Outstaffing to Poland: the Benefits for Businesses
Remote cooperation has become a new normal for companies in a broad range of fields. After the COVID-19 pandemic, businesses realized that such collaboration is more flexible than traditional on-site work. Even skeptical organizations changed their minds and began hiring remote staff more often.
The employees, in turn, also appreciated the remote job opportunities allowing them to allocate time and resources and find a work-life balance suitable for their needs.
However, the challenge of remote collaboration is that remote employees are often short-term contractors or freelancers. In this case, both the business and the employee lack confidence in long-term relationships and may look for business opportunities elsewhere.
Outstaffing is changing the philosophy of remote collaboration, proving that distance is not a concern for long-term projects and dedicated teams. Outstaffing development services are growing in demand because they make it possible for tech businesses to recruit IT professionals worldwide with the guarantee that those staff members will be devoted to only their projects.
Currently, Poland is one of the most promising outstaffing destinations for software development. With a highly skilled workforce and a business culture similar to that of Western Europe, it has become an attractive option for companies looking to save on costs without compromising on quality.
So, if you are a tech entrepreneur looking to expand your business in a stable and well-developed region, continue reading this post to learn how to hire a development team in Poland.
Understanding the outstaffing model
Outstaffing is becoming increasingly popular as it enables companies to scale their business quickly and manage costs easily. But what exactly is outstaffing?
Simply put, outstaffing is the practice of outsourcing part or all of a company’s development processes to a specialist third-party provider in another country. Typically, the provider operates in its own office and has all the necessary facilities to organize an uninterrupted development process.
Employees working by the outstaffing model are, de jure, employed by a third-party software service organization. However, de facto, they work for the client company and are part of its staff.
A distinctive feature of outstaffing is that remote employees work exclusively on the client's project. The client, in turn, has full control over the development progress and is aware of who's responsible for specific areas of work.
Outstaffing is beneficial for companies that need to expand their workforce quickly but do not want to take on the administrative burden of hiring new employees. The third-party service provider undertakes all the administrative and HR-related tasks on behalf of the client. Thus, the client company is relieved of the responsibility for payroll and tax calculations, as well as the provision of social benefits to employees.
Outstaffing vs. outsourcing
Outstaffing and outsourcing are both business strategies that involve delegating tasks or functions to third-party providers. However, there are some key differences between these two approaches:
Nature of the relationship
Outstaffing. A company hires remote employees who become an extension of the in-house team. These employees are typically managed by the company's existing management structure, and they work closely with the internal team members.
Outsourcing. The company contracts a third-party software development provider to handle specific projects or tasks. The provider is responsible for managing the resources, meeting deadlines, and delivering the desired outcomes.
Control and management
Outstaffing. The client company controls the project flow and manages the development team. Remote employees are integrated into the existing workflow and operate according to established processes.
Outsourcing. The company delegates control and management to the software development provider. The client may participate in the development process, however, the flow is usually organized by the managers from the provider's side.
Scope and flexibility
Outstaffing. The client has the flexibility to change the course of development and scaling of an outstaffing team. If the client needs to reduce the team, they notify an employee at least a month in advance, according to the contract. If they need to expand the team, they submit a request to the HR department of the outstaffing service provider.
Outsourcing. Outsourcing typically involves a fixed scope and timeline for the contracted work. Any changes to the project's scope or requirements may necessitate renegotiating the contract, which can be less flexible compared to outstaffing.
Knowledge retention
Outstaffing. In-house employees work closely with an outstaffing team to share project knowledge. Before development begins, a series of meetings may be organized to communicate the main challenges of the project and to provide an update about the current state of affairs.
Outsourcing. Knowledge retention can be more challenging because the outsourcing team works with a greater degree of autonomy compared to the outstaffing team. However, with a proper knowledge transfer plan in place, knowledge transfer should proceed smoothly regardless of the cooperation model.
Cost structure
Outstaffing. The client pays the salary of remote employees + service fee of the software development provider. The client company transfers money to the account of the service company, and the service company then credits the salary to the employees' accounts.
Outsourcing. For medium and short-term projects, clients can opt for either a fixed price or a time and material model. With a fixed price, the client pays a predetermined sum for the project within an established timeline. Alternatively, the time and material model requires them to pay based on the amount of time spent on it.
Advantages of outstaffing to Poland
Eastern Europe is one of the most promising software development outsourcing and outstaffing destinations. A recent report, the Future of IT, has estimated that there are 1.6 million IT specialists in this region. Eastern Europe is considered one of the biggest suppliers of IT workforce specialists in the world. The regions which supply the largest numbers of specialists to the IT workforce are:
Poland - 250,000 IT specialists
Ukraine - 200,000 IT specialists
Romania - 118,000 IT specialists
Czech Republic - 100,000 IT specialists
Given Poland's significant IT talent pool, it's no wonder that many companies choose to outsource software development to the country. There are also many other benefits that come with outstaffing to Poland.
Talented and skilled developers
In the 2022 global ranking of top developers by Pentalog, Poland was ranked seventh.
Also, in past years, Polish programmers occupied top places in various ratings according to diverse reputable resources.
For example, HackerRank recognized Polish programmers as the top Java developers and 3rd best algorithm developers in 2016.
According to the SkillValue report 2019 by Pentalog, Poland occupied second place in the Best European Developers ranking. The same report recognised Polish developers as the best mobile developers in 2019.
Additionally, Harvard Business Review placed Poland fifth when ranking countries with the best technical skills in 2019.
Diverse expertise
Polish software engineers have strong expertise in diverse industries, from finance and manufacturing to education and entertainment. The latest report by Sourceseek.com lists the top five software development fields where Polish programmers stand out.
According to the N-iX study, the majority of tech experts in Poland are well-versed in JavaScript, Java, Python, .NET, PHP, DevOps, and QA.
Additionally, the Software development in Ukraine, Poland, Belarus, and Romania report shows that Polish IT companies receive the majority of their revenue from the financial industry, retail, and healthcare.
Quality tech education
Poland boasts world-class universities that offer top-tier tech programs, such as computer science, AI, and cybersecurity. These universities often collaborate with leading tech companies to give students a chance to gain real-world experience. Moreover, the country has a thriving startup atmosphere, offering plenty of chances for recent graduates to apply their learned skills.
Welcoming business environment
Poland ranks 40th out of 190 in the global ease of doing business ranking, and occupies the 4th position in the global most attractive emerging market list published by Bloomberg.
Such high ratings are explained by the fact that the Polish government has created favorable conditions for attracting foreign investment. For example, companies that receive income from their intellectual property rights can pay a tax of only 5%.
This makes Poland an attractive destination for IT giants like Google, Amazon, Samsung, Intel, and Microsoft, as well as creating a favorable climate for emerging outstaffing companies and mid-sized app development providers.
Good prices
Polish developers are rated more highly than their counterparts in India or the Philippines, but about 2-3 times lower than those in the USA or Western Europe. Despite this, the quality of software development services provided by Polish developers is as high as those provided by their Western counterparts, which is why foreign businesses willingly choose Poland for staff augmentation, software development outsourcing, and IT consulting services.
Formalizing relations with a remote team in Poland
There are two ways to hire remote developers in Poland:
1. Establish a direct contract with an employee. The most common type of contract in the IT industry is a B2B contract with a self-employed specialist. In this case, the IT specialist is registered as a private entrepreneur (PE), and you transfer money for the work done to their company's account in an agreed term. The specialist independently conducts tax calculations and submits financial statements.
Pros: You don't pay a service fee to an outstaffing agency.
Cons: You have the responsibility for recruiting and providing working equipment to the employee.
2. Sign a service agreement with a software development provider. In this case, you formalize working relations with a third-party company rather than an individual employee. The service company undertakes all obligations for personnel recruiting, hiring, and retention, provides a workplace, conducts tax payments, and organizes corporate events. This model is especially convenient for clients looking to hire a development team in Poland rather than an individual employee.
Pros: You quickly get a development team suitable for your needs and a full range of HR and administrative services
Cons: You pay a monthly fee for each employee to the service provider
A service agreement with an outstaffing company in Poland: what you should know
A service agreement with an outstaffing company is a contract between a client company and an outstaffing provider, whereby the provider agrees to provide staff to work on the client's projects, while the client remains responsible for managing and directing the work of those staff members.
Here are some of the key elements the service agreement typically contains:
Scope of services. This section outlines the specific services that the provider will deliver as part of the project, including the development, design, testing, and deployment of the software.
Payment terms. This part details the pricing and payment schedule for the project, including any fees, costs, and expenses that may be incurred.
Intellectual property rights. This addresses ownership of the software and any related intellectual property rights, including copyright, patents, and trademarks.
Confidentiality. This section outlines the obligations of both parties to maintain confidentiality and protect any confidential information that is shared during the project.
Warranties and representations. This section may include the provider's obligations regarding the quality of the software, its fitness for purpose, and compliance with relevant laws and regulations.
Limitations of liability. This outlines the extent of liability that each party assumes in the event of losses or damages that may arise from the project.
Termination. This section outlines the circumstances under which either party may terminate the agreement and the process for doing so.
When entering into a partnership with an outstaffing company in Poland make sure to carefully read the service agreement before signing it. You may also contact a lawyer to ensure your rights are not compromised and your obligations are fair.
Outstaffing and outsourcing services with Erbis
At Erbis, we have been providing software development services for 11 years. We specialize in healthcare development, supply chain solutions, finance apps, real estate systems, automotive software, and e-commerce platforms. Our clients come from Western Europe and the USA, and we have long-term and short-term projects implemented based on outsourcing and outstaffing models respectively.
Initially starting as a Ukraine-based company with up to 10 employees, we have grown to an international organization with 100+ people on staff. Currently, our headquarters are in San Francisco, USA. We also have offices in Bristol, UK, Dnipro, Ukraine, and are happy to have a new office opened in Krakow, Poland.
Our Polish branch already has a strong team of qualified IT professionals dedicated to their work and focused on top results. If you are looking for a reliable technology partner in Poland who can turn your business idea into reality, do not hesitate to contact us. After discussing your project, we will provide you with a detailed estimate and communicate the software development plan tied to your business needs.
