Do you want to release IT products faster, but don’t know how? Discover outstaffing: in this article we will tell you who it is suitable for and what tasks will be the best fit.
IT specialists for rent: who is outstaffing suitable for?
Imagine you have a mobile application with complex business logic and a variety of integrations, and the in-house team does not have time to finalize it due to lack of time or sufficient expertise. As a result, customers constantly encounter errors and leave negative comments. What can you do?
The classic solution is to launch an HR mechanism: recruiting, onboarding, ramp-up. However, this is not the best option if the task is one-time: the costs will definitely outweigh the profit, which means the ROI will go negative. It is also not the most suitable choice when the project is urgent: according to indeed.com, the average time to close one position is 70–80 days.
The other day, we were contacted by a client who was faced with both problems at once. It was necessary to quickly select a systems analyst with experience in the financial sector to develop requirements for the backend core of a bank’s mobile application. The specialist organized the development of requirements for two teams at once: in-house and outstaff, which was formed from four C# developers. The outstaffing experience turned out to be successful, and for more than a year we have been supplying IT specialists to a banking sector.
What is outstaffing?
Outstaffing is actually renting qualified specialists from a contractor company. Here are some features of the model:
- An employee or a team sells their hours to a customer, usually a full-time job
- Usually work is carried out on one project, less often – on several ones
- The customer carries out a demanding selection of hard and soft skills with test tasks and even live coding
- Setting tasks, creating a backlog, reports and commits take place on the customer’s side. Specialists communicate directly with the project manager
- Payment is carried out as per two models: Time & Materials – rate per hour, less often a Retainer – a fixed monthly amount.
Some may confuse staffing IT specialists with outsourcing. Although both models involve external employees, the role of the customer is very different. In outstaffing, you are a football team coach who strengthens one or another line with outstanding athletes: training, competency assessment and responsibility for the result are on your side. The outsourcing model is suitable for those who do not want to participate in the process. The customer only evaluates the result: victory in a certain stage of the cup or reaching the final.
Who is better off “renting” programmers rather than hiring them as staff?
Let us state once again: a company can consider outstaffing IT specialists when there is a technical leader but the team has not yet been formed. It is also suitable for companies staffed by specialists that do not yet have internal expertise. Outstaffing is a good solution, even when there simply aren’t enough free hands to implement the project.
Hiring temporary employees is suitable in the following scenarios:
- One-time assessment. For example, you are engaged in web development for users and there is a need for integration with 1C.
- Urgent assessment. You have a vacancy for a PHP developer. The project is stalled due to a lack of employees, and time is running out. Hire a developer in a couple of weeks, not months.
- Project takeoff. You need to test a hypothetical – for example, develop an MVP of a web platform for online fitness. All internal resources are attached, so you decide to find several Fullstack developers, speed up the development cycle, and bringing the product to market.
- Niche specialization. Small companies often lack the expertise to solve highly specialized problems. Large businesses consider it unprofitable to hire and pay a salary to a specialist who will be in demand in two out of ten projects.
Why is outstaffing better than outsourcing or hiring?
IT outstaffing provides businesses with the following advantages:
- Cost reduction. Hiring involves recruiting costs: searching for candidates, usually 3-4 stages of interviews, training, onboarding, tax and insurance deductions, costs of organizing the work process, benefits package. With outstaffing, these costs are borne by the partner company, and the customer only covers the hours worked.
- Dynamic teams. When hiring people, a company often loses profit due to downtime. The programmer does not code, but receives a salary, which means he brings losses instead of income. In this case, he may face a new task in a few months. Dismissal will be even more expensive given the upcoming recruiting (again!). With outstaffing, costs are optimized, and the team will always have only the right specialists.
- Guaranteed expertise. Often a business needs more than one month to ensure that an IT specialist is highly qualified. If the task is urgent, competency assessment may be superficial. As a result, the “wrong” employee will do more harm to the project than good. Outstaff contractors provide access to a pool of proven candidates with real work experience. Moreover, if the developer suddenly runs away, the company will quickly and free of charge find a replacement, which means the work process will not stop.
- Investment attractiveness. Fixed costs of hiring and maintaining employees will move into the category of variable costs. This means that liabilities will decrease and the balance sheet will improve. At the same time, the investment attractiveness of the company will steepen.
- Breaking the deadlock. Outstaffing allows you to quickly attract a qualified expert who will help the in-house team find a solution when working on a project. It often can be solved easily by simply taking a fresh look at it or at a different angle.
- Test drive of a specialist. Not all outstaffing providers afford this opportunity, but at some of them you can hire the employee you like on staff after the project work. This allows you to immediately evaluate a specialist in action and quickly involve him in long-term work.
- Focus on what’s important. Businesses often lose productivity by being scattered across many small tasks. By entrusting them to an outstaff employee, you can calmly deal with the main processes and being completely confident that the secondary ones are in good hands.
Verdict: to rent or not?
If you need to strengthen your development team, outstaffing is an effective solution that will reduce the time and costs of building a competent team. Essentially, you are renting the talent, leaving the legal responsibility for hiring on the contractor’s side.