What is staff augmentation?

Depending on the context, staff augmentation can be a hiring model as well as a service. A business can make use of the staff augmentation model by supplementing its core, essential staff with temporary personnel on a project-by-project basis. This is similar to how agriculture and retail make use of seasonal labor to increase capacity during peak seasons. However, there are two key differences that separate staff augmentation from seasonal labor.

First, most companies that make use of staff augmentation can’t predict when they’ll need more labor. They need more dynamic staffing solutions, which might consist of hiring freelancers or reaching out to a staffing agency. Second, the problem may not be a matter of scale, but skills.

It’s often the case that a team in the IT field lacks one or two key skills to complete a project. Staff augmentation allows you to hire someone with the necessary expertise for as long as you need them, rather than taking them on as an unnecessary permanent hire.

There are numerous ways to implement a staff augmentation model, but each retains the core advantages and disadvantages of the method. The choice can be fairly complex, particularly with regard to metrics like cost. While hiring a temporary staff member should be more expensive with regard to labor, it simplifies payment to their rate per hour. Additionally, temporarily paying this high rate can still be far cheaper than permanently hiring someone who will eventually become redundant. But this is only one of the nuances to take into account when you’re considering the pros and cons of staff augmentation.

When a business might need staff augmentation

Staff augmentation is the ideal solution for dealing with labor and skill shortages when outsourcing isn’t suitable. There are two main reasons outsourcing might not be the right choice: because it’s excessive, or because you need to retain control over a project. By using staff augmentation to overcome your limitations and complete a project, you’re able to keep matters in-house. In the end, you work beyond the normal capacity of your company without taking on the burdens of either permanent expansion or outsourcing. Staff augmentation and outsourcing are each increasingly popular in high-skilled, in-demand fields such as IT.

Pros and cons of staff augmentation

Staff augmentation isn’t a replacement for permanent, internal staffing , but it’s not meant to be. Rather, it’s a valuable tool to increase the productive capacity of an organization and overcome short-term limitations you might face. Understanding the pros and cons will help you assess whether or not staff aug is the right choice.

Pros of staff augmentation

The greatest advantage of staff augmentation is flexibility, which manifests in many ways. For one, embracing staff augmentation gives your business the ability to rapidly scale upward or downward. If a dearth of work or economic hardship forces you to reduce the scale of operations, you can keep your core teams intact. When new projects outstrip your present capacity or demand that you onboard personnel with specific skills, staff augmentation makes talent readily accessible.

While staff augmentation might be more expensive in the short term, it does entail some savings. You avoid expenses such as benefits and payroll . More importantly, you won’t need to continue paying for someone’s services when their skills are no longer needed. This is where the greatest savings potential for staff augmentation lies: eliminating redundant labor expenses.

By augmenting the core staff of your company, you’ll be able to enjoy the benefits of lean internal staffing . Staff aug does consume a portion of the resources that lean staffing saves, but it largely eliminates the risk of being understaffed while bringing additional benefits to the table. Today’s economy rewards dynamic, agile operations, and this is where staff augmentation fits. In short, some key benefits of staff augmentation are:

• Flexibility
• Overhead cost savings
• Potential
• Access needed talent on a per-project basis
• Increase and decrease staffing on-demand
• Minimize risk while experimenting with higher output

Cons of staff augmentation

Staff augmentation is the ideal method for businesses to react rapidly and dynamically to their staffing needs. However, problems can arise if a company becomes excessively dependent upon staff augmentation and doesn’t foster sufficient internal talent. As the number of temporary staff members grows and these people remain onboard longer, you lose your relative advantages compared to taking on permanent staff members.

But even if you apply augmentation properly, there are still some drawbacks. For one, temporary hires are more likely to leave partway through a long project, since their position is explicitly temporary. The way that you implement staff augmentation will also have its own issues. There are several options, and having a staffing agency provide your talent is both the easiest and the most expensive. Besides increased cost, this also carries the downside of making your company more dependent on outside organizations. This isn’t necessarily a big problem, but it does mean you need to be discerning about any agency you work with.

The alternative to working with a staffing agency is seeking out contractors and freelancers via job postings, gig websites, etc. While this saves your company money, it increases the administrative burden of developing parallel hiring processes. The key potential problems that come with staff augmentation are:

• Increased dependency on a third-party organization
• Potential turnover risks in long-term projects
• New processes will be necessary to accommodate non-direct hires, especially if working without an agency
• Projects demand both internal and external resources
• Higher rates if working with an agency

The right staff augmentation model for your business

There are two basic methods for implementing staff augmentation in a business. The first method consists of paying a third-party organization to provide the talent for your company, while the second method entails contracting independent workers. Each method has its own advantages and proper use cases, although working with an agency is more expensive. This added expense is the cost of the convenience, efficiency and consistency that agencies bring to the table. From the small business level up to enterprise operations, there’s something to be said for both models of staff augmentation.

Staffing agencies

The main advantage of working with staffing agencies is that they simplify the process of taking on temporary hires. Since their business model relies upon providing labor as a service, agencies have a vested interest in making sure they provide skilled, reliable people. Agencies may perform skills testing and background checks and provide perks such as health benefits that make turnover less likely.

Staffing agencies will also handle the paperwork and administrative details. This includes payroll, employment taxes and liability. In short, you enjoy all the benefits of accessing the talent you need while paying a flat rate to the agency. An agency will often be the right choice for your staff aug needs, but it ultimately depends on what you think of their cost/value proposition. If the money it charges is worth convenience, outsourced administration and the promise of high scalability, then hire through an agency.

Hiring independent contractors

Your company can maximize its control over staff augmentation by working directly with temporary workers. By hiring on a contract or gig basis, you can avoid the need to pay benefits and access the labor you need for as long as you need it. While this requires your company to create a parallel hiring system, this custom-built funnel might fulfill your needs more effectively than an agency. It’s also easier than ever to find workers like this. Your business might generate leads by posting ads on Indeed or posting jobs on a freelance website such as Upwork.

Working directly with freelancers always has the benefit of costing less. However, the question is whether or not your savings are worth the administrative burden. This varies on a case-by-case basis, depending on the type and quantity of labor your company needs.

Staff augmentation FAQs

What is the difference between staff augmentation and managed services?

Hiring staff augmentation services provides your business access to additional personnel on a rate-per-hour basis. These personnel operate under your control, within your teams. On the other hand, managed services are independent teams that can complete projects on their own. Managed services are a type of outsourcing.

What is the difference between staff augmentation and outsourcing?

When your business hires staff augmentation services, it’s paying for the labor of a temporary staff member. You remain in control of day-to-day execution, whereas outsourcing entails paying a different organization to execute a task independently. You might describe the two models as insourcing and outsourcing.

What does resource augmentation mean?

Resource augmentation means obtaining temporary resources to supplement your internal, permanent resources. This generally refers to hiring and in that regard is exactly the same as staff augmentation. The term resource augmentation may be used in a broader sense than staff augmentation, which is the only difference between the two options.