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June 12, 2024 - by Devico Team

How to get started with implementing outstaffing model

If you have ever built a house or fixed anything within it, you’ll understand — it’s pretty difficult to get things done on the first attempt. It’s better to hire a specialized crew for that job. If you are living in a region with a lot of buildings, all is okay, but if not, your local options are limited. That's where contractors with access to a wider network of skilled workers come in.

Outstaffing your business functions works similarly. Outstaffing is a strategic model where businesses hire external staff to work on specific projects or tasks, effectively extending their team without the overhead of traditional employment.

What are the benefits? The most obvious are cost reduction (especially when it comes to short-term projects), access to a global talent pool, and enhanced flexibility in scaling teams up or down. So, not surprising that the outsourcing companies' revenue is projected to reach USD 0.39 trillion in 2025.

Revenue in trillion USD (US $)

Here's another piece of the exciting reality: TestGorilla reports that 70% of companies are already hiring talent beyond their traditional locations based on skills needed.

This guide will equip every CEO or C-suite leader with the managed services KPIs, knowledge, and steps to get started with a successful outstaffing strategy. Let's dive into the key steps to get you started with outstaffing effectively.

Take stock of your requirements

Before diving into the outstaffing and staffing KPIs, it’s crucial to take a good look at what you need. Thinking back to our building metaphor, it’s like a blueprint for you — without it is like without hands. This will save you time and ensure you get the right fit for your projects.

What does your project require?

Aristotle once said, “Asking the right question is half the answer”. Well, here are a couple:

  • What skills are missing in your current team?

  • How long do you need the outstaffed team for?

  • What’s your budget?

  • Which staffing KPI will show me the job has been done at a prime level?

Being precise here helps a lot. For instance, if you’re developing a mobile app, specify whether you need Android, iOS, or cross-platform expertise.

Tools for clarity

Tools like Microsoft Excel or Google Sheets are helpful, but there are far better alternatives in our modern digitalized world. They’re straightforward and allow you to map out costs clearly. For more detailed financial planning, QuickBooks offers insights into managing project budgets effectively.

The main advice — be realistic. Quite logical that rates can vary depending on location, experience level, and the specific skill set required. Research average rates for the talent you need and factor in additional costs like software licenses or project management tools. Many online resources and outstaffing providers offer cost calculators to help you estimate project costs.

Define a realistic timeframe for your project. Is it a short-term website development project or a long-term software development endeavor? Knowing the project duration helps you determine the type of outstaffing engagement model that best suits your needs (fixed-term contract vs. ongoing partnership).

Defining project scope and deliverables

Defining project scope and deliverables

Now, zero in on what you want to achieve. Outline the project scope and what the ideal deliverables look like for you. Take a pen, a piece of paper and just write a recipe for your team to follow. Keep it simple: what needs to be done, by when, and to what standard. Clear project scopes prevent misunderstandings and keep everyone aligned toward the same goal.

In short, knowing what you need, having a clear budget, and defining your project scope are key steps before reaching out to an outstaffing partner.

Finding your perfect outstaffing match

Recall your sports classes during school, especially the relay races. Finding the right outstaffing partner is a bit like choosing a teammate for such an activity. You need someone who can keep pace, share the baton smoothly, and understand where you should run. Let's break down the flavors of outstaffing companies and their strengths.

Generalist providers: Tech people often call such companies the jack-of-all-trades in the outstaffing world. Because of a wide range of talents across various industries, they offer. Ideal for businesses needing diverse skills without highly specialized requirements.

Specialized firms: Unlike generalists, these firms focus on specific sectors or technologies. If your project needs niche expertise, like blockchain or AI, these are your go-to firms.

Project-based partners: These are focused on delivering turnkey projects. They're great if you have a clear end goal but lack the in-house resources to achieve it.

Long-term development teams: If you're looking at an ongoing need for outstaffed personnel, we provide teams that work with you over longer periods, essentially becoming an extension of your in-house team.

Evaluating potential partners

When you start scouting for the right partner, consider these factors:

  • Experience and expertise: Ensure they know your field inside out. If you're in e-commerce, a partner with relevant projects under their belt will navigate the common pitfalls and bring valuable insights.

  • Track record and client testimonials: Run through websites like Clutch, Glassdoor, and LinkedIn for insights into companies' reputations. Look for feedback that highlights their strengths and weaknesses.

  • Communication style: You can rely on them without too many back-and-forths as they should be people of their words. During initial talks, notice if they ask insightful questions and understand your project's nuances.

  • Legal compliance and ethical practices: Make sure they adhere to international legal standards and respect intellectual property rights. This ensures a smooth and secure collaboration.

Now, you have a rough map for your journey, so it’s time to head off (to do research). Scour the web, tap into your network for referrals, and keep up with industry events.

Building a collaborative outstaffing relationship

The next step is to move from building to bridging — to build the bridge between your in-house team and augmented staff. Clear communication, defined expectations, and open dialogue are your bricks for such a bridge.

Keep everyone in the loop

We should not break down communication into groups, like: interaction with colleagues, interactions with family, and so on. Whoever you’re talking to, you must be clear and consistent. This way, you gain trust and ensure everyone is on the same page.

This is where comms tools come into play. Yet, beyond the usual suspects like Slack and Microsoft Teams, there are other tools that can help you keep everyone in the loop.

  • Project management platforms: That’s simple. Although the built-in messaging feature may seem inconvenient, it is secure and handy. Asana, Jira, or Trello offer real-time communication features, task management capabilities, and file-sharing functionalities.

  • Video meeting platforms: It’s always better to have an in-person meeting. But we are all living in the time shortage age. So, regular video calls aren’t a bad option. It’s better to have meetings at the same time every period that suits you and your extended team. Face-to-face interaction can significantly enhance communication and build stronger relationships.

  • Instant messaging: Companies often choose Slack or Microsoft Teams for quick questions, updates, and informal communication. But with the same success, you can even use Discord. Initially a favorite among gamers, it has evolved into a versatile platform for real-time chat, voice calls, and even video meetings.

The alternative is to develop your own private messenger. We can’t help but admit that it’s tempting for exclusive customization and control. However, choosing between the investment and the benefits could be challenging. Off-the-shelf tools often meet most needs along with security requirements.

Collaborative partnership: 3 steps to follow

Communication is important — all is clear now. Below are three key aspects of building a strong partnership with your outstaffing team.

  • Define roles and responsibilities: Clearly outline roles and responsibilities for both your internal team and the outsourced team.

  • Follow strict protocols: Define clear communication channels and protocols. Usually, teams pencil in points of contact for each team, matching communication methods with different situations (urgent issues vs. daily updates), and just schedules.

  • Get ongoing reports: Schedule regular progress reports to track project advancement and identify any potential roadblocks early on. You may also benefit from performance reviews. Assessing the outstaffing team's effectiveness, according to staffing KPIs, and providing constructive feedback are essential for improvement.

Integrating and steering your outstaffed team

Onboarding can mean even more than initial agreements. Just because a ship will sail the way you name it — the first period makes the difference and affects further processes. This initial phase lays the foundation for a productive and collaborative working relationship. Metaphorically speaking, set the stage before the main act and ensure every player knows their cues and lines.

Key onboarding steps

  1. Set clear expectations: Kick off with comprehensive briefs detailing what needs to be done and the quality benchmarks. You can use Kanban or outline your project in Miro (or any other mind-mapping tool). This roadmap is indispensable for guiding the team toward the desired outcome without detours.

  2. Present company procedures: Get the team to understand your company's working style and ethics. No one wants to lose the trust of their clients due to security issues. Yet, there are a lot of such examples. One of the freshest is the famous platform Booking. Three years ago the platform was fined by ​​the Dutch Data Protection Authority and paid over EUR 470,000. But now it faces new problems due to security vulnerabilities.

  3. Unify communication channels and collaboration tools: Pin down primary communication tools and platforms for project collaboration. Whether it's Discord for real-time communication or Jira for task management, choosing the right tools is pivotal for keeping everyone on the same page.

Strategies for effective management and monitoring

  1. Leverage project management tools and regular communication: If you don’t know what to choose — stop by Jira. As of 2020, this tool was already used by over 65,000 companies globally. Whatever you choose, these tools provide a transparent view of the project's progress, helping identify bottlenecks early.

  2. Constructive feedback and ongoing support: Nurture a culture of open feedback where team members can learn and grow. Regular check-ins help address concerns and acknowledge achievements. A positive work environment means a lot to newcomers all over the world.

Set clear expectations, integrate them into your company culture, and maintain open lines of communication — the only way for a collaborative and productive project lifecycle.

Navigating legal waters in outstaffing

One of the most important things in augmenting staff isn’t even staffing KPI examples, but keeping legal and compliance matters at the forefront. You wouldn’t play a game without acknowledging the rules, right? Both your location and your outstaffing partner’s come with their own legal landscapes. Ignoring these can lead to serious trouble.

In 2017, Equifax faced a data breach that compromised the sensitive information of 147M of Americans. Investigations revealed that a major credit reporting agency failed to properly secure its data systems, violating data security regulations. This resulted in a USD 425M fine, reputational damage, and a loss of consumer trust.

Consulting with legal counsel isn't just advisable; it's a must-do. Lawyers can help you craft contracts that cover all bases:

  • Intellectual property rights: Make sure your innovations stay yours. Clearly define who owns what, especially when outstaffing involves creating new tech or content.

  • Data security: With cyber threats lurking around, ensuring your data (and your customers' data) is secure is non-negotiable. Your agreements should specify compliance with data protection laws like GDPR in Europe or CCPA in California.

  • Employment regulations: Different places have different rules about work. From working hours to benefits, make sure your contracts reflect the legal standards of both your company’s and your partner's locations.

Defining project scope and deliverables

Crossing your T’s and dotting your I’s legally might seem daunting. However, it’s the backbone of a worry-free outstaffing partnership. Pay attention to these legal aspects, and you’ll safeguard your business against potential risks.

To sum it up

High-performing teams ain’t a fairytale. They really exist, but we admit that building such a team is no easy feat — there are many aspects to consider: pinpointing your precise requirements, selecting the right partner, integrating and managing your outstaffed team effectively, and navigating the legal and compliance landscape diligently.

Remember, a stitch in time saves nine — plan carefully and act consciously. Scrutinize modern job market trends like The Great Resignation and Quiet Quitting. Size up all options, and consider team augmentation since it offers many benefits like cost savings and effortless scaling.

But note that outstaffing isn't just about cost savings, it's about accessing a global pool of talent, solving skill gaps, and achieving strategic goals.

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