Outsourcing vs Outstaffing vs Staff Augmentation: Understanding the Differences and Choosing the Right Model for Your Development Company

In today’s fast-paced business environment, companies often find themselves faced with the challenge of meeting their expanding workload and growing demands for specialized skills. In such scenarios, businesses have several options to consider, including outsourcing, outstaffing, and staff augmentation. Although these terms are frequently used interchangeably, they actually describe separate methods for obtaining external talent. When it comes to specialized skills, software development is a prime example of an area where companies often require external expertise. A software development company can be instrumental in providing staff augmentation services assisting businesses in acquiring the necessary talent to meet their project requirements. In this blog post, we will delve into the differences between outsourcing, outstaffing, and staff augmentation and provide insights to help you choose the right model for your company.

Outsourcing: Leveraging External Expertise

Outsourcing involves contracting with a third-party company to handle specific tasks, functions, or projects on behalf of your organization. Typically, these tasks are non-core or non-strategic activities that can be delegated to an external service provider. When you outsource, you essentially transfer the responsibility for a particular process or department to an external entity.

One of the essential benefits of outsourcing is the access to specialized expertise. By outsourcing tasks to a specialized service provider, you can tap into their knowledge and experience in a particular area, whether it’s software development, customer support, or accounting. Outsourcing also offers scalability, allowing you to quickly scale up or down based on your business needs. Moreover, outsourcing frequently offers cost advantages since it allows you to bypass the expenses related to recruiting and educating on-site personnel.

Outstaffing: Extended Remote Team

Outstaffing, also known as dedicated team or extended team, involves hiring remote professionals employed by a third-party service provider for your organization. With outstaffing, you have greater control over the dedicated team members, their work, and the project management process. You can select and manage the professionals as if they were your own employees, while the outstaffing company takes care of administrative tasks, payroll, and legal compliance.

Outstaffing is an ideal model when you need a team of professionals with specific skills to work on a long-term project. It provides flexibility, as you can easily adjust the team size and composition as the project progresses. Leveraging outstaffing provides access to a dedicated team focused solely on your project’s requirements, ensuring expertise and commitment.

Staff Augmentation: On-Demand Talent

Staff augmentation involves temporarily extending your internal team by hiring external professionals on a short-term basis. It is typically used to augment existing workforce during peak periods or fill skill gaps for specific projects. Staff augmentation allows you to maintain complete control and oversight of the project while integrating the external talent seamlessly into your team.

The key advantage of staff augmentation is the flexibility it provides. You can quickly scale your team up or down as needed, without the long-term commitments associated with hiring permanent employees. Staff augmentation enables you to access specialized skills on-demand, thereby enhancing your capacity to handle complex projects or emerging technologies.

Choosing the Right Model for Your Company

Selecting the appropriate model depends on various factors such as project requirements, budget, timeline, and long-term goals. Outsourcing is suitable for non-core functions that can be handled by external experts. Outstaffing proves to be the ideal choice for long-term projects that require dedicated resources, while staff augmentation offers flexibility for short-term needs and skill supplementation.

Consider the nature of your project, the level of control you desire, and the budgetary constraints when making a decision. Assess the core competencies required, evaluate the costs and benefits, and consider the level of expertise and commitment necessary for success.


In conclusion, when it comes to choosing the right model for your development company, it’s essential to understand the differences between outsourcing, outstaffing, and staff augmentation. Each model offers its own set of advantages and considerations.

Outsourcing allows you to delegate entire projects or specific tasks to external vendors, offering flexibility and cost-efficiency. However, it may result in less control and potential communication challenges.

Outstaffing provides access to skilled professionals who work exclusively for your company but are legally employed by a third-party vendor. This model offers greater control and flexibility, with the added benefit of reducing administrative burdens.

Staff augmentation allows you to supplement your existing team with external talent. It provide the necessary skills and expertise for specific projects or periods of high demand. It offers a balanced approach, allowing you to maintain control over the project while benefiting from additional resources.

Ultimately, the choice between outsourcing, outstaffing, and staff augmentation depends on your specific requirements, project complexity, budget, and long-term goals. By analyzing these factors and understanding each model’s attributes, you can make an informed choice for your company. It will position you for success in the constantly changing realm of software development.


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