Surely, you’ve heard a lot of good things about outsourcing over the past decade. As it has become one of the most crucial business strategies known today, it’s clearly showing no signs of slowing down.
While most businesses know a thing or two about establishing offshore teams, some may be unaware of the different options that fall under it—including full outsourcing and staff leasing. Understanding the range of methods can greatly help entrepreneurs and business owners make a well-informed decision when considering outsourcing.
This approach to outsourcing empowers businesses to focus on their core functions by contracting out specific jobs, tasks, and processes to an external service partner—either onshore or offshore. This allows for a more streamlined workflow.
Rather than carrying out mundane functions in-house, more and more businesses are turning to full outsourcing to move certain aspects of the business under the service provider’s management. This way, companies can reduce overhead expenses, boost efficiency, and scale operations.
However, while the scope of this strategy is extensive, it can be quite pricey. For that, full outsourcing may not be an ideal option for newly established businesses and start-ups.
As it is often an underrated strategy, many entrepreneurs may not even be aware of what and how staff leasing works. At its core, staff leasing gives you better control of your outsourced team as you’ll be part of the recruitment and hiring process. In hand-picking your staff from candidates shortlisted by your outsourcing partner, you can be sure that your team will function according to your standards.
To further ensure the quality of outputs, the third-party service provider is prepared to equip your virtual team with the needed workspace, office supplies, tools, and hardware to help your leased staff carry out their assigned responsibilities.
Compared to full outsourcing, staff leasing is a great option for both big and small companies as it is proven to be more cost-effective—allowing businesses to save up to 70% on the payroll.
Full Outsourcing vs. Staff Leasing
While these two outsourcing models both function to help companies farm out business activities to virtual teams, there is a range of differences between them.
- Management Style
One of the main distinctions between full outsourcing and staff leasing is the management structure.
For full outsourcing, the third-party service provider’s internal management team is responsible for the entire workflow—ensuring the completion of the delivery of all assigned tasks and fulfillment of the designated functions. This is excellent news for entrepreneurs and business owners who’d like to completely take away the hassle of personally managing a remote team.
Meanwhile, staff leasing allows clients to screen and select the right candidates for their virtual team. Along with having more control over recruitment, this model gives you the liberty to either personally manage your offshore team or identify a team leader to work alongside associates for better alignment. If involvement is vital to your company, then staff leasing may be the ideal option for you.
Full outsourcing may take longer to set up compared to staff leasing. Instantaneous integration is critical to any company as time is one of the most essential resources in business. For this, it is vital to take into consideration the set up time frame when weighing your options.
However, since full outsourcing providers already have their internal management teams, incumbent employees, and specific systems in place, alignment can be a laborious and time-consuming process. Prior to integration, it is necessary to have providers and clients hold several meetings to discuss the requirements, go through existing systems, and tailor-fit and approve the final proposal.
In contrast, because staff leasing allows clients to build their virtual team from the ground up, the process can start soon after the needs and requirements are laid out and thoroughly discussed. If you don’t have the luxury of time, hit the ground running with staff leasing. Ultimately, it’s the ideal model to help you in quickly expanding your business.
- Recruitment Process
Full outsourcing offers comprehensive solutions, so you don’t have to worry about engaging, recruiting, and hiring employees.
Outsourcing providers let their existing employees take care of all your needs—from delivering quality outputs to totally managing business functions as required. In getting non-core activities like recruitment off your plate, you can effectively shift your focus towards the primary aspects of your company.
Conversely, staff leasing enables you to take part in screening, interviewing, and recruiting virtual staff. In hand-picking your employees and directly managing them, implementing remote work won’t have to be an uphill struggle as you’ll be sure about your team’s competence in carrying out both simple and complicated job functions.
If your business is operating in a highly technical industry, this option can serve advantageous in ensuring your remote employees are competent and knowledgeable in the given field.
Business needs vary—while both outsourcing models can be beneficial to businesses, the key to maximizing profit is understanding the available options and knowing the best solution suited to cater to your unique requirements.