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The Difference Between Outsourcing and Outstaffing Models

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Josephine Layne

Outsourcing and outstaffing are two business models that involve hiring external resources to perform certain tasks or functions for a company. The main difference between outsourcing and outstaffing is the way in which the external resources are utilized.


Outsourcing refers to the process of hiring an external company or individual to perform a specific task or function. The outsourced service provider is usually responsible for completing the entire project or providing a specific service, and they are paid a fee for their services. Outsourcing is often used for tasks that are not the company's core competencies or require specialized knowledge.


On the other hand, outstaffing refers to the process of hiring an external employee or team of employees to work for a company on a temporary or long-term basis. The external employees, also known as "staff augmentation," are hired to work under the direct supervision and management of the company, but they remain employees of the outstaffing company. In outstaffing, the company is responsible for managing and supervising the external employees, while the outstaffing company is responsible for HR and payroll.


In summary, outsourcing involves hiring an external company or individual to perform a specific task or function, while outstaffing involves hiring an external employee or team of employees to work for a company on a temporary or long-term basis under the direct supervision and management of the company. As a result, businesses frequently turn to outside contractors to build up outsourcing and outstaffing arrangements and restore order to the IT industry.

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Josephine Layne
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