Business IT electronics

Outsourcing vs. Outstaffing: 5 Major Differences

Whenever it comes to software development, the most common question that crops up inside the mind of an IT manager is which one to opt for- outsourcing or outstaffing.

Well, to be honest, both of them are cost-efficient and time-saving.

But, to determine, which one will be better for your establishment, you need to make a thorough comparison between both the systems. If you are in the same dilemma, you are reading the right article! This post will help you to have a clear insight into the 5 key differences between IT outsourcing and IT outstaffing company, which will further help you to come to a conclusion.


The first and foremost difference that lies between the two software management is their way of working. In the case of the contract of IT outsourcing, the professionals possess a flexible working schedule.

In fact, they need to work within their own territory. On the other hand, the work of the organization principally relies on its prospects of a particular company that employs the outstaffing.

The working hours of the employees are fixed as per the prospect’s employment schedule. In simple words, outsourcing is referred to as a whole project whereas outstaffing offers maintenance and hiring of individuals.

Contract agreement

The next prime difference that lies between those two systems is in the agreement of the contract. As you have already read in the above-mentioned section that IT outsourcing is more like entire project-based support. Hence, it is obvious that it will hold a long-term contract with different companies. Most often, the bond comes for a time span of 1 year and sometimes more.

While, in the matter of IT outstaffing, the contract dealing solely depends on the rendition of any certain works. The convention can be exceeded by the IT outstaffing company if it is necessary.

Payment Procedure

Most of the time, people leave this segment during the discussion of the differences.

But, it is undoubtedly an important aspect to mention. If you deploy outsourcing for your establishment, you do not need to pay your employees on a monthly basis.

This software management permits you to clear your payment once the whole project is accomplished. On the other side, in terms of IT outstaffing software management, you have to pay the staff members every month.

Dealing with the clients

One of the highly notable dissimilarities reclines on the way in which both of the software management interacts with their clients. The IT outsourcing typically maintains a similar principle when it comes to interacting with the clients: they handover a certain trade procedure to the outsourcers of the company or organization.

In the model of outstaffing, there are generally two ways of interaction:

  • Firstly, the outstaffer company offers its skilled workforce for momentary usage to the customer company.
  • Secondly, the customer company provides its staff members to the outstaffer company for a certain period. After that, those employees will keep serving the customer company back as usual.


Lastly yet most importantly, there comes the variation in the communication procedure.

With regard to IT outsourcing, the work pressure is so immense, that you hardly get any free time or resource to communicate with your hired developers. It, in turn, creates a communication gap, whereas, in outstaffing, this issue is eradicated.

Here, you can engage yourself in the process precisely.

As a result, a long-term smooth relationship can form between you and your employees. It will further encourage them to work more proficiently and be loyal to you.

Now, that you are aware of the major differences between these two software management systems, hopefully, you will be able to choose the right one for your organization.

About the author

Pushkar Kathayat

Pushkar Kathayat is the Chief Editor of TechGeekers. His passion is towards SEO, Online Marketing and blogging.