Remote Workers: Outstaffing vs Outsourcing in the Philippines

Whilst the uptake in remote workers continues to increase in the Philippines, the terminology is often confusing. Specifically, many companies tend to confuse the words ‘outsourcing’ and ‘outstaffing’, believing that they refer to the same method of hiring remote staff. 

In fact, this is not the case, because these terms refer to two different models of hiring remote workers. Let’s take a look at both of these models, so you can decide which is best for your company in the Philippines.

What is outsourcing?

Outsourcing is used by companies who want to delegate a project to a third party company. It’s a popular model used by companies when they don’t have the resources to manage the project themselves. This model of hiring remote workers is also prevalent because it saves the company time and money; money otherwise spent on hiring additional staff (often specialist staff are required) and purchasing resources for a project with a defined end point. Wages, overtime, sick pay, and deliverables are all the responsibility of the outsourced company.

The benefits of this hiring model are obvious, allowing the company to continue performing their business as usual, knowing that their project is well in-hand by an experienced team. The main disadvantage of this approach is that the deliverables are out of the company’s control. 

What is outstaffing?

Outstaffing involves hiring remote staff who are employed by an offshore staffing company. This company pays their wages, sick pay, overtime and provides all the resources they need to complete their work for your company. Whilst this sounds very similar to outsourcing, there are distinct differences that make it a very popular model for hiring staff in the Philippines, as follows: 

• Staff are hired by the offshore staffing company who are their employers.
• You can select the staff you need based on your recruitment criteria.
• You can hire workers for a few weeks, months, full-time or part-time.
• Your company oversees, manages, and supervises all their work.
• They become part of your in-house team.

Companies can also hire managers via the outstaffing model who will oversee the work of these remote workers. So the basic difference between these two models is that outsourcing refers more to subcontracting a project to an external company who then has total control over the project. On the other hand, outstaffing refers to hiring remote workers who become part of your team and are managed in-house by your company, whilst their wages, resources and HR needs are provided by the offshore staffing company.

Which model is best for your company?

If you want to hire seasoned professionals for your company without having to pay high salaries and perform an extensive recruitment process, then outstaffing is a model worth exploring for your company. If you want to subcontract one or more projects to a third party company who have complete control over the deliverables (because your company doesn’t have the resources to manage and complete the projects on time), then outsourcing is the best option for your company. 

For more information on outstaffing in the Philippines, contact Outsourced today.