Staff Augmentation: How To Power Up Your Company Effectively
Staff augmentation is incredibly popular nowadays. The major factor driving companies to outsource their business tasks is cost-saving, improved operational efficiency, better customer assistance, access to new technologies, and flexibility. The statistics show that staffing was a US$497B industry in 2019.
Within global temporary staffing, spending for hiring IT talents accounted for US$69B, making it the largest staffing segment in the market (37%).
The outsourcing of IT services enables companies to ensure their business continuity and embark faster on the innovation bandwagon. Modern executives also strive to achieve flexible scaling of their software development teams taking into regard current project demands, budget, and cash flow. Therefore, if you want to succeed in a fast-paced IT environment, you must have a powerful workforce and a well-designed strategy tailored to company goals.
Reaching out to a trusted software development company is a standard way to obtain great results while saving costs and improving bottom and top-line growth. With the global market size of outsourced application development services estimated at US$85.6 billion, staff augmentation can become the most efficient strategy.
What Is Staff Augmentation?
Staff augmentation is the use of external employees of various specialties to expand the capacity of one’s company for a limited period of time. This type of outsourcing model implies hiring distributed teams and separate specialists in order to fill voids in the ongoing projects in accordance with current business goals. Companies hire third-party employees based on the lack of in-house specialists for short or long-term cooperation.
According to a trusted report, up to 75% of organizations are likely to cooperate with outsourcing custom software development companies to get services as well as employees when necessary.
In a Global Outsourcing Review by Deloitte, outsourcing has become omnipresent in all aspects of a business, compared to the previous focus on solely back-office tasks. For example, big corporations employ outsourced teams to implement RPA (robotic process automation). Meanwhile, smaller businesses prefer staff outsourcing to increases efficiency, expertise, flexibility, cut operational costs, and other reasons:
Types Of Augmented Staff
There are several commonplace types of staff augmentation, which vary based on the longevity of cooperation and skills required. The first classification includes:
- Distributed Team on a Temporary Basis
This model works for those who need developers or other specialists urgently. Cooperation with a reliable IT staff provider allows for saving time needed to find tech-skilled people and getting objectives accomplished within weeks. On the contrary, recruiting will require months to find a lacking expert.
- Distributed Team on a Long-Term Basis
This approach enables companies to get the team for as long as they need. Such teams often become a part of the client’s organizations, as they work there for years. Long-term collaboration allows recruiting o hire professionals with in-depth experience and on par soft skills.
The second classification includes:
- Team without specific skills: The company hires a dedicated team or separate employees if it doesn’t have workers in place to perform tasks that don’t demand certain expertise.
- Skill-based team: Company hires a dedicated team or separate employees when based on the necessity of having specialists with specific mid-level skills.
- Highly-qualified experts: The company hires a dedicated team or separate employees when it requires high-level professionals for performing certain tasks.
Advantages and Disadvantages of an Augmented Staff
Outsourcing technical specialists has its pros and cons. Benefits include faster execution times, access to a global talent pool, scalability when needed, cost-effectiveness, and collaboration with highly skilled developers. Disadvantages include security and privacy risks, governance issues, and others. In general, we are going to delve into the essence of the matter.
Access to a global talent pool. Earlier, companies used to rely on the employees available in their local market. Thus, they often had to understate their requirements when recruiting new workers because of the lack of talent. Currently, the situation has changed thanks to the ability to outsource services. Outsourcing opens new horizons for employers worldwide. They can hire people from any country if the person meets their expectations.
Effective communication. According to recent research, almost 90% of employees and C-suite managers report low cooperation or poor communication are the primary causes of failed projects. Another study reveals that 70% of unsuccessful teams are associated with a lack of interaction between team players.
Modern staff augmentation service providers offer staff with high soft skills levels, including sociability and readiness to help. Outsourced employees are non-contentious and open to communication.
Benefiting from project management tools. Organizations using any PM tool usually save more costs, execute the tasks faster without compromising quality standards. Therefore, they are typically satisfied with the results of the work.
Distributed software development teams leverage various PM programs to drive the performance and transparency within a project, identify weak points, fix issues instantly, and more. Among others, these PM tools include Jira, Zoho, Crocagile, and others.
Today’s AI-driven project management software can effectively manage scheduling, reminders, and follow-ups to remove the need for human involvement. This saves employees time on their other tasks by helping to ensure that nothing is overlooked. These intelligent tools integrate with Slack as well as with JIRA to make workflow efficient.
In general, PMs (project managers) spend over 50% of their time on organizational tasks. AI bots can take over less valuable, routine, and manual work, saving time for PMs twice. This allows PMs to pay more attention to the core processes of their management duties.
Flexibility in recruiting and work. Augmented staff vendors offer their clients the opportunity to save time and budget needed to find, interview, and hire a new specialist. Moreover, firing a person requires many resources as well as hiring.
Custom software development companies offer contractual staff outsourcing on a temporary or permanent basis. Thus, clients don’t have to worry about searching and hiring as the vendor does all this work.
All the while, distributed teams offer flexibility directly during the development phase. Agile projects are known to be responsive to any changes, unlike traditional models. According to the survey, Agile teams are two times more likely to succeed, and one third less likely to fail.
When dealing with outsourced staff, both parties often need to find a common ground in resolving work matters. Augmented specialists usually have good experience in collaborating with in-house teams and apply the best workflow management techniques. By being flexible and encouraging feedback, distributed developers can find more effective solutions to increase business value.
Reducing expenses. Any outsourcing project helps cut costs across many levels of a company-client. The first economy is removing the need to pay taxes, vacation days, maternity and paternity leaves, and sick leaves to the distributed team. Second, you save on recruitment and legal arrangements. Choose to work with a staff augmentation provider on an all-inclusive basis – and you’ll definitely get all the above-mentioned services done for you.
When it comes to salaries, you’ll pay three to four times less for a hired Ukrainian software engineer than for an American or twice as low as an Israeli. This is because their compensations already cover all taxes, social package, and secondary expenses such as office space, workplace, and other assets.
Saved costs for training. Organizations deciding to augment their staff gain access to the latest technologies without teaching in-house employees to exploit them. Usually, training courses are costly, and companies refuse to use brand-new techs. Vendors of outsourced services like Innovecs frees you up from conducting expensive training and allows for hiring top specialists with in-depth expertise in emerging technologies such as AI, ML, NLP, deep learning, augmented and virtual reality.
Full-time technical maintenance. Businesses with on-premise hardware, software, servers, and other IT resources have to handle everything by themselves. They must perform monthly payments, maintain and repair equipment, run documentation, and buy or remove additional resources if a business needs to scale up or down. In a case where there is cooperation with an outsourcing software development company, clients usually don’t take these responsibilities and can be busy with other tasks.
Minimized managerial influence. Since you outsource personnel out of the office or even in another country, you can’t be fully in charge of their actions. You need to ensure transparent and effective communication is set between both sides. It’s crucial to keep augmented and local teams on the same wavelength so that projects run successfully. It’s team leaders and project managers who are accountable for smooth collaboration. Without proper leaders, the process may turn into a disaster. Luckily, at Innovecs we have managers with a proven track record.
Security risks. Hiring distributed staff might mean you have to entrust a vendor with your sensitive data. To avoid privacy-related issues such as data leaks, fraud attacks, loss of information, ensure your cooperation is under stringent NDA agreements.
Cross-cultural communication gaps. Some organizations might require additional training for the local team to deal with the distributed employees. Unlike augmented staff, in-house workers can face difficulties while working with colleagues from other countries. Culture and language differences may become bottlenecks in communication. So, to prevent chaos and misunderstandings, companies should organize future collaboration properly.
Staff Augmentation Vs. Other Models
Hiring augmented staff isn’t the only effective way to deal with business inefficiencies and lack of specialists locally. There are many other similar but different in the core models. You may opt for cooperation with MSPs (managed services companies), outsourcing an entire project, creating owned R&D centers, hiring a team of freelancers, and more.
From previous sections, it becomes clear that augmented staff providers allow clients to temporarily power up their local software engineering teams by adding highly-skilled technical staff project-wide, or during certain stages. Thus, this type of IT staffing can help enterprises to stay afloat in the market and drive their success. Let’s find out the common downsides and upsides of the suggested IT staff augmentation approaches.
Adopting Managed Services
Another outsourcing approach that is gaining momentum now is managed services. The global market for MSPs is projected to reach US$309.4 billion with an annual growth of almost 10% in the period 2019-2025. Typically, MSP and outsourcing companies are similar. Essentially, MSPs offer distributed IT services on a long-term basis. In contrast, the project outsourcing model works on a project-by-project basis.
For example, a vendor of managed services offers a skilled team and a variety of IT resources. You can hire the required number of experts as well as needed infrastructure components to satisfy your daily operational needs, such as software improvement, fixing technical issues, managing applications, and more. Simply put, the MSP should do everything to keep your office working correctly and in proper order. The payments for such services are usually fixed and performed regularly each month.
- More resources available. Unlike dealing with augmented staff, an MSP provides full support and maintenance of the project.
- Higher levels of delegation. This is a good choice for a company wanting to streamline its resource planning and entrust its in-house team with more valuable activities.
- Immediate start of a project. Since MSPs have developers in place, clients don’t need to wait until the hiring process is completed. Thus, any project can start in a blink of an eye.
- Inability to fix issues locally. MSPs can be located in most other countries, making it tricky for clients to repair hardware or handle other technical problems by themselves.
- Expensiveness. Dealing with a trusted MSP is costly. Typically, clients have to pay for the services monthly on a subscription basis and pay some additional costs in advance. But keep in mind that an MSP will help reduce other expenses. For instance, it provides you with access to a rare technology that you don’t need to buy by yourself.
Outsourcing Your Project
The main distinction between adopting augmented staffing and choosing to outsource your project is that with the first approach you buy human resources (engineers, DevOps, data scientists, etc.) while keeping full control over your personnel. With outsourcing, you purchase a particular outcome agreed in advance and take responsibility for any occurring risk together with a contractor. Although, you delegate direct governance over specific assets of your business processes.
- Cost reduction. Interestingly, 59% of businesses adopt outsourcing to reduce their costs. No wonder, once the contracts have been signed, the contractor-company takes over many cumbersome, time-intensive, and costly tasks (configuration, training, managing a remote team). Outsourcing providers do everything – up to releasing a full-featured and working software.
- Access to advanced technical expertise. Additional research confirms that modern IT executives (42%) face difficulties when finding and hiring talented and experienced specialists.
- Center attention on local teams. By entrusting remote teams with a burden of tasks, clients can free up their local employees and assign more project-critical duties to them.
- Minimum flexibility. Since the conditions of collaboration are prearranged by the agreement, clients have less flexibility when they want to make changes.
- Less managerial control. Clients almost fully depend on the vendor’s expertise.
- Misunderstandings. International teams are more prone to interpersonal disagreements since the various teammates can not share the same values and priorities. Thus, project managers and team leaders should strive to forge an atmosphere of trust and mutual aid.
Recommendations on Choosing a Proper Staff Augmentation Model
Once you’ve realized you need to augment your business with additional personnel, resources, services, it is important to pick the right approach. The following recommendations can help you.
- Determine the longevity of your project. If it’s expected to finish in 6-12 months – augmented staff is perfect for you. For more durable projects, think over another approach, such as outsourcing a project.
- Protect your most critical and highly-sensitive data. It’s recommended to make agreements under stringent NDA conditions and only with reliable vendors. Trusted software development providers like Innovecs always keep clients’ data safe and secure.
- Define the budget for training your local employees to help them cooperate with remote staff based on a chosen approach. It may happen that remote staffing and purchasing services on demand by a third-party vendor can be too expensive.
To avoid hurdles in the future, consider our tips, and add them to your strategic planning. Outsourcing of any type can be a win-win for both – client and contractor when accurate and beneficial agreements are made.
Pay attention to these tips and you’ll find the right outsourcing vendor:
Check the reputation – After monitoring the market of outsourcing firms and their locations, it is best to check reviews of the previous or current clients (if possible). Also, there are specialized sites for job searches where employees rate companies, taking into account various factors: work atmosphere, benefits, salaries, and executives’ attitude (visit Glassdoor, Linkedin, Indeed).
To check professional achievements, see top-performers on the Inc.com website or the G2Crowd platform. For instance, Innovecs was recognized four times on the Inc. 5000 list as one of the USA’s fastest-growing companies. The 2020 year isn’t an exception.
Check tolerance and ethics – Effective cooperation depends on teamwork, relationships between both sides, ability to avoid disagreements or resolve them lightning fast. A provider should be ready to quickly satisfy the client’s requirements and respond to questions and changes.
Check readiness for challenges – Prior to signing any contracts or proceeding negotiations on the future partnership, ask how a vendor reacts to challenging and non-standard situations, how fast they deal with them.
Check team scaling opportunities – Any business working in the outsourcing niche should be ready to provide scalability opportunities on demand of a client. Ensure the firm you want to cooperate with is ready to provide you with staff and resources when needed and without having to wait for weeks.
Check sociability skills – Augmented staff should be prepared to work with international teams. So, reliable MSPs, outsourcing agencies guarantee that their developers and other specialists speak English on a decent level.
Check availability of decent workplace for a remote team – The efficiency of distributed teams depends on their working conditions. Ensure that your hired employees have the necessary hardware and software to work productively on your project.
Conclusion: Power Up Your Business With Innovecs
Hopefully, our tips and tricks will help you find the perfect match for cooperation. As you might have understood, expanding business capabilities with the engagement of third-party staff and service providers can be super beneficial. It allows for:
- Cost-effectiveness and time saving
- Access to advanced PM tools
- Effective and clear remote interaction
- Access to rare emerging technologies
- Access to highly-skilled talents globally
- Flexibility and ability to scale resources on demand
Innovecs has a profound eight-year experience in the IT outsourcing sector. We are ready to offer a full spectrum of outsourced services, be it experts with exclusive technical skill-set or partial assistance of your project on its particular stage. Besides picking the right IT staff for your current needs, we can suggest a full-cycle software development with afterward maintenance.
Contact our representatives today to learn more details and get an in-depth consultation. We guarantee a smooth and effective collaboration, delivering the desired results timely and on budget.