What is outstaffing? Goals, work model, advantages and disadvantages

Outstaffing is a type of remote recruiting model in which a vendor provides a specialist or a group of professionals for a client’s project during the contract term. The client can administer and manage a “rented” team or specialist. The vendor selects and hires employees, deals with the legal aspects of cooperation, and pays salaries.

Outstaffing goals

  1. Workflow and budget optimization;
  2. Reducing the number of tasks of accountants and HR specialists;
  3. Risk minimization for the company in the event of legal issues.

Outstaffing work model

This remote recruitment model consists of the following basic procedures:

  1. Recruitment process: selecting candidate profiles, candidate shortlisting, intake meeting, job interviewing, and job offer sending.
  2. Onboarding process: providing a workplace, communication facilities, acquaintance with the products and the company, tracking, and monitoring.
  3. Ongoing process: discussions, tracking project progress, solving problems, fulfilling treaty obligations, and task completion.

Outstaffing advantages

Outstaffing has some business benefits:

  1. Control of employees or team: the customer has the right to manage an outstaff employee and other employees in the state.
  2. Budget saving: outstaff specialist services are cheaper than full-time employees because they eliminate risk management and overhead costs.
  3. Team flexibility: at the end of the project or task, the client can complete, extend, renew cooperation or hire a new team of professionals.
  4. Simple priority management: the client can spare all his time to the project development, and the vendor will deal with all organizational issues.
  5. High efficiency and productivity: outstaff specialists can strengthen the project team and help achieve the set KPIs faster and more efficiently.
  6. Reducing the project cost: thanks to the outstaff team, the customer hires fewer official employees. As a result, the client pays fewer taxes, wages, and related costs.

Outstaffing disadvantages

The outstaffing model has not yet become widely used in business because of existing disadvantages:

  1. Complicated communication management: to probe deep into the matter and join the customer’s team, outstaff employees need time and proper onboarding. As a result, completing a task can take a long time.
  2. Team motivation is a big challenge: full-time employees often root for the project implementation, and for an outstaff worker, it is just another temporary job. It can be difficult for a manager to motivate an outstaff worker to achieve maximum results.
  3. Time zones. An outstaff employee can live and be recruited for outstaffing from another country. Due to the time difference, calls or other communication can be problematic. As a result, pauses or delays in the implementation of tasks.

Outstaffing in Ukraine

The Tax Code of Ukraine still has no term “outstaffing.” Still, there is a definition of the Service for the provision of personnel, and there is also Article 39 on Employment of the population of Ukraine. These two concepts legally secure the existence of outstaffing in Ukraine.

Outstaffing and Outsourcing: What’s the difference?

Sometimes outstaffing can be confused with another popular remote hiring model: outsourcing. To distinguish between these two concepts, let’s define the meaning of the term “outsourcing.”

Outsourcing is the delegation of business tasks to third parties who are specialists in a particular field.

In outstaffing, the customer hires a specialist or a team to integrate into his company with the right to manage, and in outsourcing, an external team independently solves issues. In this case, the customer can comment, and make edits but does not manage the outsourcing team.

Book in a free demo with us
See how PeopleForce can help your company