Out-staffing is a solid strategy to boost business. Cutting costs is a leading decision driver for companies, that choose this method. It allows them to cut labor costs, overhead, equipment, and technology. Companies also cooperate with out-staff company to focus on the core aspects of the business and fill in the blanks where necessary. This is a cost-effective option when you need to rapidly scale up market share, staffing, and production. Also, out-staffing is an effective tool for the optimization of business processes by reducing the regular staff, direct and indirect personnel costs, and increasing of motivation of employees.

Out-staffing: a New Branch

Outsourcing is a business practice in which a company hires a third party to perform tasks, handle operations, or provide services for the company that were traditionally performed in-house by the company’s own employees and staff. The outside company (the service provider or a third-party provider) completely organizes the work of its employees and monitors the performance of tasks. Outsourcing was first recognized as a business strategy in 1989 and became an integral part of business economics throughout the 1990s. 

Out-staffing appeared not so long ago. This is a new branch of outsourcing, which is optimized for the needs of project work. Many companies have realized that the involvement of external specialists or firms with specialization in certain areas is a very good option. It is more efficient and economical than maintaining a large internal staff.

Out-staffing is the “rental” of a specialist working in a contractor company to work on a project in a customer company. The specialist becomes a part of the client’s team along with other team members. His work is regulated by the management team directly. At the same time, the client pays the contractor for out-staffing services, and then the contractor pays the salary to the specialist.

What are the Differences?

The main difference between out-staffing and outsourcing is that you hire a specific specialist with the knowledge base you need and he receives your work instructions directly. This strategy most often use companies, that engaged in project work for obvious reasons: it is much more convenient, faster, and more transparent than outsourcing, where you do not see a person who exactly fulfills your order. Also, in the outsourcing chain, all information passes through a number of people, which can violate the confidentiality of the project, and can be perceived differently. In the end, the tasks may not be clearly understood and can cause additional problems.

Out-staffing allows you to overcome all these obstacles and is an ideal option for companies with a project type of work.

The Advantages of Out-staffing

Internal Processes

Reduce your labor costs

When you sign a contract with an out-staff company, you cease to be interested in issues such as arranging a workplace, renting an office, and purchasing equipment. You also avoid the cost of employee relocation, because most of them work remotely.

HR-processing

These processes directly affect the employee’s productivity, motivation, satisfaction, and loyalty. It includes winter and summer corporate parties, monthly corporate events, presents, medical insurance, necessary equipment in the office to get rest, compensation, vacation, and sick leaves. By hiring an employee outside, you transfer the responsibility for all this to the out-staff company.

Education and professional development

By hiring an outside specialist, you know that he already has all the necessary skills to complete your task. Education and professional development are not your responsibility. Technical courses, English classes, the process of regular performance reviews – all this is handled by an out-staff company.

Direct interaction

The specialist works directly with the client as part of their team, not as a third party. This allows to have better communication and avoid possible problems.

Flexibility of engagement

There is built-in flexibility through out-staffing as well — in many situations, you only pay for the work you need. You may avoid efforts and expenses for recruiting activities if the project may last less than a month. Also, you shouldn’t keep specialists in reserve. No worries about the employee in case of termination or suspending of assignment, as well to hire a specialist in advance in cases of uncertain project start.

Improve team efficiency through outside expertise

In most cases, out-staff companies have a large pool of specialists with different experiences. Therefore, when selecting a candidate, you get a highly qualified employee with relevant experience who will perform your task as best as possible. Your team can adopt the experience of an external specialist who works for you temporarily, and then use this knowledge in further work. As a result it boosts the productivity and efficiency of your team.

External processes

24-hour production

Thanks to out-staffing you can overcome the eight-hour workday. With proper planning, there is no reason to stop service. By hiring freelancers in other time zones, you have the opportunity to create a 24-hour production cycle. 

When the workload increases

Some businesses go through predictable busy seasons. And at other times they cannot expand their permanent workforce fast enough to keep pace with demand. Therefore out-staffing can help your employees stay on task when their workloads increase. 

Unusual tasks

If your team can handle the bulk of the project, but there’s still a part you’ve never worked with before, that’s no reason not to tackle it. You can hire a specialist to help you complete the project successfully and become part of your team for a while. This is a very good practice that allows you to ensure everything is done well, rather than dealing with a completely different area. 

Partnership

In long-term cooperation with an out-staff company, you can have special bonuses and privileges.

Key Differences of Out-staff Company from Recruiting Agency

Amazinum Out-staffing Model

We position ourselves as an out-staff company and here are the key points of our model:

You save the expenses:

• We care about the motivation, satisfaction, and loyalty of Amazinum employees. It includes winter and summer corporate parties, monthly corporate events, presents, medical insurance, necessary equipment in the office to get rest and compensation for sports activities, etc.

• We provide a workplace in comfortable offices, workstations, and accessories for convenient work and cover all necessary repairing and upgrades.

• Amazinum lecturers manage data science camps, English classes, and other technical courses, as well as the run process of regular performance reviews.

• We have an accountant dept to manage all tax-related processes.

• We cover the efforts for sick leave and vacation and charge for involvement for commercial hours only.

Facilitated recruiting

• We offer only specialists who are employed by the company for more than 6 months already.

• We are ready to offer a few data scientists for interviews to increase the probability of customers confirming the requested specialist.

• In case of the quit of the specialist or the request of the customer, we are ready to offer a list of candidates.

Responsibility

• We provide support from other data scientists and are ready to deliver whole company expertise.

• We provide additional levels for providing feedback and adjustment of specialist performance if needed.

• We have a pool of candidates to replace if needed (in case of quit of the specialist or request of the customer, we are ready to offer a list of candidates).

Partnership

• We keep frozen rates for 1 year and are ready to negotiate flexible rate reviews due to specialist professional growth.

• We are ready to invest efforts to prepare the candidate before an interview – assign a specialist to investigate and learn the required technologies.

• We have no objections if you position our employee as yours for your clients and personally sign an NDA with the employee.

What to Сhoose

There are several main reasons why companies turn to out-staffing:

Fast circulation. If your employees leave before they make a productive contribution to the company, that’s a problem. Its basis lies in the poor selection of candidates, adaptation, and management. An out-staff company can correct this situation.

Rapid growth. When companies need to expand at an accelerated pace, they often sacrifice quality for speed. An out-staff company can meet high-volume needs on time and on budget.

Inefficient recruitment. It takes time, people, and intangible resources like hiring manager satisfaction and candidate experience. Out-staffing can optimize staffing and reduce fill times.

High expenses. Recruiting and staffing costs can hurt hiring. When a company focuses on downsizing, employee quality often suffers. The out-staff company takes over many processes and the result is that the clients get cost reductions.

Inability to fight. A company cannot compete for top talent with an inefficient HR process. This is time-consuming, doesn’t attract quality candidates, and is too expensive. An out-staff company can control and predict its resources, processes, people, and costs. This allows you to compete with others.

Conclusion

Out-staffing is finding the most efficient way to run and grow your business. Companies often choose out-staffing as a way to lower costs, improve efficiencies and gain speed. 

Hiring contractors can help you handle a wide range of challenges while keeping costs under control. This strategy can help companies discover new markets and help business owners focus on their core competencies, without losing at the same time competitive advantages in the market.

The Amazinum team selects the best specialists for you. We have over 40 Data Scientists in the company, who have experience in a wide variety of technologies, business domains, and application domains. We will offer you the best cooperation options that will fully satisfy your needs and help you develop your business confidently and quickly.