Nearly 54% of companies experience talent shortages all over the world. In fact, it has doubled when compared to what it was a decade ago. In 36 out of 44 countries, HR managers find it difficult to find and attract skilled talent to their teams, according to Bloomberg.
And this is why outsourcing or staff augmentation is extremely useful, especially when it comes to IT services. Today we’re going to dwell more on IT staff augmentation. We’re going to find when and why businesses should opt for staff augmentation services. Let’s start with the definition of staff augmentation.
Staff augmentation is one of the outsourcing models that allow for hiring tech talent globally and managing augmented teams. When comparing staff augmentation vs. outsourcing, there is one key difference to point out. According to the outsourcing model, the provider needs to deliver a mobile or web app at a defined price, and staff augmentation provides developers at a defined price for hours of work. Recruiting and hiring in-house employees isn’t the only option for most companies all over the world.
Following the rules of IT staffing, the company can hire staff for a particular project. For example, you’re going to develop an app, and you need five developers and three UX designers, but you have only one developer and one designer. Finding and hiring four in-house developers and two UX designers may take 2-3 months, postponing the launch of your app and requiring more time and money.
When taking advantage of IT staffing companies, you can get all the employees you need in a few weeks. And IT staffing helps to get your app developed and launched much faster. Moreover, you don’t need to fire the developers who worked on your app development when the project is completed.
IT staff augmentation is an easy way to scale up and reinforce your in-house development team. Outstaffing offers numerous benefits for businesses of all spheres and sizes. It adds unmatched flexibility that you cannot reach with your in-house team.
IT staffing eliminates the recruiting and hiring processes. Thus, you don’t need to handle the paperwork and official registration. Also, firing your staff is quite burdensome. And it’s much better to use IT staffing services when it comes to short-term projects.
There are many scenarios when companies can take advantage of staff augmentation, including:
|Hire additional employees||When you need to fulfill a temporary spike in your project or everyday work.|
|Bridge the labor gap||Sometimes you cannot hire local developers for your in-house team, and here staff augmentation services are extremely useful.|
|Get specialized skills||When you need a specialized developer for a short-term project. For example, a Unity developer when you can’t find one for your in-house team.|
|Add more flexibility||Expand your team anytime you need it, without recruiting and onboarding.|
Staff outsourcing becomes more and more popular. According to SIA research, staff augmentation companies generate $490 billion of revenue and it’s said that it will grow up to 4% in the nearest future.
While taking advantage of staff augmentation, companies can solve a wide range of staff problems, including:
- Hiring in-house specialists is more expensive
- The process of recruiting new staff takes more time and effort
- Employee turnover rate is growing today
- The local talent pool is quite limited
- Local top specialists are often more expensive than the budget allows
Staff augmentation companies don’t manage the staff, unlike outsourcing companies. When it comes to staff augmentation, the end client supervises the employees. Tech staffing is like getting extra developers anytime you need them for short-term or even long-term projects.
Need more information about staff augmentation with DOIT Software? Contact us, and we’ll power up your in-house teams with our experienced developers.
We’ve already discussed the major pros and cons of outstaffing. And it’s time to find out how you can benefit from staff augmentation. The benefits are closely connected to its advantages, including:
You can hire developers from all over the worldBefore outsourcing entered the market, companies used to be dependent on a local labor market. Thus, they often had to reduce their benchmarks and indicators to hire the needed specialist because there was a shortage in the local market.
And nowadays, staff augmentation services work anywhere in the world. And companies get access to a global talent pool instead of a local labor market. They can recruit employees all over the world to find exactly the specialist they need for their project.
You can add developers anytime you need themRecruiting and hiring an in-house employee is a costly and tedious procedure. Your HRs search and select specialists, screen and interview candidates, negotiate the employment terms and take care of all the paperwork.
And while cooperating with outstaffing companies, your HRs can focus on more primary needs. IT staffing and recruiting with IT staffing companies helps avoid the hassle of legal arrangements and paperwork.
You can get your app developed at half of the priceOutsourcing of any type helps reduce the project cost on many levels. You don’t have to pay for days off, maternity, and sick leaves when you’re taking advantage of staff augmentation. And you don’t have to take care of legal and recruitment issues. All the costs associated with the hiring procedure are borne by the vendor who charges a premium for their all-in-one service pack.
You don’t need to train your developersAlong with recruitment and legal costs, you can save a pretty penny on training. As an employer, you need to keep your developers abreast of the latest technology and trends that require regular training, etc. But when you’re taking advantage of staff augmentation, the vendor takes care of staff training.
You can get rid of legal and management issuesThe all-round administrative support is the last but not the least benefit. Companies that recruit and hire staff on their own need to take care of daily staff management and provide employees with everything necessary, including equipment and software. And not to mention, payrolls, accounting, insurance, legal issues, team building, and leisure activities. That’s quite a lot of things to deal with.
But when you cooperate with a tech staffing agency, you can delegate all the routine tasks to the vendor and spend more time on your core business needs. It’s super convenient, isn’t it?
However, there are also drawbacks that you need to consider while choosing an outsourcing model for your business. Don’t forget to check out the section on the pros and cons of staff augmentation mentioned below.
Now that you know what staff augmentation is, it’s high time to find out its types. There are several staff augmentation types that you can use for your business needs. Let’s find out how the master vendor staff differs from traditional staffing and what other options we have.
|Type of staff augmentation model||What is it?||Pros||Cons||Where to utilize?|
|Traditional staff augmentation||Traditional providers of temporary employees||Flexibility||Hard to find the appropriate provider||For all project types|
|Master vendor staff||Large-scale staffing||
Easy to scale
|Inconsistent talent quality||Temporary workers to fulfill gaps that the company cannot fill itself|
|Boutique agency||Smaller companies focusing on a particular skillset||High quality||Quite expensive||For rare skill set and exclusive needs|
|Gig platforms||Online platforms with instant access to independent freelancers||
|Inconsistent talent quality||For short-term and minor tasks|
|On-demand talent platforms||Online platforms that provide access to highly-skilled employees||
|Quite expensive||For all project types|
|Independent contractors||Independent contractors engaged directly by companies||
|Difficult to find the right contractors||Tasks without a clear focus|
As you can see, finding a freelancer on Fiverr is also a type of staff augmentation service. Generally, IT staffing comes in a variety of shapes and forms depending on the business sphere. But how to choose the right staff augmentation model for your business? Most companies don’t rely on one model, they use a mix of providers depending on their business needs.
When you’re considering staff augmentation, the most important thing is to determine what you want to get and accomplish and what is most important.
For example, you’re looking for a specialist in artificial intelligence or machine learning, prioritizing cost will be unrealistic. In this case, you need to prioritize a skill set required for your project.
There are dozens of staff augmentation companies and models, but it’s crucial to know what you want to accomplish, weigh all the pros and cons before choosing a staff outsourcing model.
Like any other outsourcing model, staff augmentation has its own pros and cons. Let’s find out how staff augmentation can influence your business.
Pros of staff augmentation
- Access to a global talent pool
While outstaffing, you don’t need to hire local developers. You get access to a global talent pool. That allows for recruiting skilled developers from any part of the world. No matter where you’re located, you can hire top developers from the US, Germany, Ukraine, or the Philippines. And hiring staff from Eastern Europe allows for saving costs and getting top-quality mobile and Web app developers for your business.
- Unmatched flexibility
You can get as many specialists as you need for your project. Staff outsourcing works with both long-term and short-term projects. It allows for easy scaling up or down anytime you need. Outstaffing provides unmatched flexibility for your business needs without recruiting and other legal issues.
- Reduced costs
While taking advantage of IT staffing, you save on recruiting and office rental. And moreover, developers from Eastern Europe, the Philippines, or India charge less when compared to your local specialists.
When you’re building an app with developers from Ukraine, you’re likely to save around 45% of your budget when compared to developing your app with US-based developers. And the quality of the code will be top-notch in both cases.
- No training
According to a staff augmentation model, you don’t have to spend time and financial resources on your employee training. You get full-trained developers with the right skills and knowledge.
As a rule, developers working with IT outsourcing companies are multi-trained. They work with different technologies and types of apps, unlike in-house teams. Such developers know a lot about new technologies and frameworks. So what is better, to spend hours and thousands of dollars to train a few in-house developers or take advantage of fully-trained developers?
- Full administrative support
As a rule, a staffing vendor takes care of bills and payroll. You need to focus on your business and your vendor will think about everything else. Hence, you get more time as well as resources to focus on your primary business goals. That’s definitely a win-win solution.
Cons of staff augmentation
- Management hurdles
Integrating your remote and in-house teams is a tedious process requiring a little bit of time and effort. But when you cooperate with a skilled IT staffing agency, the integration process will be much easier. At DOIT Software, we know how to streamline the process of integration and make it plain for both our developers and your in-house team thanks to our 5 years of experience.
- Security risks
The augmented staff gets access to your confidential information, and it can lead to data leakage, etc. In order to keep your information safe, you need to sign an NDA and protect your business data. Even when you think that your employees don’t get access to confidential data, it’s better to solid-proof it with an NDA.
But NDAs aren’t the only thing to deal with. Make sure that agency you work with sticks to strong security policies, especially regarding server placements, data storage, etc.
- Communication issues
Language barriers and time differences can burden communication between your in-house team and remote developers. While outsourcing to Eastern Europe, you get a convenient location with overlapping business hours. At DOIT Software, our developers are English-speaking so you don’t need to worry about language barriers.
- Inefficient workflows
It’s quite hard to build efficient cooperation with your remote team, and especially when you don’t know how to streamline it. But we know how to streamline communication and work with our remote developers. While augmenting developers with DOIT Software, we’ll help you build efficient workflows.
IT staffing works with companies that have in-house teams. And when a company needs an additional specialist, it can take advantage of staff augmentation and get the required staff. Generally, the staff augmentation process flow consists of several steps, including:
AnalysisThe first step towards staff augmentation consists of business analysis and defining your outsourcing goals. It helps you understand which specialist you need to achieve your business goals on time and on budget.
Talent sourceTaking into consideration your requirements, the recruiters search and find developers, interview them, and provide the most appropriate candidates for you to review and approve. You can interview as many candidates as you want. By properly interviewing talent, you can ensure that they best fit your business requirements.
On-boardingWhile an IT staffing company takes care of all legal issues, you can onboard your new team member. This is the time to clearly define all roles and responsibilities. Otherwise, there can be lots of confusion. Don’t forget about Q&A sessions with your new employees.
Ongoing supportStaff augmentation companies never leave their employees. As a rule, there is an assigned HR manager or an account manager who works with augmented staff and helps build a productive and successful relationship.
Here are three scenarios you need to know about before jumping into the world of IT staff augmentation services.
Staff augmentation can be a great asset to your company and help you meet the demands of the business world easier and faster. But still, it cannot be a perfect solution for every scenario. Staff augmentation comes in handy for short-term projects. It’s a perfect solution for 3+ month to 12-month projects. So if your project is likely to last more than a year, it’s better to opt for another outsourcing model, for example, managed services.
Shortage of specialists
It’s a key point to consider. In most cases, it’s hard to find rare specialists within the local labor market. Or they may cost you an arm and a leg. So nowadays more and more companies are hiring remote workers to fill in the gap caused by a shortage of local specialists.
And when recruiting and hiring remote workers isn’t on your agenda, it’s better to utilize the services of a technology recruiting firm and augment your in-house team with a few developers.
Reduced project costs
When it comes to locals, their hourly rates are much higher compared to Eastern Europe and Ukraine. According to the staff augmentation model, the vendor takes care of administrative and management expenses, including office space, workstations, and training. And you have to pay a fixed fee depending on the number of employees you need for your project.
Staff augmentation allows for both saving time and money. While the vendor takes care of daily staff management tasks, you can focus on your primary business goals. That’s a win-win solution, isn’t it?
Staff augmentation vs other options
|Managed services||Staff augmentation||Independent contractors|
|Recruiting||No need||Your vendor||You|
|Office space||Your vendor||Your vendor||You|
|Payroll||Your vendor||Your vendor||You|
|Engagement||Full or part-time||Full-time||Full or part-time|
|Salary review||Your vendor||You||You|
|Rate review||You||Your vendor||You|
|Communication||Via vendor PM||Direct||Direct|
Staff augmentation or outsourcing
Staff augmentation is a powerful model that companies can leverage to increase flexibility and respond to the changing needs of the business world. And it can be used not only for IT needs but across other industries as well.
Besides staff augmentation, there are many other outsourcing models you can utilize for your business: managed services, independent contractors, dedicated teams, etc. Here’s a short table where we can compare the following outsourcing models.
Staff augmentation vs managed services
The most evident difference between staff augmentation and managed services is the degree of control that you give to the vendor. The staff augmentation implies only the provision of developer required for the project, and you can control everything else. And managed services come as a one-in-all solution. The vendor of managed services gets exclusive control over your project.
Thus, a managed service model presupposes a much greater degree of delegation, and it may be a great solution for companies that need to optimize their resources and focus on core business priorities.
Moreover, managed service providers have developers on board so you don’t need to wait while they hire someone. And it means that they can start your project right after signing a contract.
Staff augmentation vs independent contractors
If you hire a freelancer, you’ll be fully responsible for all the points mentioned in the table - payroll, management, communication. Have no time to cover all these points? Then choose the staff augmentation option.
But on the other hand, independent contractors don’t charge extra fees. They charge either for the amount of work done or for the number of working hours. Work with freelancers seems to be cheaper but not as time-efficient as when using staff augmentation services.
Ukraine tops the list of outsourcing destinations. Business Insider named Ukraine among the best places to outsource software development services. Let’s find out why you should consider Ukrainian outsourcing companies for technology staffing.
Large talent pool
Ukrainian IT market has significantly grown in recent years. According to the latest studies, it has increased by 2.5 times. That sounds impressive, doesn’t it?
The local IT talent pool has also grown by 27% in 2017 and is still growing. It’s said that there will be 200k+ IT specialists in Ukraine by the end of 2020. You’ll definitely find the developers you’re looking for.
Lots of skilled tech graduates
The IT industry has become extremely popular among Ukrainian young people. More and more people go in for informational technologies. Every year 36k+ students graduate from local universities and get degrees in IT-related spheres. And according to the World Economic Forum, Ukraine is in the top ten countries according to the number of tech graduates.
According to the IT Ukraine Association, each year Ukraine gets 20k+ tech graduates. Moreover, there are lots of educational opportunities for students who want to join the IT world. Local software development companies cooperate with regional IT clusters to regularly launch educational programs.
The rising number of tech companies
Along with the rise of the IT market in Ukraine, the number of software development companies reached 1650 in 2020. They offer a wide range of software development services, including mobile and web app development, UX/UI design, technology staffing, R&D services, staff augmentation consulting, QA, etc.
And did you know that a vast majority of Fortune 500 businesses outsource software development services to Ukraine? Microsoft, Samsung, Ring, and Oracle have already embraced the value of Ukrainian developers and even moved their R&D centers to Ukraine. And no wonder, since Ukraine has been ranked as a top destination for IT outsourcing several times.
Value for money
When you’re concerned about cost efficiency, outsourcing software development services to Ukraine is right up your alley. According to the Gartner research, Ukraine is the first in the CEE region for the best price/quality ratio. The average development rate varies from $35 to $50 per hour in Ukraine. Thus, you can get a top-notch mobile app for half of the price when compared to the US or UK.
Three things you need to know about staff augmentation
Staff augmentation has both advantages and disadvantages, but you need to know more about its peculiarities. Let’s take a look at three things that you definitely need to consider while cooperating with IT staffing companies:
Protect your intellectual property
You need to be sure that your intellectual property is safe. And that’s why you should sign an NDA (non-disclosure agreement) with your staff augmentation company. Keep in mind that your remote developers are a part of your remote team and your full-time employees. And being a full-time employee implies access to confidential data so it’s important to ensure that they don’t misuse it.
At DOIT Software, your security is our top priority. Prior to providing staff augmentation services, we’ll discuss everything and sign an agreement with NDA to keep all your confidential data safe and sound.
Your IT staffing company remains the official employer of your developers
Regardless of the fact that developers work for your company and become members of your in-house team, the outsourcing vendor is still their official employer. That’s why you need to discuss the areas of responsibility and agree on particular working terms, such as vacations, number of days off, etc.
You need to discuss and clarify all payment issues before signing the contract with your outsourcing company, Ideally, the outsourcing company should charge a flat monthly fee for every specialist it provides.
IT staffing becomes a new normal for companies all over the world. Nowadays you can extend your IT team with the top programming talent from any part of the world. With staff augmentation services, you can extend your team while eliminating hiring and onboarding.
IT staff augmentation services from DOIT Software can provide a critical skill set for your business or IT project. We’ll fill in the gaps in your IT team and provide additional support for your app development process. With our flexible tech staffing solutions, your in-house developers will get some extra minds and hands. Contact DOIT Software to power up your in-house team.
What does “staff augmentation” mean?
It’s a type of outsourcing by which the vendor of staff augmentation services provides required specialists to a client. There are a few models of IT staffing including traditional IT staffing agencies, master vendor staffing providers, specialized staffing, staff augmentation consulting, etc. But before jumping into the bandwagon of staff augmentation, you need to consider both staff augmentation benefits as well as drawbacks.
How does staff augmentation work?
Staff augmentation is the use of extra specialists on a temporary basis to power up an in-house team. Staff augmentation companies help you augment the capacity of your company by recruiting and hiring required specialists. There are lots of scenarios when IT staffing becomes especially useful, including a shortage of local specialists, short-term projects, etc.
Are staff augmentation and managed services the same or different?
The staff augmentation model differs from managed services in a few ways. The essential difference between the two models is that the provider of managed services (outsourcing) delivers an outcome (a mobile app) and the vendor of IT staffing services provides input (developers).
What is resource augmentation?
Resource augmentation is also known as staff augmentation. Companies hire specialists on a contract basis, based on the length and scope of the project.