Outstaffing vs Outsourcing: which to choose?

Finding the Right Talents for Your Product

Bringing a brilliant idea to life as a digital product requires the right team. But finding skilled IT professionals isn’t easy—and keeping them on your team can be even harder. Instead of building an expensive in-house team, many companies choose outsourcing or IT staff augmentation.

And they’re not alone. According to Grand View Research, global spending on outsourcing and outstaffing is projected to reach $936.6 billion by 2027, growing by 7.7% annually. This trend has become a standard practice in the IT industry worldwide.

Why Companies Seek Talent Outside Their Own Teams

Hiring and maintaining a permanent staff is costly, and there’s a shortage of qualified professionals. IT staffing services solve these problems by giving companies access to global talent pools.

• No Geographical Limits: You can hire the best talent for your project from anywhere in the world.
• Cost-Effective: Salaries are often based on the local market of the employee. For instance, hiring a skilled developer from a country like India can cost up to 55% less than hiring someone with similar expertise in the U.S.

By leveraging external talent, companies not only save money but also benefit from specialized expertise.

Now that we’ve established the benefits of working with external vendors, the next step is choosing the right approach for your business. Should you go for outstaffing or outsourcing? What’s the difference, and how do you determine which option is the best fit for your needs?

While these two models might seem alike at first glance, let’s break down the key differences to help you make an informed decision.

The Power of Outstaffing

Outstaffing in IT is all about hiring remote experts from external providers to tackle specific tasks or projects. To make everything about outstaffing super clear, we’ve put this article in a simple Q&A format. Helping us break it all down is Milan Rathi, CEO at Ravarem. He’ll answer the most common questions so you can easily understand what outstaffing is and why it’s worth considering.

What is outstaffing? 

Outstaffing is when a company brings in remote IT experts or teams from an external provider to handle specific tasks or projects. Instead of expanding their in-house IT team or hiring full-time employees, companies can access skilled professionals on a flexible, as-needed basis.

Which type of projects does this hiring model work best for? 

Outstaffing is a lifesaver for startups. Let’s face it—startups often have a tough time finding developers who’ll join them, especially when budgets are tight and roles are short-term. But here’s the good news: outstaffing isn’t just for startups. It works just as well for small businesses and even large companies. Plus, it’s super flexible—you can bring in remote IT pros for as long or as short as you need, depending on your project.

Here’s how it works: these remote professionals stay in their own location but become a key part of your team, working hand-in-hand with your in-house staff.

Now, don’t confuse outstaffing with outsourcing. With outsourcing, you hand over the entire project (or a big chunk of it) to an external team. Outstaffing, on the other hand, lets you build your dream team by adding skilled experts who work directly under your guidance, like an extension of your company. It’s simple, efficient, and gives you full control.

What are the main advantages of outstaffing compared to hiring in-house?

Outstaffing comes with a lot of perks that make it a smart choice for companies, especially startups.

First, it opens the door to a much larger talent pool. You get access to IT professionals with specialized skills that might not be available locally or might cost a fortune to hire in your region. Plus, it cuts down on recruitment and onboarding expenses that come with hiring full-time employees.

It’s also incredibly flexible. Need to quickly scale your IT team or adjust resources for a project? Outstaffing makes it easy, helping you save time and money while staying efficient.

For startups, budget is often a big deciding factor, and this is where outstaffing really shines. It allows you to tap into offshore talent, which can be significantly more affordable. For instance, hiring developers from countries like India can save up to 40% compared to hiring equally skilled developers in Western Europe or the U.S. On top of that, you avoid costs like setting up workspaces, health insurance, and local tax obligations.

The model is also perfect for short-term needs. Startups often need developers for just 3 to 12 months. In such cases, hiring in-house staff isn’t ideal—most people don’t want to join a team only to be let go after the project ends. Outstaffing solves this problem by offering the flexibility to bring in skilled developers for as long as you need, without the long-term commitment.

With outstaffing, you can focus on growing your business while keeping your development process lean, cost-effective, and scalable.

Can you give us examples of outstaffing vendors in the IT industry? 

There are plenty of outstaffing platforms out there that thoroughly screen programmers to ensure you get top-tier talent. One of them is Ravarem (yes, that’s the blog you’re reading right now! 😊). Ravarem connects you with the top 5% of remote developers worldwide, thanks to a rigorous multi-stage recruitment process.

Here’s how it works: we conduct interviews, assign tests, and perform technical assessments to thoroughly evaluate coding skills. Plus, we go the extra mile by verifying developers’ expertise in real-world conditions through test projects. With Ravarem, you’re not just hiring remote talent—you’re getting the best of the best.

How does the hiring process work at Ravarem?

It’s simple and straightforward:

1. Review developer profiles
2. Interview the selected candidates
3. Choose the best fit

Once you review the profiles of developers that catch your eye, you select the ones you’d like to move forward with. Next, you’ll conduct interviews to make sure they’re the right fit for your project. When you’ve found the perfect developer, the process moves to the next step.

At this point, an Engagement Manager from Ravarem will reach out to you to discuss the project details and set up an interview with your chosen developer. After finalizing everything, you sign the contract, provide the necessary tools, and your developer is ready to dive into the work. It’s that easy!

What is Outsourcing?

Outsourcing is when a company hands over their idea to a remote development team, and that team takes care of delivering the final digital product. The outsource vendor brings in their technical and management know-how, allowing the company to focus on running their business. The main idea behind outsourcing is to cut costs while tapping into specialized expertise and experience that the company may not have in-house. It’s a smart way to get things done without having to build everything from scratch.

Which Type of Projects Does Outsourcing Work Best For?

Outsourcing is perfect for projects that need a full team of developers and project managers to turn a client’s vision into reality. When a project is complex and requires a wide range of skills, expertise, and resources, outsourcing is the best way to bring together a dedicated team that’s specifically tailored to meet the project’s needs. It’s all about having the right people with the right skills, working seamlessly together.

Advantages of Outsourcing Compared to Hiring In-House

Outsourcing offers several benefits over hiring an in-house team for specific tasks or projects. First and foremost, it can save companies a lot of money. Instead of paying for full-time employees with all the long-term commitments and overhead costs, businesses can pay on a project basis or a fixed rate.

Outsourcing also gives companies access to a much wider talent pool, including specialists with skills that might not be available locally. This means you can work with experts in various fields without needing to train or upskill your in-house staff.

Another big advantage is that outsourcing lets businesses focus on what they do best. By handing off non-core functions to external providers, companies can boost their overall efficiency and productivity. Plus, it offers flexibility and scalability, allowing companies to quickly adjust to changing project needs or market demands without the hassle of hiring, training, and onboarding new employees.

Outsourcing also improves time management. It frees up your internal team to focus on critical tasks, which helps with faster project completion and better delivery timelines. Finally, it opens up the opportunity to tap into global markets, giving companies a chance to work with service providers from different countries and gain valuable insights into international markets.

Outstaffing vs Outsourcing: Why Outstaffing Offers More Value

When it comes to choosing between outstaffing and outsourcing, outstaffing often stands out as the more valuable option, especially for businesses that want more control and flexibility over their projects.

With outsourcing, the external company takes full responsibility for the entire project. They manage everything, from the team composition to the development process. While this can be a great option for some, it often means you’re relinquishing control over how things are done and who is working on your project.

In contrast, outstaffing gives you the best of both worlds. You get the expertise and skills of remote professionals, but you retain full control over the project. The outstaffed team works directly under your guidance, allowing you to manage them as part of your in-house team. You can communicate directly with them, set clear expectations, and adjust the team as needed—without the external vendor deciding the direction.

Outstaffing is especially valuable if you already have an in-house team and need additional expertise for specific tasks. It’s ideal for projects where you need to scale quickly and cost-effectively, but still want to maintain tight control over the development process.

If you’re unsure whether outstaffing or outsourcing is the right choice for you, Ravarem can help you make that decision. We offer both services, but we believe outstaffing offers unmatched flexibility, transparency, and control for businesses looking to build a team that truly works in sync with their vision.

Reach out to us today, and let’s discuss how we can create the perfect team for your needs. Happy Outstaffing!