Outstaffing is for Big Companies Only: Myth or Reality?

Outstaffing is for Big Companies Only

They say: Outstaffing is not for me, as my team consists of 10 people. We say: Let’s get to the root! Outstaffing is a fresh trend and… the gold old idea that appeared together with employment.  

Lately, hiring external professionals became more advanced: it has a bunch of faces. In the 20th century, you had to ask Bryan to regularly help your firm with content, design, or even programming and pay for that help. Now, you can google, for instance, talent management services and get things done.

You can easily access people who will find Bryan, talk to Bryan, check his skills, hold his employment contract, and negotiate his salary. At the same time, Bryan continues to perform your business tasks. 

And that modern “Bryan” could be a single remote specialist or a huge tech team. The range of tasks to outstaff is unlimited, and we mean also high-level tasks as machine learning, AI or Mobile development. You set your requirements. 

Why Is Outstaffing Often Associated with Large Companies?

1. One of the primary reasons is the widespread belief that corporations can afford external talent. Obviously, big companies have larger budgets and can allocate more resources to team scaling.

Indeed, the cost-effectiveness of outstaffing lies in its flexibility and scalability. The main reason: you are not to pay mandatory fees that can reach up to 20% and long-term expenses related, for example, to exits or insurance.

2. Some hiring models suggest a minimal number of hires and terms of arrangement that are too big for growing businesses. That’s true.

At the same time, the oustaffing market is full of solutions without such limitations. It can be cooperation with an Employer of Record (EoR). Sure, just the word “EoR” in the list of services still does not guarantee that the solution matches your company size and purposes. On the other hand, if you conduct a little research and communicate with a potential EOR partner, you can get a talent provider compatible with your case.

What to Note When You Are Moving from Startup to Behemoth?

Smaller companies can benefit from outstaffing.  

Hiring worldwide, but not for all the money in the world

When entrusting People Ops to third parties, businesses access remote specialists or teams cheaper compared to in-house hiring or outsourcing solutions. Profitable international hires allow companies to engage professionals with diverse skill sets and competitive rates.

Agility to stay competitive in the market

Choosing an outstaffing model, companies can improve their core business flows like software development or product design. Also, outstaffing is about scaling the projects. It’s a possibility to meet new coming demands without time-consuming procedures and extra expenses related to maintaining an in-house HR department. 

Tailored talent & Tasks of any complexity

Whether it’s a short-term project, ongoing support, or specialized expertise required, outstaffing can provide the necessary resources to meet these demands. Even tech giants are not always capable of filling all the positions in-house. Then, why should startups and small businesses be experts in looking for professionals with niche expertise and verifying that expertise? From that point of view, collaborating with HR Partners becomes attractive.

Cost-effective HR budgets amid the recession.

Companies with decentralized hiring model can react to the changing economic conditions much faster. That refers to various business processes, including HR. When management delegates some business processes to the domain experts like outstaffing agencies, they get a more consistent hiring process and their job offers become more appealing. Thus, companies hire candidates whose performance impacts higher revenues.

Tax optimization & Less paperwork.

Outstaffing partners hold employee contracts, manage tax-related processes and cover taxes. Business owners and other managers have fewer headaches related to being law-compliant and reporting to authorities on time.

How to Mitigate Outstaffing Risks or What to Check When Choosing an HR Partner?

How they handle day-to-day routine.

While outstaffing may become a win-win solution for versatile companies, without a brilliant organization it fades. Communication and coordination between in-house and remote teams are crucial for successful outstaffing arrangements. There are a lot of project management tools for remote teams collaboration. Outstaffing managers should confirm the details of collaboration before the client signs the agreement and establish clear expectations for all the new interactions.

How they ensure security.

Most talent providers take care of client’s privacy and data protection. Among the security protocols your partner adopts, there should be following ISO certification, compliance with GDPR, and CCPA. Outstaffing company can also arrange custom data protection measures related to your business model. Top HR Partners can provide the teams they are hiring for you with secure remote workplaces like Virtual Desktop Infrastructure on AWS. 

How they control quality.

Actually, quality is the key difference when we compare outstaffing and freelance. By dealing with a totally independent workforce, tech business may not have regulated mechanisms to influence the results. On the contrary, outstaffing is about dedicated teams. Outstaffing companies start filling vacancies with a thorough analysis of the candidate’s compatibility with the client’s project. Then, tech specialists provide regular reports on the work done and discuss the results with their manager from the outstaffing company. If some puzzle of this picture is absent — better to be alert.

Conclusion: The Myth is Non-viable

Outstaffing can be beneficial and feasible for companies of all sizes, depending on their specific needs and circumstances. Moreover, it can help your startup meet urgent business demands and grow faster even in the uncertain economic conditions.