to be launched in a short time.
If you need to speed up the development time to bring the product to market on time or improve performance.
Technical debt has accumulated, which puts pressure on the team.
You need to hire employees who are difficult to register. For example, foreign experts. The outstaffer will solve the issues with documents and registration.
We need to cut staff costs. Using outstaffing, a business saves on specialists, salaries of the accounting department and the personnel department. Outstaff employees do not need to pay insurance and severance pay.
It is necessary to free up the time of key employees of the company to work on strategic tasks and focus on the development of the core business.
If staff is needed for several months to implement a specific task or for a specific project.
Business can’t find a specialist for a long time. For example, a developer with a rare technology stack.
Cons of IT outstaffing
The main disadvantage is the risks of cooperation with an unscrupulous outstaffing organization.
The contractor may not perform or not fully perform his duties, suddenly increase tariffs or change the terms of the contract.
Outstaff employees can burn out if they receive uninteresting projects and tasks or insufficient financial motivation. The customer cannot influence these factors.