The most important factor in the optimization of a business is an agile workforce. Most of the time companies face certain roadblocks while developing projects regardless of the immensely talented team working on them resulting in hindering speed to market. This problem can be strategically tackled by injecting personnel from outside having key skills.
Staff augmentation, a relatively new outsourcing strategy helps businesses meet the technical and industry-specific needs by outsourcing employees from outside. It is a powerful model that augments the agility of a company catering to the changing enterprise needs.
If you are a business looking for cost-cutting while maintaining the quality of technical skillset then here is all you need to know:
- IT Staff Augmentation: The Concept
- Market Value
- How does the Staff Augmentation Model Work?
- Types of Staff Augmentation
- Pros and Cons
- Staff Augmentation Vs Managed Services
- Is Staff Augmentation right for you?
IT Staff Augmentation: The Concept
Hiring and Firing employees is the worst of a nightmare for any employer as it consumes considerable work hours as well as exhausts resources. Also, in-house recruitment doesn’t always work in cases where persons with rare or specialized skill sets are required for time-bound projects.
Staff augmentation proves to be a flexible, cost-effective component and strategy, specifically for start-ups in such scenarios.
“Staff augmentation is an outsourcing strategy that helps businesses expand and augment their in-house team by hiring temporary employees from the outside”
This model is also known as the resource augmentation model. Business leaders who are not much tech-savvy and wish to concentrate on the core business processes rather than hiring and retaining skilled talent, then staff augmentation is their savior. It provides the flexibility of finding the right fit for your hard-to-fill positions immediately saving you from the hassle.
Worldwide software marketing is booming. According to Business Wire, the global software products market grew from $930.93 billion in 2020 to $968.25 billion in 2021 at a compound annual growth rate (CAGR) of 4%. The market is expected to reach $1493.07 billion in 2025 at a CAGR of 11%.
As per Statista’s, the industry resumed strong growth in 2021, with application development and enterprise software projected to mark the strongest revenue increase.
The global staffing industry, one of the primary suppliers of staff augmentation talent, is estimated to support $490 billion in annual spend. Staff augmentation is one of the approaches that prove to be effective in distributing IT workforces among businesses.
How does the IT staff augmentation model work?
The staff augmentation helps companies to fill the gaps in their teams by connecting with world-class talent. The problem of scaling is always there while developing a project. Hiring permanent IT staff might not be a feasible choice for short term projects. This is where IT staff augmentation comes in which is an effective way to expand the existing team and distribute the workload.
The staff augmentation strategy works as follow:
- The existing skillset is evaluated and the skills that are lacking are defined.
- After this, an outsourcing partner is chosen through thorough research, reviews and interviews.
- The resources are then hired by the vendor as per your requirements to complement the in-house talent.
- Proper onboarding of the resources happens to familiarize them with the in-house team and with the company culture.
- The cost and liability of these resources either lie with the client or with the vendor, it depends on the contract.
- The resources are dedicated to one project at a time.
Types Of Staff Augmentation:
The staff augmentation can majorly be split into two types:
• Short-Term Type:
It is suitable for small projects when the in-house team are not available or requires specialized dev support.
• Long-term Type:
It is suitable for relatively big projects and caters to the following problems:
i. Skill gap
ii. Time is taken to recruit in-house talent
iii. Cost issues
It can further be divided into the following types:
This type of staff augmentation is suitable for non-critical and non-technical cases where there is no need for highly skilled resources i.e warehouses.
- Skilled Based:
In this type of staff augmentation, the resources required need to possess a certain set of skills that are relatively not critical and basic e-g clerical work or basic copywriting.
- Highly skilled:
As per this type, a high level of skillset is required that can only be achieved through experience and extensive training in e-g software engineering. The IT staff augmentation mostly works on this type of model.
Types of Staff Augmentation Services:
Now that you know the types of staff augmentation model and which model IT staff augmentation is based on, it’s time to further dig deep into the concept and provide a better understanding of the types of services.
Here you go:
- Traditional Staffing
- Master Vendor
- Specialized Staffing and Consulting
- Gig platforms
- On-demand talent platforms
- Independent Contracting
The staff augmentation model of outsourcing is very broad and context-dependent. The only type that suits the IT niche is the highly skilled type. The above-mentioned services are segregated based on projects they fit in.
Pros of Staff Augmentation:
If you have never used staff augmentation, we have compiled a list of benefits and reasons as to why opt for this model. Gone are the days when business leaders had to worry about the completion of the development process and bringing the product faster to the market. Enhance your in-house talent with outsourced professionals and accelerate your software development process:
- Effectively Handle Workload:
It is not always feasible to recruit and retain permanent employees for short-term projects. But you can not work with either with professionals missing some key skills. The best solution is software staff augmentation that helps you connect with IT experts externally and distribute the workload.
- Cost-Effective Solution:
Hiring local talent is always an expensive solution as compared to outsourcing talent as the company is liable to pay all the benefits along with the salaries. In the staff augmentation model, businesses only utilize the skills of the resources for a set period of time while the vendors take care of the rest.
- Find specific skill sets:
Staff augmentation helps businesses connects with the resources that are a perfect match for their project.
- Boost Productivity:
This model is perfect for improving the software development life cycle(SDLC) as you have got the right team working on it. They can optimize the workflow by providing solutions that you couldn’t think of while working with your in-house team. Also, you have control over the entire project so you can manage the performance of the external team.
- Build an exceptional team and save time:
By adding outsourced professionals with a specific skill set, you save your existing team from acquiring those skills. Although some time is spent on onboarding these resources it ultimately saves save a lot of time during the actual development process.
Cons Of Staff Augmentation:
- Management Cost:
It is a misconception that staff augmentation is an ultimate cost-saving option. Businesses still have to bear the management cost as they are still responsible for managing the project.
- Time-Consuming Training Sessions:
As the outsourced employees have no internal knowledge of the company, therefore to fill the gap between the teams, companies have to arrange training sessions and workshops.
- Privacy Risks:
Staff augmentation requires trust between the client and vendor. Businesses have to handover the corporate data protected by NDA and privacy rules of the office to ensure the efficiency of the development staff.
Staff Augmentation Vs Managed Services:
What distinguishes staff augmentation from managed services is the degree of control over the project. The staff augmentation model works on providing the staff which is managed by the client. On the other hand, managed services is a holistic approach which means the vendor assumes all the control of the external non-core business processes of the client and manages all the functioning.
Managed services better fit the scenarios where businesses seek to focus on core business and strategic priorities while handing over the resource allocation to the vendor. Moreover, the vendor already has their benches or teams so the project can start immediately after signing the contract saving them from the hassle of onboarding new employees.
Is Staff Augmentation Right For You?
There are no absolute criteria for determining if staff augmentation is for you or not. Implement this model or not, it’s totally up to you. Given the benefits like expertise, quick team scaling, flexibility, and cost savings, it can bring value to your business but the downsides of this business practice can not be ignored either.
There are a number of other outsourcing options if you feel staff augmentation is not for you such as:
- Managed Services
- Dedicated teams
- RnD Centre establishment
- Independent Contractor
- Offshore Development Centre (ODC)
- T&M basis of contractual work
Looking for a reliable partner that offers staff augmentation services? Contact us. We will be more than happy to talk about your needs and choose the best solution for your organization.