Outsourcing vs Outstaffing

What to Choose & What’s the Difference

With the shortages of talent that most companies are experiencing, the need for outsourcing and outstaffing is at its highest. Whether you are just researching these strategies or seriously considering them, let’s explore both options, differences, and see what might work for you best.

Outsourcing & Outstaffing. What Are These?

You may already know what these are, but some people might find these terms rather confusing, so let’s begin with the basics.


The outsourcing model is pretty straightforward. You have a project and don’t have the necessary amount of resources to do it. You go ahead and hire an entire team to do it for you. This team is responsible for the project from A to Z.


  • No management effort. All the management is done by a dedicated Project Manager.
  • No hiring. All HR work is done by the vendor.
  • No quality responsibility. All the responsibility for work outlined in the contract lies on the vendor.
  • No equipment needs. All equipment is provided by the vendor.


  • Higher Rates. There is a lot of additional work like hiring and project management that add up to the final cost of the project.
  • No direct control. With the management being taken care of by the vendor, you lose out on the direct control of the project.


Outstaffing is an older and more classic employment tactic. The talent is still officially employed at the other company, but you hire them to work on your project. They act as an extension of your team.


  • Full control. You will have direct control over the project and the ability to oversee the work done at any point.
  • Flexibility. You can always add or remove resources when you need them.
  • Lower rates. Outstaffing is cheaper than hiring a full team.


  • Responsibility. You have full responsibility for your project as the outstaffing team is just an extension of your team.

Choosing the Right Strategy

If you don’t have the needed resources or competency in design or development, outsourcing is the right way to go. The hired team will take care of everything on their own, all you need to do is write detailed requirements and fund the project.

On the other hand, if you just lack a few developers, outstaffing might be a cheaper and overall better option. Being the extension of your team, you will have direct control over the quality but bear in mind that communication and management also fall on your shoulders.