Staff augmentation may be a good option if you are looking to expand your company. This business practice can not only bridge different skill gaps, but it also saves money and energy.
Since 1995, I have been responsible for the operational aspects of IT companies. This has allowed me to see the many difficulties that companies face as they develop. The most difficult task is team expansion. This is why I decided to write this article on hacking staff augmentation to help others who are interested in adopting it.
What is Staff Augmentation?
Staff augmentation can be described as a business strategy that augments the team with qualified professionals in the fastest and most efficient way. It is also known as “resource enhancement” or “business augment”. This is simply when you need more people to help with your project. It also saves time and money on employee onboarding, hiring, and maintenance.
While some people view staff augmentation as a broad term that covers outsourcing and R&D office setup, others see it as another name for outstaffing. As long as people disagree about what staff augmentation is, I believe it to be a similar term to outstaffing when IT comes. You can read the guide on how software projects fail.
The University of Pittsburgh Medical Center’s telemedicine project is an example of staff augmentation. The university was able to increase its staff and grow from zero to 100 in telemedicine within a matter of hours thanks to staffing services.
IT Staff Enhancement and Why It’s So In Demand
IT managers resort to staff augmentation when their IT team is not able to meet all their needs. This happens when a company expands, launches larger projects, or has to handle multiple important tasks simultaneously.
Sometimes, in-house developers may not be able to meet deadlines and require external assistance in the shortest possible time. Outsourcers are often a good option. Staff augmentation companies can be more useful if you want to have complete control of the task being completed.
According to an American Staffing Association study, 8/10 job applicants expect to move their workplace within a year due to the insecure market. This could negatively impact employee turnover rates in all companies and increase the risk of losing employees.
IT leaders no longer fear employee turnover. The global Covid-19 crisis was not a major problem for the tech sector. However, it helped the sector to survive and thrive. Remote work, videoconferencing and vibrant online communication have allowed IT companies to fill any skills gaps quickly.
It is no surprise that IT staff augmentation is a key stage in the expansion of tech companies. They can find the most highly-sought-after skills in engineering such as cloud computing, scientific computing, and blockchain.
Staff Augmentation Providers
Staff augmentation has evolved into a large industry that offers many providers to meet the diverse needs of clients. These are the most popular:
Traditional staffing agencies
This is an agency that is also called a “commercial/generalist staffing provider”. This agency is primarily designed to provide non-critical expertise for your team, but not specific skills. You might use such staffing vendors if you are a CEO for an IT product company to find a skilled data entry specialist.
Boutique staffing firms
Boutique staffing is a small agency that can fill the most difficult roles within your company, such as senior architects. This vendor offers highly personalized services and places more emphasis on quality than quantity. This is why they can charge a lot of money.
These platforms, also known as “human clouds”, provide staff augmentation services. They connect potential employees with employers. There are two types of these platforms: gig and on-demand. There is one difference: gig platforms don’t guarantee you will get professional employees. On-demand platforms aim to only provide curated, interviewed and vetted talent.
Staffing agencies provide staffing services that help clients hire people for critical and non-critical projects. If they are able to find the right candidate, they receive a fee. Recruitment firms might not find the perfect candidate. This is because most recruitment firms don’t have the expertise necessary to find the right candidate.
You can also set up your own R&D offices in foreign countries such as Ukraine to attract the best talent to your company. You will have your own development center, supported by all operational services. Alcor helped Tonic Health, an American product software company, to create a platform for medical data collection.
The Pros and Cons Of Staff Augmentation Services
Before you start to experiment with staff augmentation, it is important that you understand the whole concept of this outstaffing model. Here are the pros and cons to team extension. Let’s begin with the benefits.
Staff augmentation gives you access to all of the skills that your company does not have. The staff augmentation model is a great option if you are looking for QA engineers to test your software, but don’t have the budget to hire them full-time.
Quick personnel scaling
Staff augmentation companies can help you quickly find the right talent and save you the time and effort required to hire and manage these talents. You can find middle engineers quickly without any hustle and bustle, for example.
Staffing agencies are very popular and can find the right specialist for your team. The staff augmentation model can be used to replace talent in your current workers if they are not able to meet your needs. After you have done this and benefited from the services your augmented employees provided, you can fire them.
Full-time employees are expensive to train, procure, and maintain. This is not the case with staff augmentation. You can save a lot of money by having outsourced staff work from home or at a provider’s location.
Although staff augmentation can seem like a great way to fill in the skills gaps quickly, there are some drawbacks to it.
Temporary employees know that the project is close to completion, and they are committed to it. They don’t care about the future well-being your company. Permanent workers, both remote and in-house, are more beneficial.
Long-term additional costs
If you’re looking at the long-term, staff augmentation can be a great option. It will cost more if you want to keep augmented employees. You will either have to pay a service fee, a commission, or a buyout fee for an augmented employee. In the long-term, staff-augmented workers will be more expensive than full-time on-premises workers.
You don’t have to worry about recruitment and management when staff augmenting. To make sure they are able to perform their tasks efficiently, it is important to take the time to onboard new team members.
IT Staff Augmentation: The Interim Stage of Business Expansion?
The benefits of IT staff augmentation services include the possibility that tech companies can now hire top talent not only in their country, but also abroad. Remote work has made remote work possible. This service is also stress-free and can save you tons of money, so IT business leaders often use it.
It is best to use IT staff augmentation as a transition phase in team upgrading. The process begins with hiring a few freelancers to make sure that it is safe, cost-saving and convenient. Next, you can move on to outsourcing.
Business executives then delegate all software development tasks to outsourced agencies. Outstaffing is the best option for IT companies who want to achieve the same results every time. While they receive the best talent for their projects, it is costly to pay the provider’s service fee.
These are the top managers who go all in for their offshore R&D offices development. They must compare the best places to work remotely in order to choose the right place. Next, they will choose Ukraine due to its large talent pool (200,000 IT professionals), and low payroll taxes (5%). Business leaders then compare the top providers and choose those who support them at every stage of offshoring.
Staff Augmentation vs. Managed Services
Management services can also be called consulting assistance for specific business tasks. Although managed services are provided by a company, they don’t have complete control of the project. Managed services help you to manage your tasks more strategically and keep long-term goals in mind.
Staff augmentation is completely independent of managed services. Your team’s success is still your responsibility and you will have to supervise the performance of your new employees.
Staff Augmentation or Software Outsourcing
Although software outsourcing is closely related to managed services, these are different concepts. Outsourcing business processes means that you give control of a project to third parties. This allows you to eliminate management completely.
Staff augmentation is a better option than outsourcing. You can address hiring issues if the candidate is not suitable and track the progress of your new team.
Staff augmentation vs. Dedicated teams
You can set up a dedicated team if you are interested. They will be loyal and focused on your project. You can invest in your long-term success by building a relationship with those who work for and alongside you.
You might think staff augmentation is similar to staff augmentation. The difference is in the management. While vendors usually supervise dedicated teams, the augmented staff recognizes them as their main manager.
Staff Augmentation and R&D Center
People mistakenly confuse “dedicated team”, “R&D centre” and “dedicated team” as one thing. To set up an R&D centre, you must first receive business process outsourcing services on request.
What does this mean? You need to find a trustworthy vendor that will recruit a full-fledged staff and set up an offshoring center for you if needed. This is a great way to team augment because you can get BPO services such as payroll, accounting, real-estate, procurements, legal support, payroll, and other related services.
This is what staff augmentation can’t boast of. This is where you get a worker or a group of workers, and then lose them when the contract ends. Your software R&D center will ensure that your international team not only supports and develops your product, but also cares about its future. Alcor is a trusted BPO provider that will provide a team like this.
It is your decision whether to implement staff augmentation. This team extension model may be a good option due to its benefits, including expertise, team scaling, flexibility and cost savings. Be careful not to rush into making decisions.
You may also consider outsourcing, dedicated teams, managed services, and a R&D center if you feel staff augmentation is insufficient. Smart business leaders choose a business expansion solution that helps them reach their staffing goals quickly, reduces costs and builds loyalty with their new employees. Only an offshore R&D office has been able to achieve all these goals.
People.ai’s R&D office is an example of such a company. It provides B2B optimization solutions via its AI-powered platform. Alcor created their Ukrainian offshore development hub in just 4 weeks and then hired over 25 people for People.ai.