What is outsourcing? How does it differ from staff augmentation?

Outsourcing is a strategy that has gained prominence in recent years. It involves outsourcing certain business processes to external partners - companies or independent specialists. This approach encompasses a wide range of services from IT to HR, and aims to increase the operational efficiency and flexibility of the organization.

Table of Contents

• Outsourcing - what does it consist of?
• Staff outsourcing
• Staff augmentation
• Staff outsourcing vs staff augmentation - a comparison
• How to choose the best solution?

Outsourcing - what is it all about?

Outsourcing means outsourcing selected tasks or processes to external companies. This allows companies to focus on strategic activities while reducing operating costs. For example, customer service, marketing campaigns or software development can be outsourced in this way. Success lies in the right choice of areas to outsource - not every corporate function is suitable. However, properly implemented outsourcing can significantly improve an organization's efficiency.

Staff outsourcing

What is staff outsourcing?

Staff outsourcing is a model in which an external company provides employees to perform specific tasks or projects. It is the service provider that is responsible for recruiting, managing and formally handling the hired people, while the outsourcing company can focus on business goals. This type of solution is particularly popular in industries with fluctuating demand for employees, such as IT, logistics and manufacturing.

Advantages of staff outsourcing

The main benefits of this model include:

• reduction of costs related to recruitment and training,
• quick access to specialized employees,
• flexible management of resources depending on the needs of the project,
• the opportunity to bring new experience and a fresh perspective to the team.

In addition, external teams can effectively relieve the company of operational tasks, reducing the risk of overloading its own structures.

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Staff augmentation

What is staff augmentation?

Staff augmentation is an alternative model of cooperation, which involves the temporary expansion of an internal team with external specialists. Unlike staff outsourcing, the company does not transfer the responsibility to an external provider, but only benefits from the additional competencies, maintaining full control over the project and its implementation.

Learn more in our post: Team Augmentation - when is it worth betting on augmenting your team with external specialists?

Benefits and challenges of staff augmentation

The biggest advantage of staff augmentation is flexibility - a company can quickly acquire the competencies it needs, without engaging in a lengthy recruitment process. This model is ideal for short-term projects that require specific knowledge or experience. Keep in mind, however, that with longer-term cooperation, costs may increase, and managing additional personnel may require more internal team involvement.

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Staff outsourcing vs staff augmentation - a comparison.

To make an informed choice on the right collaboration model, it's worth comparing the two approaches:

• Scope of responsibility: In the case of staff outsourcing, the service provider is responsible for task execution and personnel management. In the staff augmentation model, control remains with the outsourcing company.
• Team management: Staff augmentation involves the integration of external specialists with an in-house team. In staff outsourcing, employees operate independently, under the direction of the service provider.
• Cost and duration of cooperation: Staff outsourcing tends to be more cost-effective in the long term, especially for repetitive tasks. Staff augmentation works better for short-term projects or those that require a quick replenishment of skills.

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How to choose the best solution?

Outsourcing, regardless of its form, can be an effective tool to support company growth. The most important thing is to match the model to the specifics of the organization, its staffing needs and business goals. If you are looking to quickly replenish your team without losing control - staff augmentation may be a better choice. If, on the other hand, you want to outsource an entire area of tasks to an external partner - staff outsourcing is worth considering.