The Benefits of IT Outstaffing for Startup Businesses
- 2.1 More focused control over the employees’ performance
- 2.2 Cheaper talent gap fulfilling and money reduction
- 2.3 Faster development of software
- 2.4 More innovation opportunities for your product
- 2.5 Fewer obligations in relation to the hired specialists
- 2.6 How does the IT Outstaffing model work in practice?
Starting a new business poses a lot of questions to be thought over beforehand, and IT young projects are no exception. However, among the many issues that startups face, one of the most crucial is staffing. Many companies stumble here, saving time to find the best specialists to cope with the particular tasks, money to hire them and add to the team, or expertise to identify who suits their project the best.
Meanwhile, there’s a way to start things right from the very beginning—opting for IT outstaffing services as a solution. In this article, we’ll discuss the benefits of IT outstaffing for startup businesses, and you’ll know why and how it may work for you as well.
What is IT Outstaffing?
Outstaffing is a business strategy that involves hiring remote workers through a third-party provider. In other words, the third-party provider is responsible for hiring and managing the staff, while the company is responsible for the direction and control of the employees’ work.
This business model has become increasingly popular in the IT industry thanks to the quickness of problem-solving, the flexibility it gives, and cost efficiency it results in. But there’s more to discuss here, so let’s stop on this question on a deeper level.
If you choose outstaffing, what will it bring to you?
This approach provides a number of benefits for businesses, particularly for startups that need to maximize their resources.
More focused control over the employees’ performance
One of the exciting things about IT outstaffing is that it allows you to have more visibility over the newcomers’ performance. This is because the client ordering the exact specialists to be hired can set specific goals and deadlines and monitor their progress closely. Working with the new outstaffed specialist directly, you gain an understanding whether they meet your expectations and achieve the desired results, or not.
Cheaper talent gap fulfilling and money reduction
IT outstaffing also brings cost savings to businesses. For startups, hiring a full-time employee can be expensive, especially when it comes to benefits, training, and other expenses. Outstaffing is often a more cost-effective option as the provider is responsible for these costs. Additionally, you’ll give access to a larger pool of talent, which can help you fill their talent gaps more quickly and cheaply.
Faster development of software
Another benefit of IT outstaffing is getting the means (corresponding skills and expertise resources) to develop software more quickly. It becomes possible as outstaffed employees are often highly skilled and experienced, and they can bring the necessary expertise to the project. Additionally, outstaffing providers often have teams that are specifically trained to work on software development projects—dedicated teams. Overall, you’ll most likely end up completing the project on time and within budget.
More innovation opportunities for your product
IT outstaffing also provides more innovation opportunities for the product you’re going to build or renovate. The outstaffed employees with the required specialization and experience can bring their creative ideas to the project, which gives rise to the completely new level of your product quality. As a result, your solution is more unique, brings exclusive value to customers, and is able to stay ahead of the competition.
Fewer obligations in relation to the hired specialists
Finally, IT outstaffing lessens the number and the severity of your obligations to the hired specialists. As the outstaffing provider is responsible for hiring and managing the employees, it means that the recipient party doesn’t have to worry about HR or administrative tasks. Instead, you can focus on the core business and product development tasks, leaving the routing troubleshooting to the vendor.
How does the IT Outstaffing model work in practice?
To be short, you call the shots, while the provider solves all the chaos around hiring, administration, and work conditions.
Now a bit longer explanation for a sum-up. The IT outstaffing model typically presupposes hiring external employees or teams of specialists to work on specific projects or tasks remotely. These employees work exclusively for the startup company and are managed directly by the client, though they aren’t considered full-time employees and don’t have the same benefits or obligations as traditional employees.
Which companies can share their positive experience with outstaffing?
As more and more businesses turn to outstaffing as a cost-effective and flexible way to access skilled labor, it’s natural to wonder which companies have successfully leveraged this model. Have a look!
Slack is a popular messaging app that was developed using outstaffing. The company hired developers from Ukraine to help with the development of the app, and this proved to be a successful strategy. The outstaffed developers provided expertise and knowledge that the company didn’t have in-house, which helped to speed up the development process. Additionally, the company was able to save money on labor costs by outsourcing the work to a country where the cost of living is lower.
Skype, the popular video and voice calling app, also used outstaffing to its advantage. In this case, the hired engineers were coming from Estonia. They brought expertise and knowledge to create a more innovative and user-friendly app. As a bonus, the company significantly reduced the cost of development, which was crucial at that stage of a startup.
The popular code hosting platform also relied on outstaffing to develop its platform. They hired developers from Poland to speed up the engineering tasks and build a robust and reliable platform in the end.
Tips to choose a reliable outstaffing provider
Do you need some hints on how to choose a reliable outstaffing provider? We’ll leave here a few of them, based on the experiences of successful companies that have leveraged this model.
- Research the provider’s experience and expertise in the industry
- Check references and testimonials from previous clients
- Verify the company’s financial stability and ability to pay their employees
- Make sure that the provider has a solid infrastructure and technical support to perform their work
- Evaluate the clarity of communication to envision its quality throughout the project realization
- Assess the provider’s understanding of the local labor market and their ability to navigate specific laws and regulations.
- Ask them about data privacy and security measures held for their clients
- Consider their cultural fit with and their ability to align with your corporate values and goals.
Gain more flexibility while scaling your team
As you’ve understood, IT outstaffing comes in handy to scale the teams and speed up business processes, which is vital for the startup. Conversely, if the business needs to scale down for some reason, with out staffing, you’ll be able to reduce the number of outstaffed employees without having to worry about layoffs or severance pay.
Hence, it’s a viable option for fledgling companies that are looking to maximize their resources, get more focused control over the employees’ performance, cut down costs, and build software faster.