Staff Augmentation Vs Outsourcing Vs Project-Based Consulting —Which One to Choose?

No matter how competent your workforce is, you may need the support of external specialists at some point. But even with that, there is no unique, standard way this could be done.

To accomplish their long- and short-term objectives, organizations tend to engage professionals under three popular models—staff augmentation, outsourcing, and consulting.

The goal with each of them is clear: get the services of technical experts for your business. At the same time, however, these strategies complement distinct business scenarios.

Sometimes, you just need extra pairs of hands for your project; other times, you should be better off contracting out the entire project. In other cases, you require a technical pundit by your side for ongoing support.

Deciding which model is right for you can be confusing. And if you take a wrong step, the damage can be lasting.

To make your decision-making process easy, this guide will draw an in-depth comparison between staff augmentation, outsourcing, and consulting

Together we will discuss their use cases, winning features, important considerations, and limitations. So, let’s take a deep dive!

What is Staff Augmentation

Ever thought about giving wings to your in-house team? With staff augmentation, it is possible!

Staff augmentation is a hiring model where you get people on board temporarily to enhance your staffing potential. In other words, the augmented staff provides the technical input on projects and fills up talent shortage in your human resources.

Though it has a wide array of intricacies, the highlight of this model is ‘greater control’. The temporary staff works under the supervision of your managers, catering to feedback and instructions throughout.

Putting into context, suppose you have user interface experts in your company but you miss out on experienced app developers. You could hire a few app developers but you do not have time in reserve. In such cases, staff augmentation might be a reasonable solution, allowing flexibility at every step.

Highlights

• Enables you to scale up and down on short notice without having to undergo the hassle of recruiting. Plus, if utilized appropriately, it is a cheaper option as opposed to having full-time employees.
• You are saved from paying the usual employee benefits like sick leaves and paid holidays.
• You can save money and time on training since the augmented staff usually comprises highly skilled and experienced individuals.
• The administrative tasks (payroll, legal compliances, paperwork) are covered by the staff augmentation vendor. This saves your employees from undertaking tedious tasks, increasing their productivity ultimately.
• You get a great deal of control and oversight, which enables you to take charge of the project’s nitty gritty. This adds up to quality assurance, enhanced efficiency, and a good chance to meet your objectives.
• It is much easier to integrate temporary teams into your work setting compared to outsourced teams, which tend to have more deep-rooted cultural and technological differences.
• You can set up remote teams and leverage talent diversity around the globe and use cost variations to your advantage.
• Suites contingent work nature better: if you tend to have spikes in productivity, diverse project contracts, or accelerated timelines without notice, staff augmentation has you covered.

Challenges

• The managerial control over the project pathway requires meticulous supervision, which means clients could be shifting focus from core business objectives.
• While there wouldn’t be a need to train the extended personnel as recruits, you would still need to spend time getting them familiarized with internal processes, tools, and work culture.
• Integrating external individuals into your workflows means rendering your confidential and sensitive information vulnerable to theft or exposure.
• Not a reasonable solution for long-termed projects; it could turn out to be costlier than hiring and retaining permanent employees.

Defining Project Outsourcing

If you supplement your in-house team with a bunch of app developers to design an android app, it would be staff augmentation. But if you hire an independent team of app developers to design an app for you, it would be project outsourcing.

Project outsourcing is a management strategy that uses outside resources to perform operations otherwise handled by in-house staff. The outsourcing agency works without the influence of the client, who in turn is concerned with the result— not the process.

In staff augmentation, the burden of risk stays mainly on the client since they are actively involved in the decision-making and monitoring process. In outsourcing, however, the outsourcing agency is predominantly accountable for the outcome.

Highlights

• You don’t have to undergo the arduous cycles of recruiting and integrating resources into your workflows.
• There is little to no training involved unless you have legacy or proprietary systems in your company.
• There is no need to spend time and effort on managing the external workforce since the project management is handled by the vendor.
• You can tap into global markets and get access to talented individuals at cheaper rates.
• The managers are free to work on mission-critical projects or core areas of the company.
• There are better odds with the deadlines since it is a determining factor while hiring an outsourcing agency. By contrast, deadlines are usually negotiable with internal staff.
• It is much easier to scale this model than staff augmentation. This means you can increase the capacity or expand your project actively.
• Another benefit is that the turnover hardly impacts the task’s progress. Since the focal point of an outsourcing contract is production (regardless of who does the job), the ups and downs in staffing do not matter.
• The vendor is solely responsible from the start to finish. This includes allocating the right members to the project, arranging required materials, developing, implementing, testing, evaluating, and more.
• Giving away managerial roles to a third party means saving yourself from managerial overheads.

Challenges

• While passing on managerial control brings you peace of mind, it also hampers communication protocols. In the case of an offshore partnership, this is compounded by time zone differences and language barriers.
• The reputation of the outsourcing team is a critical factor since you are putting the fate of your project in their hands. Given you do not have managerial power during the development phase, you could face quality issues ultimately.
• Not as cost-effective with smaller projects. This comes from the fact outsourcing companies usually charge a premium for low-scale projects or don’t accept them, to begin with.
• Project outsourcing could be a slow process. Expect double damage if complete project aspects and legal considerations are not finalized before initiating the partnership.
• Outsourcing is generally expensive. Why? Because the vendor handles every element of the project, assigns a competent workforce to handle the work, and is responsible for the end product.

Defining Consulting Service

Suppose you want someone to finetune the digital presence of your business but you are not sure:

• What digital marketing channels you should focus on.
• If there is any need to do rebranding. If so, how?
• If you should optimize your website and application.
• How to boost your interaction with your online audience.

In this scenario, your best shot would be a consulting service. The reason is you not only need an extra pair of hands to provide digital services, but you require guidelines and a roadmap as well.

Project-based consulting entails a one-stop-shop solution, comprising conceptualization, planning, staffing, management, and post-launch support. It is ideal for businesses that are yet to have a firm footing in the corporate landscape and require seasoned professionals to determine the scope and vision of projects.

Highlights

• Provides seasoned professionals to set the right strategies for your business, as well as specialists to execute them successfully.
• You do not have to look any further as consulting solutions pack everything you need from start to finish.
• You can utilize your employees where it matters the most instead of wasting their potential on domains where they lack skills and expertise.
• Specialized consulting services are equipped with complete infrastructure. For example, a digital marketing agency would have a keyword research tool, automation tool, email marketing subscriptions, and more.
• A proactive strategy—works best when narrow error margins exist and a wrong approach could put an unrecoverable dent in your business profile.

Challenges

• A consulting service is usually engaged with multiple clients simultaneously, which incurs a delay in communication.
• Usually, the most expensive option when full-fledged is utilized. This makes sense considering you are getting 360-degree solutions (expertise and resources) and working under the guidance of industry leaders.
• Most consulting services have a one-size-fits-all approach and predefined strategies. As a result, there might be a slight mishit with the target.

Summarizing The Differences

Which One to Choose?

Staff augmentation, outsourcing, and consulting are three of the leading strategies organizations use to manage their productivity. However, they only yield optimal results when deployed accordingly.

Let’s recap which situations call for the three types:

Use staff augmentation when:

• You have a missing skill gap for short-term purposes.
• You want to keep operational control of the project.
• You are willing to extend resources for the project’s execution.

Use outsourcing when:

• You are only concerned with the end results, not the approach.
• You don’t want to interfere with the process, just some scheduled progress reports/meetings should suffice.
• You want the required resources to be on the vendor’s part.

Use consulting when:

• The strategies and processes are not well laid out.
• You want expert-level guidance and resources—from inception to execution.