Outstaffing is renting a specialist who works in a contracting company (outstaffer) to work on a project in the client company. The specialist is part of the client's team along with other members of the team, and his work is regulated by the management team. The client pays the contracting company for outstaffing services under the contract, and the contracting company in turn pays the specialist's salary.
The main difference between outsourcing and outstaffing is the purpose. Outsourcing is the transfer of a particular function to a third-party organisation, while outstaffing is the provision of staff. In both cases, the employees are part of the third party's staff.