By the end of 2023, the spending on IT outsourcing is projected to exceed the staggering $1.3 trillion figure.
So, why are more and more businesses looking to outsource their business processes? As it turns out, cutting costs, achieving greater flexibility and agility, and improving efficiency are some of the top motivations at play.
The highlight of this article is going to be staff augmentation—a relatively new outsourcing model that can help you achieve these outcomes.
By outsourcing short-term business roles to third-party professionals, staff augmentation reinforces your workforce capabilities. But does this staffing solution align with your business objectives?
Keep reading to discover staff augmentation benefits, what challenges it poses (including workarounds), and the top features of a temporary staffing company.
7 Benefits of Staff Augmentation
Despite having highly skilled staff, you might fall short of the prowess required for certain projects. Hiring permanent staff would be unfeasible considering the project’s short-term timeline or tight deadline.
One of the biggest benefits of staff augmentation is that it makes up for the skill gap in short-lived situations. You bring experts on board, pay them one time, have your requirements fulfilled, and part ways.
You could appoint as many specialists as you want whenever you want. And, it is much quicker to onboard and sign off this way as opposed to months-long recruitment cycles.
2. Global Talent Market
Companies often end up dialing down their expectations to match local talents. Thanks to staff augmentation, you can tap into talent communities globally. This allows you to widen your opportunities and fill in the skill gap without compromising on your requirements.
Take for example top IT centers like India, China, and Brazil, which predominantly account for global IT services. Resource augmentation allows you to access talented individuals in these regions and leverage their knowledge and caliber.
3. Pricing Options
Besides giving access to a bigger pool of talent, engaging global communities serves another benefit—pricing variation.
Now, if you have a lower budget than the average rate in the local labor market, attracting top talent would be unlikely. With the staff augmentation strategy, however, hiring remote teams becomes a possibility. As a result, you can hunt experts in regions where service costs or hourly rates are lower than yours.
4. Cost Efficiency
Why engage 4 employees on a project that can be done by 2? Why hire someone permanently for a project that will last for 2 months?
Hiring augmented staff is a good way to manage your resources in contingent settings. It keeps you from investing in people who are not the best fit for your projects.
5. No Training Required
Another staff augmentation benefit is that you not only save money on hiring and legal fees, but exempt yourself from training as well.
To keep up with industry trends and technologies, enterprises arrange ongoing training for their workforce. One of the best parts about resource augmentation is that the vendor is responsible for training, saving us the extra cost.
6. Quicker Integration
Hiring full-time workers come with a sequence of stages, with each requiring considerable resources. Starting with writing a job description and posting it on appropriate job boards, you shortlist and interview several candidates, do the necessary paperwork, and provide onboarding support.
By contrast, the preliminary work is taken care of by the vendor with this staffing solution. This means you are mainly left with just interviewing and onboarding.
What’s more, staff augmentation companies have experienced and highly skilled individuals in their talent pool, ensuring shallow learning curves. In other words, the expertise of these individuals would allow them to quickly understand your problem, map out the solution, and execute it seamlessly.
7. Administrative Support
Besides tedious hiring prerequisites, companies are also responsible for complete in-house operational management for employees.
For starters, you have to take care of infrastructure and facilitate employees with everything required to perform their duties. Other administrative tasks would be payroll management, insurance, legal formalities, team building, and more.
And that takes us to another reason why contingent workers provide big relief. All you have to do is pay a premium to staffing service and they would take care of hiring and operational expenses.
8. Greater Control
Staff augmentation offers better control since these new hires will be coordinating with your in-house staff. For one, it gives you more visibility and control, allowing you to track performance, review plans of action, assign jobs, or improvise decisions.
Apart from that, there won’t be any intermediary between you and the temporary staff. This saves you from unnecessary delays and miscommunications.
Challenges of Staff Augmentation
Like every business strategy, there is a flip side to staff augmentation as well. Let’s find out staff augmentation challenges and how you can prepare for them.
1. Managerial Expertise Required
Staff augmentation offers you better control since you are directly coordinating with the augmented teams to execute your projects.
This comes with a hiccup, however—you would be doing management on your side. What it means is that you should be great at managerial facets.
If you don’t have a tech-savvy manager who knows about product development, operational management, and basic knowledge of technical aspects, you are not ready for this model.
2. Language Barrier
Another problem businesses run into is the communication gap coming from language differences.
This is especially at play when you are touching upon international regions for hiring. It makes sense considering those candidates might not be able to speak your language on a similar level.
If that is not enough, time zone difference poses another obstacle when working with teams beyond your national borders.
These problems can largely be avoided at the time of selecting your staffing service. Raise this concern to your vendor and see if they offer any assurance. We also recommend that you test your candidates’ language proficiency during interviews and schedule regular meetings based on mutual convenience.
The risk of compromised confidentiality is a big concern as you are engaging third-party actors with your in-house operations. On top of that, some projects and clients’ details are sensitive and you cannot afford to lose them to a data breach.
One way of getting around this risk is by signing an NDA to keep your business data protected, coupled with frequent security audits by staffing vendors.
However, NDAs do not make your confidentiality watertight. The best course of action is to choose a reliable staff augmentation service—one that follows strict security protocols and policies to avoid data theft.
If you are staffing teams from different regions, you would want to be careful about cultural differences. More often, there are variations in terms of work ethics, approach, and mindset.
To avoid having a mismatch of expectations, keep assumptions aside and document your every requirement. It would be best if you learn a bit about the work practices of the place you are hiring in.
5. Quality Control
Another challenge with remote workers is limited accessibility. Despite setting up meetings and checking closely with them, it would not match the accessibility you have with onsite workers.
Other than that, the extended personnel does not guarantee perfect outcomes as a rule of thumb. You could still run into project delays, inefficient processes, and expense overruns.
To keep this from happening, take your time while selecting a staff augmentation company. Check out their reviews and interview candidates carefully. Once you have external actors hired, make sure to keep strict control with your competent managers.
6. Uncontrolled Expenses
Temporary staffing and outsourcing are usually done at hourly rates. Now, if you have a clear idea about your project timeline and budget, this works great.
You can take hourly rates from different candidates, weigh them, and settle for those who offer the best value for money.
The trouble comes when you are not sure about how long your project will take. Because of this, it will be hard figuring how much money to set aside for it.
If that’s the case, go for a fixed-price contract. It will give you a clear idea of the prices of staff augmentation for your venture. Since this model usually involves commissions and overhead fees, the hourly-rate solution is more feasible for short-term, well-defined projects.
Features Of Staff Augmentation Company
With the right staffing agency, most of your staff augmentation challenges would be resolved. So, make sure you are knocking on the right door by digging into these features:
Quick and Reliable
If you have strict deadlines to follow, the top element to look out for is service speed. If your staff augmentation vendor is slow and rambling, it kills the whole point, doesn’t it?
Having a seamless and rapid experience from the staffing company would help you manage project timelines better and satisfy customer expectations.
Broad Range of Skill Set
The best staff augmentation company would have a wide array of skilled individuals in different industries. This would ensure you get plenty of choices for the task at hand and assess rigorously before finalizing.
What makes this feature necessary is that you wouldn’t want to spend your time training augmented staff. Having a long-serving, talented team would shorten knowledge transfer time and enable you to utilize resources efficiently.
It can’t be stressed enough to appoint only a well-reputed staff augmentation company—one with established audiences and a bunch of case studies. Even better if they have big names in the list of their clientele, together with global outreach.
Granted, you would want to save your budget, but skimping on cost for compromised quality would only create bigger issues down the road.
Major Misunderstandings About Staff Augmentation
Since staff augmentation is an emerging model, it comes with its fair share of misunderstandings. Here are 2 of the most common notions regarding it.
1. Staff Augmentation Is Cheap
Some hiring managers believe they can always use staff augmentation to avoid the cost of hiring full-time workers.
It should be established that staff augmentation is not a cost-avoidance scheme.
At the end of the day, staffing agencies are paying benefit costs. Naturally, these are factored into the equation while giving you a quote.
With this notion solely, you might end up paying more than what could’ve been done economically with a full-time workforce.
2. Staff Augmentation Is Expensive
Others argue that a contingent worker that charges $45 per hour would outweigh the cost of a full-time employee.
Let’s be mindful that you are not just paying the basic salary of an employee. It comes with incentives like health insurance, bonuses, 401K, and ongoing training.
Keeping this in view, the cost of staff augmentation could be much more reasonable in the grand scheme of things.
What You Should Know
If you are considering or rejecting staff augmentation out of any of the 2 above-stated misunderstandings, you are headed for failure. Staff augmentation indeed is a promising way to manage your resources, but only when implemented in an appropriate situation.
Doing a bit of math upfront is the only way to know if it’s worth spending money on. Calculate how much resource augmentation would cost you and put it against employee cost to select a viable model for your ventures.
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Staff augmentation uses external staffing to either collaborate with your existing resources to provide skilled support needed on short-term business activities or complex projects.
What is the difference between staff augmentation and outsourcing?
Traditional outsourcing refers to a strategy where you are contracting out the full project or some business aspects to an external facilitator. By contrast, staff augmentation just provides you with the required assistance while leaving you with control over the project.
Is staff augmentation important?
Staff augmentation packs a bunch of business benefits, making it a powerful outsourcing solution. It gives you flexibility and speed, an array of pricing, access to global talent communities, cost saving on training, quicker integration, and more advantages.
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