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Remote Staffing Solutions V/s Outsourcing: What’s the Difference?

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With everyone around talking about it, the growing value of the gig economy is one of the most trending topics today. According to DaVinci Payments, the year 2020 saw gig income grow by about 33%. Being a fan of flexibility, better work-life balance, and new experiences, the millennial workforce is no longer interested in being tied to a desk or a fixed schedule. 

Remote staffing solutions and outsourcing services are two major components of the rising gig economy. Here’s what the two terms mean.  

What are remote staffing solutions?

Remote staffing services help you hire employees in a different geographical location than yours. Remote workers are a part of your organization only, except they are not required to be physically present in the office and can complete their assigned deliverables from any location across the globe. However, they still need to be connected and work in coordination with the in-house team and are governed by the organization’s rules. 

What is Outsourcing?

When an organization subcontracts all or part of its business functions to a third-party agency, it is called outsourcing. 

Unlike the remote working trend, which has become popular only recently, outsourcing has been in the books for quite some time. Having emerged in the 1950s, outsourcing is now considered an effective business strategy for quality and scalability. 

Outsourcing V/s Remote Staffing Solutions

The fundamental difference lies in the fact that in the remote staffing model, the remote workers are your company’s direct employees. On the other hand, in the case of outsourcing, they are part of a third-party firm, and not directly under your administration. 

Both the strategies have their pros and cons. Comparing the two can give a clearer picture of what meets your business preferences. Here are some key questions to ask yourself before deciding on any one of the two.

  • Am I looking for a short-term or a long-term solution?

Sometimes, companies face a skill gap while executing certain business operations and so they look for quick fixes to prevent delaying the project. In such a scenario, outsourcing can serve as a great alternative and help get the work done on time. However, this may not be sustainable in the long run because outsourcing service providers are also occupied with work from other clients, and sometimes, they may not be able to take up your projects, even when you’re on a tight deadline. 

Hiring remote talent through remote staffing services for such jobs can be a reliable solution. Even though it may take some time and effort to put processes in place, it will serve your requirements well in the long term. Moreover, with an in-house team, you can vary the scope of work as per your requirements, whereas, with an outsourcing agency, you may need to renegotiate the terms in case of any changes in the scope of work as already agreed upon. 

  • Cost or Investment?

Outsourcing is the lesser expensive option among the two due to lesser initial investments. You need not own any technology, infrastructure, or invest in the training cost of the employees. All you have to do is, pay a fixed amount to the outsourcing agency and they will take care of the rest. 

On the contrary, remote staffing is high-priced in the beginning, both in terms of time and money. You need to spend on the employees’ hiring, sometimes, training also, plus the overhead costs in the form of employee benefits, equipment, and more. 

Make sure you evaluate the cost-to-benefit ratio for each of them with respect to your business goals and requirements.  

 

  • Who takes charge of the administration and supervision?

Since a remote team is an extension of your in-house team only, it is possible to gauge the progress of work and productivity on a regular basis through set mechanisms. However, in the case of outsourcing, you are not in control of the process; you only get to accept or reject the results presented to you by the vendor. 

The advantage of exercising more control in the case of remote staffing also comes with the added burden of administration and supervision. On the contrary, by outsourcing, you save up on the time and resources required for overseeing operations in detail. 

 

Which one is the best for you?

Most businesses thrive by working out a combination of the two in such a manner that they can make use of the advantages of both models. It is recommended to preserve the core competencies in-house and outsource the mechanical or repetitive tasks so that your team can focus on the company’s core competencies to provide a sustainable and scalable business model. 

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