Outsourcing literally stands for "outer source" and represents the transfer of certain functions and tasks of a third-party organization. That is, when a company needs non-major staff or services, they address an intermediary company that satisfies this need. Most often outsourcing works with accounting and legal support of business. Outsource company is paid upon the result of the work it is responsible for.
Outstaffing represents recruitment agencies on the market that offer a kind of rental of workers of a different specialization. Their activity is to select employees for temporary work. The scheme looks like this:
The main difference between these terms is that outsourcing company performs a certain business process without the participation of the customer and receives payment based on the final result. In case with outstaffing, an intermediary employs staff, who works directly with the customer and gets a fixed salary that does not depend on the final product. Other differences include:
It’s totally a myth that only big companies address outsourcing and outstaffing. In real life, small companies, on the contrary, require more specialized services, because they don’t have sufficient human resources.
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