Building nearshore and offshore teams has become easier, however legal and regulatory issues have not. This is especially relevant when it comes to IP protection, data governance and understanding local employment conditions.
There are many options for how to engage overseas staff from setting up your own office, finding people remotely and using an Employer of Record platform or engaging a more costly outsourcing company.
Each has their pros and cons, but outstaffing is a fourth option that will help you accelerate your growth and fill talent gaps.
WHAT IS OUTSTAFFING?
Outstaffing is a type of employment model where your business engages a third party to hire talent and manage the in-country administration of your team.
The outstaffing partner acts as both the employer of record and your dedicated HR business partner in-country. They are responsible for wages, compliance, taxes and employment law plus end-to-end human resource functions such as performance management, team building, compensation, benefits, learning and professional development.
The outstaffing model fits both short-term projects (>6 months) and long-term teams. An outstaffer is not a freelancer but a specialist who technically works for the outstaffing partner, but is assigned 100% to the client as a dedicated team member.
The client then manages the outstaffers day-to-day tasks as if they were their own employee alongside their onshore staff. Many outstaffers also get access to the clients corporate benefits, bonuses and share options.
SIX BENEFITS OF OUTSTAFFING
1. Better understanding of needs. Good outstaffing partners do more than put bums on seats. Good partners invest in understanding your business so they can build you the right team with the right skills.
2. Find talent anywhere in the world. There are no limitations on location. With the right outstaffing partner you will have direct access to talent wherever you need.
3. Mitigate local compliance risks and protect IP. Employment law, IP protection, data governance, social tax, insurance, holidays and other regulatory issues differ all around the world. Your outstaffing partner is the expert on these issues and works with you to mitigate those risks.
4. Reduce the burden on your existing HR team. Your outstaffing partner assumes the role of local HR function and is the expert in what drives local staff, including local compensation and benefits. Outstaffing partners work within your HR frameworks in order to provide consistency between onshore and dedicated team culture.
5. Faster hiring, more flexible and cost effective staffing. It is less complex to scale up or ramp down the number of software engineers in an outstaffing model as the outstaffing partner has local specialist recruitment teams with in depth market knowledge and understand your business. This support is on-demand, included in the fees making outstaffing the most cost effective model.
6. Access to accelerators, IT support and modern infrastructure. Many outstaffing partners are able to offer more than an engineer. They are often able to offer competitive IT service support, IT procurement, cloud administration and management of IT hardware such as servers and laptops.
By hiring a dedicated team who works remotely or in the partners office, you will get significantly lower costs than outsourcing a project or setting up your own office, reduce the risk of IP theft if using freelancers and get more support than an Employer of Record platform.
At Oktet we advise clients on building and scaling their nearshore or offshore capability. Get in touch to see how we can help.