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Ways to speed up development: outstaffing – pros and cons

speed up development

"You guys are expensive! For that money, I'd rather hire in-house developers!"

This is often what startup founders say when considering the option of hiring a team through an outstaffing agency. However, the outstaffing market continues to exist, and many turn to it to tackle challenges in building IT projects.

Let's take a look at when outstaffing can be a valuable tool for accelerating product development and when its use may be unjustified. We'll discuss key aspects to pay attention to and share experiences with this approach so that you can make informed decisions and effectively manage your project.

Benefits of outstaffing

Access to skilled professionals

One significant advantage of outstaffing is the ability to quickly tap into a wide pool of highly skilled professionals. This is especially relevant for startups that need to rapidly build technical expertise not currently present in their team. For instance, if you want to implement AI mechanics or smart contracts in your project, it's easier to bring in the right specialists through outstaffing rather than going through the lengthy process of hiring, dealing with interviews, and validating candidates.

Flexibility and scalability

Outstaffing provides companies with flexibility in managing resources and the ability to scale the team according to the project's current needs in a short amount of time.

Nico Bordunenko
Today, you might need a team of 3-4 frontend developers, but tomorrow, just one could be sufficient. Quickly scaling up or downsizing a part of your team is most convenient through interaction with outstaffing.
Nico Bordunenko
Nico Bordunenko
Project manager at MetaLamp

Cutting down on hiring time

The process of hiring developers can take up a significant amount of time. On the flip side, outstaffing allows you to significantly slash that period. Agencies specialized in outstaffing typically have access to an extensive database of specialists, making it possible to find suitable candidates in record time.

Bogdan Gavrilets
Imagine your project has fallen behind the planned release schedule. You realize that you need additional specialists (2-3 developers) to catch up with the deadlines. However, it's evident that hiring them could take some time, and, moreover, it would distract the team from tasks directly related to development. In such situations, it's easier to turn to outstaffing.
Bogdan Gavrilets
Bogdan Gavrilets
Startup entrepreneur, Founder of MetaPool

No employer commitments

Outstaffing takes the client off the hook for a bunch of administrative hassles and expenses tied to formal employment stuff. Having no responsibilities for paying salaries, handling taxes, social benefits, and other payouts makes managing resources a breeze and cuts down on administrative headaches.

Potential drawbacks and risks of outstaffing

High Cost

The major barrier when working with outstaffing teams is their relatively high cost in the market. In absolute numbers, hiring in-house is likely to be cheaper than bringing in specialists through an outstaffing model.

Roman Shtih
I see outstaffing as a way to solve issues through money. If you're tight on deadlines but have an extra budget, then outstaffing is a good option. In this case, you pay for a quick selection of several specialists and quickly catch up with the deadlines.
Roman Shtih
Roman Shtih
CEO at MetaLamp

Vendor Lock

When working with outsourced teams, a situation may arise where employees from the outstaffing agency possess key competencies and understanding of how your project is structured. In this scenario, you become dependent on the contractor.

Additional Security Risks

If your project involves critical security protocols (e.g., in fintech or medtech industries), working with an outstaffing agency can pose an additional risk. It's not always clear whether the contractor's security protocols align with yours. If the contractor treats data in your service more carelessly, it can have severe consequences for you.

One solution here could be restricting the outstaffing team's access to user data. For example, you can involve an outstaffing team only for the frontend, and such risks can be significantly reduced.

Situations where outstaffing is optimal

When the project requires specialized skills

Outstaffing provides quick access to a pool of professionals with the necessary skills when a project demands unique competencies not available in-house.

When the project needs to quickly scale development speed

Outstaffing is excellent for bringing in extra hands during peak workloads. This allows flexible resource management without the responsibilities of being an employer.

Testing new ideas and projects without involving the core development team

When a company wants to test a new idea or project, and the core team is busy, outstaffing is a good option. Involving external specialists at the project's initial stage allows evaluating its prospects and quickly building the first version without increasing the permanent staff.

Situations where outstaffing may be unjustified

Oksana Potsulan
Practically any advantage of outstaffing becomes negligible when you have the time and opportunity to hire in-house, and you need an employee in-house for the long term. In such a situation, turning to an outsourcing team is pointless.
Oksana Potsulan
Oksana Potsulan
Project Manager at UTS

Despite the quick access outstaffing offers, in the long run, maintaining an in-house team is usually cheaper and provides greater stability and commitment to the project.

Conclusion

Outstaffing is a powerful tool in the arsenal of startup leaders seeking to accelerate development and implement innovative solutions. It offers flexibility, access to unique skills, and the ability to quickly scale a team. However, like any tool, outstaffing requires careful and thoughtful application.

Founders must weigh the pros and cons, analyze the project's specifics and company needs. In cases where narrow expertise is required or additional specialists are needed for peak workloads, outstaffing can be a real lifesaver. However, for long-term and strategically important initiatives, investing in the development of an internal team and retaining control over key processes may take precedence.

Ultimately, success depends on finding the right balance between internal resources and external assistance, as well as the leader's ability to make informed and strategically sound decisions. Outstaffing is not a cure-all, but with a thoughtful approach, it can be a significant asset for your project.

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