The labor market in the technology sector is constantly in the increasing thirst for talent. Hence, it is not surprising that many organizations were also directly struck by this critical shortage and this is even seen as the Achilles heel of some giants like Amazon, Microsoft and Google. So, what’s the solution? How can your company not get caught up in the escalation of talent needs in the HR system? And how to immediately have the right personnel to deploy projects quickly and smoothly? One of the trending solutions these days to fill the talent gap is the dramatic increase in the use of contingent workers, i.e. hiring experienced personnel for both permanent or temporary hard-to-fill positions. This IT staff augmentation is one of the popular software development outsourcing models that can help you quickly access great talent resources while optimizing development costs effectively.
Statista highlights that staff augmentation services raised from 5.2% to 6.3% in 2018-2020. These figures indicate that increasingly more global corporations choose staff augmentation so as to discover professionals with the applicable technical abilities and meet their staffing needs. But what is IT staff augmentation model about and why should you go for it? Let’s dive deeper into many aspects of it, there will be answers!
Table of Contents
IT staffing is the practice of staffing replenishment to fill urgent talent gaps, temporarily or permanently, with IT specialists provided by a third-party. The augmented members will be chosen based on your detailed requirements and in compliance with current business objectives.
With advanced service providers, IT staffing give you access to expert technology resources with optimal expenses. The responsibilities of hiring full-time employees are also eliminated. This helps save plenty of time and budget!
Your IT partners will offer highly qualified employees including software developers, project managers, system administrators, business analysts, UX/UI designers, etc. And you have full control over which professionals to join your team.
Types of IT Staff Augmentation
In terms of time, this model will be divided into short-term/long-term collaboration or temporary/permanent. The short-term collaboration will be appropriate for projects in the sprint period; internal experts on vacation or sick leave, etc. On the contrary, long-term collaboration is an effective choice for longer, more complex projects. This choice is often to supplement lacked stack skills necessary for the project; to cut operational expenses; and to shorten an excessively prolonged internal recruitment process.
In addition, regarding the staff augmentation, there will be also three categories:
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Commodity |
When you want dependable people to carry out responsibilities that do not require a particular skill set. This type is usually suitable for companies that are looking for manual labor, warehouse work or factory, etc. |
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Skill-based |
When you require certain skills but the relative level of skill is not critical such as data processing, copywriting, transcription, etc. |
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Highly-skilled |
Talents with extra superior abilities are the ones you are looking for. Their experiences and expertise have been accumulated for years at a very high level. For instance software engineering, international law, etc. |
It can be seen that, for the characteristics of the IT industry, high-quality and outstanding personnel is always a pinnacle priority. Therefore, it is easy to understand why most companies seem to struggle to fulfill the on-demand need of talents.
According to Statista, the IT industry had the fourth longest time to hire of all industries in 2018. It took 42 days on average to fill an IT position. So, hiring an in-house engineer definitely takes a long time and seems to be a headache for many companies.
Even worse with the epidemic, attracting and waiting for talent to join the project is really a “nightmare”. Hence a wide range of companies solve this problem by opting for IT staff augmentation around the globe. If you are facing the same problem then you know what to choose!
According to a CBI/TCS report, only in the UK market, £63 billion is gone within a year as IT companies can not find genuine specialists with the right expertise despite the IT job is booming. And certainly this situation is not limited to the UK.
The shortage of local talent is always a bottleneck that makes it difficult for companies to expand their in-house teams. Those who need to add missing tech stack skills to continuously implement development projects face the same problems. So, turning to the IT Staff Augmentation services will be an efficient way to quickly enhance your team’s capabilities.
Obviously, to build a group of talented programmers for your team is difficult in terms of both time and budget. Why? Because the price for you to own rare gems is not cheap. If you have a constrained budget, then IT Staff Augmentation should definitely be on your planning list.
If you get your feet wet with IT staff augmentation, you may miss some of its compelling benefits. This model is readily accepted as an alternative model of staffing globally and undeniably boost business growth, multifaceted business strategy to curb any talent shortage. So efficiency, convenience and profitability are some of IT staff augmentation’s key benefits. But it doesn’t stop there, listed below are convincing arguments for using this model!
Development projects never have the concept of a stop, needless to say, it evolves rapidly with many unpredictable market conditions. That is why IT managers must always face the hunting for talent in the hustle and bustle. Finding and on-boarding in-house staff can be very time-consuming. This means that a delay in adding someone with specific skills can lead to a delay in the project’s deliverables. So, in cases you need to urgently recruit more staff urgently and expand the team, you should consider the IT staff augmentation model. Partner companies will almost immediately transfer you the best talents. This model significantly cuts down the time you would have spent hiring and managing these talents yourself. Moreover, most of the legal work will be done in advance too.
Hiring a new specialist is expensive, replacing specialists is even more expensive. Hence this opposite problem can also be solved by staff augmentation – overstaffing, in other words, downsizing the team. As soon as the project is completed, you can reduce the list of talent you are managing or replace the developers without much hassle. Meanwhile, if you hire an in-house developer on a contract, you’ll still be obligated to pay even if there are no tasks left in the work backlog.
If you are looking for candidates with superior and uncommon abilities, the enlistment process can take months and also consume a lot of your budget. But this is not the case when it comes to the IT staff augmentation model, IT recruitment problems can be greatly overcome, in which the ability to reach tech stars is only counted by days or weeks. More importantly, you will have direct access to an extensive pool of talents since your partner will immediately provide you a wide range CVs of available experienced developers based on your on-demand.
The competition for tech talent is fiercer than ever, this leading to the challenge that emerges after that is even trickier: How to retain them? This would be the case if you were building your own internal team and in stark contrast to the employee expansion model, where employee retention tactics seem unnecessary. Why? That’s because your potential development partner will take on all of these responsibilities. They will handle all issues and make sure that the committed developers follow your project until the end, any personnel disturbance will not happen unless there is any other request from your side.
Furthermore, this workforce basically will be just like your in-house employees and you have full control, but related legal issues or compensation or benefits will not be your problem at all. Just simplify it as owning a supercar but you will not have to worry about upgrades or maintenance or anything else, your job is just to control that car towards the predetermined goals.
An indisputable advantage of the IT staff augmentation service model is the elimination of hidden costs, both direct and indirect. Specifically, instead of investing resources in facilities, convenient offices, recruitment or HR services, etc. now with IT staff augmentation, you will enhance your ability to focus and increase resources for building your apps, technology products and focusing on growing your business ahead of the competition.
If the above is not convincing enough, let’s assume that you are hiring two developers at the same time: one for your internal team and one employee in the IT staff augmentation model. With your own in-house personnel, it will include costs that you must always ensure such as infrastructure, basic salary and other benefits policies. But with an augmented developer you only pay for development hours, the augmented service provider takes care of the rest.
In addition, there will be marked differences in software development rates in each region, the selection of enhanced service providers abroad, especially the largest IT outsourcing hubs in Asia like China, India, Vietnam,… will bring significant cost savings. Let’s take Vietnam as an example, this destination has been regularly ranked among the top software outsourcing destinations globally and the average offshore software development costs are ranging from $20-50. Not only that, Vietnamese developers are always appreciated for their excellent expertise and experience. In fact markets like the US, Western Europe, the UAE etc., are characterized by normally offering high software development rates, since these regions are elaborated economies, high working standards and high life quality, resulting in development costs here range from $50 up to $150 per hour for one developer.
The general aspect of all outsourcing models in the technology industry is to optimize the company’s revenue and costs, increase the efficiency of resources and promote the development of projects. However, each approach will be much more likely to depend on your business growth, goals and many other objective factors.
With project outsourcing, your partner will have different offers and manage the entire project. Therefore, this model calls for little client involvement. This means that you will transfer certain functions and the entire development process to a subcontractor. For example, your company wants to create a finance related application from scratch but the development department has their hands full. You’ll then have the option of outsourcing this project to a trustful software development partner. Hence, this model might be a good fit for your enterprise if
Meanwhile, for IT Staff Augmentation, all stages or progress of the project will be absolutely controlled through you. Augmented developers work directly with you and essentially the identical members to your crew. Therefore, it can be understood that the IT Staff Augmentation model is the integration of external experts into your company.
Before comparing staff augmentation (aka team expansion) with dedicated team models, we need to discover the difference between a dedicated team and project outsourcing first. That’s because when businesses opt for a dedicated team model they, just like in project outsourcing, hand over an entire project to the team of professional software developers.
The main difference between project outsourcing and dedicated team models is that a dedicated team works only for one customer whereas a project outsourcing team can share several projects. A partnership between a customer and a dedicated team usually lasts much longer than in project outsourcing. Often, a dedicated team becomes an extension of an in-house customer’s team – it establishes close communication and working relationships with an in-house team and understands well the inner business processes in the company.
A dedicated team and staff augmentation may seem similar, though there are some significant differences:
Opt for a dedicated team if:
Conclusion:
When companies consider building a new SaaS product or just need some extra help for their current project, they often opt for a staff augmentation model. It allows them to boost the capacity of an in-house team and reduce operational expenses in the company. Meanwhile, some companies use this outsourcing model to build their business strategies or utilize it as a source of unlimited top software development talent for their projects. In any case, the staff augmentation model offers companies a wide range of opportunities to improve their projects and in-house team productivity.
We, at fram^, hope that this article was useful for you and you’ve found some great ideas on how to enhance your business processes with a staff augmentation model.
