Staff augmentation is a popular strategy used by organizations to increase their capacity by using external personnel on a temporary basis. This approach involves leveraging a range of staffing solutions, including freelancing and the global staffing industry, to source the required talent. While staff augmentation comes with its own set of pros and cons, choosing the right model is essential to achieve the desired outcomes.
Types of Staff Augmentation:
There are different types of its models, including onshore, nearshore, and offshore. Onshore it involves hiring talent within the same country, while nearshore involves hiring talent from nearby countries. Offshore it involves hiring talent from a different country altogether. Each model has its own set of advantages and disadvantages, and organizations must choose the model that aligns best with their business goals.
Risks of Staff Augmentation:
While staff augmentation can be an effective strategy, it also carries certain risks. For example, hiring augmented staff can lead to cultural clashes and communication breakdowns. There may also be issues with language barriers, time zone differences, and lack of alignment on project goals. To mitigate these risks, organizations must establish clear communication channels, provide adequate training and support, and set expectations for performance and deliverables.
Choosing the Right Provider:
Choosing the right staff augmentation provider is critical to the success of the project. Organizations must evaluate providers based on several factors, including their experience and expertise, their track record of success, and their ability to provide the necessary resources and support. It’s also important to establish a clear scope of work, define project goals and timelines, and ensure that the provider is aligned with the organization’s culture and values.
Considerations for Choosing a Staff Augmentation Model
One of the critical considerations when opting for staff augmentation is project length. This approach is ideal for shorter-term projects that can be completed within a few months. For more extended projects that require several months or years to complete, an outsourcing arrangement is more appropriate than a staff augmentation model. However, it providers are often willing to negotiate agreements for longer-term projects.
Another consideration when choosing it is secrecy. If a project involves confidential intellectual property, organizations must evaluate its solutions carefully. Though the rationale for this decision is often due to psychological comfort rather than hard evidence, it’s crucial to proceed with caution when hiring augmented staff for top-secret projects.
Ramp-up time is another factor that organizations must consider when choosing it. Misunderstandings about context can lead to unsatisfactory processes and losses in augmented staff costs. For instance, a major semiconductor company lost almost 50% in costs due to the high level of complexity required for the job. Half of the augmented staff’s contract time was spent ramping up due to a lack of understanding of the project’s context.
Misunderstandings About Staff Augmentation
There are also several misunderstandings about staff augmentation that organizations must be aware of. One of the most common is the belief that staff augmentation is a cost-avoidance strategy. This misunderstanding arises from the assumption that hiring augmented staff allows organizations to circumvent the cost of paying benefits for full-time employees. However, staffing providers pay benefit costs that are factored into the rate quoted to the organization, leading to more significant out-of-pocket expenses.
Another common misunderstanding is that staff augmentation is more expensive than hiring full-time employees. This misconception results from a misperception that augmented staff cost more than their equivalent full-time employees. However, keeping a full-time employee comes with an annual salary and other costs, including benefits like health insurance, 401K, and ongoing training. The financial benefit of contracting with augmented staff is quite reasonable and cost-effective when compared to the cost of keeping full-time employees.
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Differentiating Staff Augmentation from Managed Services
It’s crucial to differentiate between staff augmentation and managed services. While staff augmentation is a job description paid on a time and material basis, managed services are paid upon completion of a project and based on a definitive deliverable, possibly with a definitive quality rating It’s being used increasingly across industry borders and for roles ranging from R&D to Operations, HR, Finance, and more.
When choosing a staff augmentation model, it’s essential to consider several factors, including project length, secrecy, and ramp-up time. Organizations must also be aware of misunderstandings about staff augmentation, such as the belief that it’s a cost-avoidance strategy or that it’s more expensive than hiring full-time employees. By choosing the right staff augmentation model and provider, organizations can achieve their desired outcomes and increase their agility in responding to the changing needs of the enterprise.
