Staff augmentation is a smart hiring model that businesses can use to maximize their productivity and efficiency. Global trends show more and more businesses hiring contingent workers to help with managing and executing projects. Although it's not a new concept, many organizations still find it difficult to implement the right staff augmentation model suitable for their needs.
In this article, we define staff augmentation, explain why companies use staff augmentation, and walk you through the benefits and downsides of this model. Finally, we examine under what circumstances you should consider leveraging staff augmentation and how to prepare for it.
If you are looking for ways to maximize your output and attract global resources within a limited budget, staff augmentation could be your best bet. Let's start by defining the concept.
In simplest terms, staff augmentation is a process of hiring outside resources temporarily to augment the organization's output capacity. No business should ever stretch their in-house resources too thin. It affects performance quality and impacts the well-being of the in-house team.
The staff augmentation model offers an excellent solution to this. You can hire resources for a particular project or a specialized job. It allows you to hire highly-skilled workers from across the globe whom you wouldn't be able to afford to hire as full-time employees. The model offers agility and enables you to respond quickly to the ever-changing needs of your business.
Staff augmentation is a part of human resource planning, and is usually done in one of two ways. You can make use of staff augmentation services that will offer you full support during the entire process. Flexible team augmentation services take care of the hiring and training process of the individual workers. If you decide to go this route, you will acquire fully trained, talented workers who have already demonstrated their knowledge and skills via the outsourcing service.
The other way to go about it is by hiring freelance workers. This method has also gained momentum in recent years as more and more talented individuals are taking an interest in the freelance business. The latest report released by Statista predicts that by 2027, more than half of the US workforce will be engaged in the gig economy. This is good news since it means that there is a large pool of qualified candidates, but sifting through them can be difficult.
Recent research by Manpower Group shows that 69% of companies in the US experience skill shortages. Staff augmentation can be an extremely useful strategy to solve this issue. In today's global world, businesses need not be limited by geographical boundaries. With staff augmentation services, you can hire personnel virtually from any corner of the world.
It is often difficult to find and retain experienced developers. Also, sometimes businesses need specialized skills for a specific project. Staff augmentation can be an excellent choice in such scenarios. An organization can tap the global talent pool and hire highly-skilled, competent engineers or tech professionals for a particular project, without having to hire full-time employees.
The staff augmentation business model is most frequently implemented in the IT workforce. Companies often hire external tech talent or remote development teams to mitigate gaps in technical expertise within the local team. However, alternative labor is extending beyond IT roles and is now commonly used for HR, sales, marketing, and customer service functions.
This outsourcing model brings many potential benefits to the table. However, like any other business process, it has certain limitations and downsides. Once you know both the advantages and disadvantages, it will be easier for you to determine when and how to adopt this hiring model for your company.
Staff augmentation lessens hiring hassles and saves you time in the onboarding process. If you utilize augmentation services, you do not need to spend time and resources to find and interview candidates. You get immediate access to highly-skilled workers who have the required knowledge and experience. Simply communicate your specific needs to the staff augmentation firm, and they will do the rest. The servicer can use their database to choose the portfolios that suit your need best, saving time and resources.
You gain scalability with the ability to add human resources quickly and efficiently. Similarly, when you do not need them anymore, you can move on without disrupting your existing in-house team. Increasing your variable workforce can actually help you to avoid layoffs in the future, as you will be better able to adapt to the inevitable ebb and flow of your business.
It allows you to hire team members with specific skill sets required for a particular project. A project may come on your way that requires particular skills that your existing team lacks. It may also be the case that a project manager decides you will not need this skill set outside of this project.
You can use the staff augmentation strategy for a trial run. You can hire an augmented staff member on a short-term basis and test their ability before bringing them into your company's full-time payroll. If their skills don't match your requirements, you won't need to take the hit.
Augmented staff lacks knowledge particular to the organization, as well as your company culture. If a project requires contextualization and institutional knowledge, the resource augmentation model may not be the best choice. The necessary training could lengthen the process and add to your total project cost.
Team augmentation may not be a good idea for long-term projects. It also doesn't work well for the skill sets you need on an ongoing basis. While it can be a money-saving model to hire augmented employees in the short term, it isn't cost-effective to replace your permanent staff members.
Any staff augmentation project will result in added processes for a business. Oversight and team management will be necessary for any new additions, including temporary ones.
Team augmentation is a critical decision for any organization. Bad timing or lack of strategy can do more harm than good. Before delving into when and where to implement staff augmentation, first let us look at the different types of staff augmentation.
Consider choosing this type of staff augmentation when you need reliable employees to complete the work, but the staff does not need to have any special skills. This could include manual labor, warehouse work, delivery, etc. Seasonal businesses often need this type of augmentation to handle spikes in demand.
You need to implement skill-based augmentation when there is a gap in skill availability. Clerical jobs, data entry, transcription, etc. fall into this category. These workers need not be highly skilled but must have certain expertise in their field. When you do not need ongoing support, augmentation is the best option. Utilize a staff augmentation company to find such skilled workers, or consider using online gig platforms.
This is where augmentation plays the most critical role. Software developers, skilled technical writers, designers, and legal advisers fall into this category. They can support your dedicated team to achieve your business objectives. They can provide support to your in-house team occasionally as and when needed. Staff augmentation services play a crucial role in this type of augmentation. They build their talent pool intentionally, so they can offer access to the experienced, highly-skilled resources you need.
The next question is: when should an organization consider staff augmentation? Here are three particular scenarios when staff augmentation works best:
As mentioned earlier, staff augmentation is a very useful strategy when your organization requires a specialized skill, like brand design or software development. Implementing a staff augmentation model will expedite the recruitment process. You can make use of their knowledge and experience without hiring them full-time.
From time to time, your organization may need to increase its capacity to avoid project delays. Staff augmentation can come in handy in such unusual situations. You know that you do not need all these resources in the long run, so you hire contingent workers to get the job done within the set deadline.
The traditional recruiting process is lengthy. In the meantime, you can continue your operation with an augmented team. This is particularly helpful when you are expanding your business or introducing a new line of products or services.
Proper resource planning is the key to the successful implementation of staff augmentation. Staff augmentation is almost always impossible if you have not carefully considered and planned your resource allocation. Here are a few steps that you should consider before deciding to go this route:
Project managers must analyze what resources they have and their current utilization. Without a thorough analysis, they would never know where gaps need to be filled with external talent and skillsets. This will help managers to understand what strategy they should take to prevent resource risk.
Capacity planning is another crucial step that organizations must take before team augmentation. Consider the confirmed workload for ongoing and upcoming projects, and compare it to the capacity of your dedicated team. This will help you identify whether you need to increase the capacity to meet the project goals.
Look at team utilization rates and predict the resource demand. Analyze which projects have the highest utilization rates to determine the demand. You cannot move forward with your staff augmentation plan without understanding the resource demand.
Resource management tools like Runn can help you with all the above steps. The software helps you create resource breakdown structures and resource calendars. These tools are designed to offer you a clearer picture and assist in analyzing resource availability and improving capacity planning. They also help you understand the current utilization rate and future resource demand. When you have all this data ready, you will know which skills are required and when you need to augment your team.
While staff augmentation is a powerful tool for hiring external resources, some other models are also available. Depending on your situation and need, they may be more suitable than staff augmentation. Two such options for hiring contingent workers are managed services and consultation. Let's see how they compare to staff augmentation to understand the concepts better.
Like staff augmentation, a managed service approach is also an outsourcing strategy, but the concept is different. These two terms are often confused with one another, but they are two distinct approaches.
In the former, you outsource specific tasks and functions, either directly or through a staff augmentation provider. For example, an IT company may hire a couple of software engineers on a short-term basis to provide support to the in-house development team.
With managed service, the entire problem is outsourced to an external vendor. It allows you to focus on your core business. This model is more suitable for long-term requirements where you need sustainable support. A managed service can be infrastructure management, IT support, or other services.
Another model that is often muddled with staff augmentation is consulting services. A consultant is highly-skilled and experienced personnel who can offer strategic guidance. You hire them to fill gaps in your permanent team. Consultation can also be done by a company.
Consultation services often help to find solutions to specific problems and help you address current business goals. For example, in a software development company, the in-house developers may need expert guidance to plan, design, and execute a project. A consultant may spend significant time collaborating with different stakeholders to find the right solution aligned to the overall business goal. They oversee the development workflow and intervene whenever necessary. Consultation often works best when implemented on a project basis.
Staff augmentation allows organizations to boost the capacity of an in-house team. It helps them fill skill gaps without hiring full-time employees. This model is best suited for short-term requirements.
Before deciding on when and how to implement this outsourcing strategy, organizations should assess their resource needs, to identify the areas of key concern where staff augmentation would have the greatest impact.
Capacity management is a delicate balancing act that has a very real impact on a businesses bottom line. Learn how to do it right in our ultimate guide.