There are several reasons for staff augmentation, the company development strategy which is so popular nowadays. What is it all about? The rapid development of the present-day business environment demands effective ways of boosting cost-effectiveness and producing the most qualitative implementation of new ideas and receiving new attractive products and services.
As for staff augmentation, it belongs to the most popular outsourcing strategy meant to what kind of extra staff is needed for the project if any and find the most appropriate personnel for it within a short time and with the least reputational and quality risks.
There are various ways for a dedicated team extension, and this article revolves around some practical cases describing the newest and the most widely used ones.
Strategic Models of IT Staff Augmentation and Their Effects on a Company
With the advance of technology, the IT field of industry is the most deeply involved in the process of hiring additional employees due to temporary needs. Many IT staff augmentation companies have appeared by now to help entrepreneurs deal with HR challenges and risks.
The technology implies evaluating the staff already working for the company according to their experience, skills, expertise, and talents, and defining which additional skills are required for a certain project. This is caused by repeated situations within the company when all the in-house staff is working overtime with the existing tasks while the new projects are waiting for their turn for a long time, even until they lose their importance. That is why IT staff augmentation is used to avoid such challenges and discrepancies. If a company manages to identify its skill gaps on time, it will become more successful in the implementation of even the most complicated projects.
There are two staff augmentation types and strategies - short-term and long-term ones. The short-term type is used during the high season, vacations, and sick-leaves of the in-house personnel. The long-term strategy is meant to fill the skill gap, to cope with some deadlines or other challenges when the time for hiring is rather long as well as a practical means to cut operational costs. The latter is more applicable for large and prolonged projects.
IT staff augmentation services involve outsourcing programmers, system administrators, testers, designers, and many other required specialists who have the necessary technical skills and equipment to complete some specific tasks. The benefits for the company are quite obvious: it can perform more tasks combining efforts of their permanent in-house staff and their offshore colleagues.
Situations When Staff Augmentation Is Recommended
The possible situations when the company needs staff augmentation may include:
1. You've got a new project but all the members of your team are already working overtime. The involvement of temporary workers is vitally important to ensure the quality of your customer service.
2. Your skilled and experienced employee has to be absent for a long time because of illness, recovery, maternity, family or any other issues. Therefore, you need to fill this gap with a temporary worker having the same skills.
3. Your new project requires skills that are not possessed by any of your present-day employees.
4. The company has some recruiting issues being unable to hire workers with the needed skills.
5. You want to test the outcomes of your possible house staff extension.
In short, whatever the company's needs may be, augmented staffing is helpful only when your management system operates efficiently in both long-term and short-term perspectives.
As for the fields where augmentation is used, there are no limits because any rapidly developing company that wants to catch up with the needs of the market can utilize this technology. However, among the fields where such a model is most often utilized, the IT and software engineering are winners.
Outcomes of IT Augmentation Technology
Let's regard some beneficial outcomes of this technology for the company's budget, strategy development, employees' work satisfaction, and organizational structure.
Reduction of Recruitment Time. The experienced HR officers know well how hard it is sometimes to find a specialist with rare skills for permanent in-house employment. Spending months for recruitment cause severe losses for the company. So augmentation helps to hire such a specialist from any corner of the globe immediately.
Feeling Free From Paperwork and Legal Procedures. If you use staff augmentation consulting services, the provider will deal with all the documentation and processes like signing contracts, accounting, or payroll. You won't be distracted from the essential matters within your company.
Reduction of In-House Employment Cost. As a rule, the augmented staff is hired in the regions where salary rates are much lower than in the location of the company. This way, you can reduce your salary payment expenses.
Flexibility. Using this strategy, the company can hire workers exactly when they are needed. No significant amounts of time and effort are required.
Cutting Operational Costs. Hiring outsourced or freelance workers from other countries means that there is no need for additional expenses for office rental, furniture, or equipment.
Three Modern Models of IT Staff Augmentation
To effectively utilize the potentials of IT staff augmentation, let's consider its 3 new models that have appeared recently. They are offshoring, nearshoring, and onshoring. Each of them has its pros and cons as well as some specific characteristics that distinguish them from others.
Offshoring
It means that the operating activities of a company are transferred to another country without any fear of its geographical position. The employee or company is hired to carry out some duties, activities, or operations for a lower cost which is relevant to the country of their location.
The model is very often confused with outsourcing. The later means contracting the company's processes to another organization or person that has knowledge in a certain area, but not necessarily is located in another country. However, offshoring outsourcing can also be used to reduce costs or downsize the workforce.
The main advantages of offshoring are obvious:
- lower prices;
- the specialization which may be unavailable in your country;
- flexibility in specialist choice and payment.
However, it also has its disadvantages:
- communication issues related to the language or lifestyles;
- social barriers and lack of knowledge in intercultural communication;
- time zone differences;
- lack of safety measures and strict protocols;
- differences in the cost of electricity and other utilities.
Nearshoring
This term means outsourcing business processes and tasks to specialists from nearby countries. Sometimes, these countries have a common borderline. For example, the company from Germany would prefer Poland or the Czech Republic for this purpose. This model allows maximizing business efficiency, though it also has its cons.
The main advantages of hiring nearshore development team are:
- the same time zone;
- no cultural differences or only small ones;
- proximity which allows face-to-face meetings if needed.
Among the disadvantages, consider the following:
- higher costs than offshoring;
- cultural nuances (such as holidays);
- fewer options on the market for the skills you need.
Onshoring
This model means relocation of business tasks and processes, but lower-cost options are sought within the company's country. A good example of it can be a freelance employee who works somewhere nearby. Or this may be an online worker or company from the provincial town or countryside, so the cost of the service is sure to be lower.
The most important advantage here is efficient coordination and communication. The disadvantages may include the lack of options for the needed skills and poor quality of service which is difficult to predict and control.
These three models of IT staff augmentation can be very efficient, though sometimes the need emerges for the opposite process which is called re-shoring. It is the model of returning certain business processes to the country of their origins. The re-shoring definition also deals with returning manufacturing of goods to the original country to strengthen the workforce and unemployment reduction.
Very often, this model has certain financial benefits, such as cheaper labor or lower production expenses, and it is positive for the country of relocation. However, this option may not have benefits for the company involved.
In conclusion, there is no exact answer on which model of staff augmentation to opt for since all of them have their pros and cons. The choice depends on the real needs of the company and the efficiency of its strategic planning.
