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Introduction

In one of our previous articles, we covered all the key aspects of hiring a dedicated development team in 2021. But what if you don’t need an entire team to cover all your software development needs? In that event, you should probably look for IT staff augmentation services available in your region and offshore.

What is IT staff augmentation?

By definition, staff augmentation is a strategy for companies to complete their internal teams with external experts on a permanent, short-term, or long-term basis. In software development, staff augmentation allows organizations to find the right, highly qualified experts and easily adjust the size of the team according to their business needs. There are many vendors offering IT staffing solutions on a contractual basis today. This guide will help you navigate among them and find the best fit for your company.

How does staff augmentation work?

If you want to extend your team, you need to identify the required expertise and skill set, the desired number of developers, and the time you will need to boost your team. Only when these aspects are clarified will the vendor pick candidates for your project. Vendors usually have a database of tech experts and can search for additional specialists on the market if needed. After the resume screening is complete, you will be able to schedule interviews with candidates and send them test tasks. Once the test and the interview are concluded successfully, the IT staff augmentation company will present the candidates with job offers. You will most likely have your own hiring procedures and standards, so the vendor will make the necessary adjustments to each individual. Considering the most common variables, the hiring process may take from 10 to 21 days.

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Why is this strategy so popular today?

Probably the biggest reason why IT staff augmentation has become a buzzword is because this approach enables companies to accelerate hiring and offers the flexibility of easily augmenting or downsizing teams. Other factors that drive companies to expand teams via outsourcing include the following:

  • The high cost of hiring and training in-house experts
  • The time and effort required to find new experts
  • Rising staff turnover rate
  • Unwillingness to compromise the quality of the project on account of budget

According to Clutch.co, these are the main reasons for companies using staff augmentation:

Reasons to use outsourcing

The key benefits of the staff augmentation model

Flexibility boost

As mentioned previously, flexibility is among the top reasons for outsourcing in general and for staff augmentation in particular. This flexibility arises from the ease of replacing any team member in a relatively short time compared to the replacement of in-house employees. IT staffing firms take over the recruitment and HR hassles, letting you focus on changing the direction and the scope of the project faster.

Gaining more cost-efficiency

Hiring experts to complete your team is transparent in terms of the cost structure of payments. Since you don’t pay for any organizational or administrative expenses but only the salaries and fees of the vendors, you will be able to plan and spend your budget most effectively.

Access to a global pool of talent

Absence of the required talent on the local market or salaries unaffordable within your budget will no longer be a constraint for you. Nowadays, staff augmentation services are available across the world, providing you with an unlimited number of options at reasonable cost. In the post-pandemic world, most organizations have already switched to remote collaboration of some kind, and outsourcing is more relevant than ever. According to Grand View Research, the outsourcing industry will be valued at $405.6 billion by 2027. In 2021 alone, according to Statista, business process outsourcing in the United States of America will generate up to $113 billion in revenue. So, with the growth of the outsourcing industry, the talent pool of qualified professionals will eventually become even richer.

When is IT staff augmentation the best fit for your organization?

Quick team extension for developing another part of the product

Let’s say you already have a team of in-house experts developing a product, but you want to add more experts to build an entirely new part of the product; 4–6 team members will be perfect to complete the task, but the local market has a shortage of specialists. You can’t hire additional developers due to the lack of proper expertise among the available talent or because the salaries would exceed your budget. Recruitment and administrative activities may take too long, considering your deadlines, or, in the case of strong market demand for specific developer skills, local recruitment may take even longer.

Boosting the team working on the current goal

You are currently developing an innovative tech product with a team of qualified professionals. Since the direction of your product, technology-wise, can be considered nascent, you simply don’t have enough suitable developers in your country. So, you have no choice but to look for talent in other locations around the globe. Thus, offshore IT staffing may be the only viable option in this scenario.

When working with an outsourcing company doesn’t suit you, and you need greater communication with your team members

You have already set up a collaboration with an outsourcing company, but during the process you discovered that you are not happy with the way it works, for various reasons. Moreover, you feel that the lack of direct daily communication with your development team will hurt the overall quality of the product. What’s even more relevant is the fact that you are not sure that remote programmers entirely feel like a full-fledged part of your organization. These two reasons alone could be a roadblock to the effective integration of remote developers with the local team and may lessen motivation for the remote experts to attain the common goal along with the local team. Both situations make it vital for remote team integration with the local team to ensure seamless communication and the motivation to pursue a common goal.

The main types and sources of staff augmentation

Now, having found out what staff augmentation entails, mentioned the key benefits, and highlighted the most appropriate scenarios for using this approach, we can move on to discussing its different available forms.

Traditional staffing or offshore staff augmentation

This is the most common way to augment your team with specialists without narrow expertise. You find a vendor and request a team extension with experts of particular skill sets and experience. The vendor is then responsible for recruitment and HR activities, offices, and salaries. When the experts are ready to take on the project, you take on their management as employees. Traditional staffing suits all types of projects where there is a need to increase the number of experts working on a product; however, it has its limitations, thus making other types of staff augmentation relevant.

Specialized staffing and boutique agencies

You may have unique needs and may be looking for a rare skill set in your potential team members. In this case, it makes sense to contact an agency that specializes in a specific tech stack or industry to narrow down the search in your recruiting efforts and get quicker results.

Master vendor

In this model, you have the option of delegating full responsibility for staffing activities to one of the IT staffing companies. The master vendor will work on fulfilling all the positions by their own efforts, utilizing the services of 2nd- or even 3rd-tier recruitment agencies when needed. This model offers the following benefits: cost savings, quick hiring, and bulk hiring.

Staff augmentation platforms

  • On-demand staff augmentation platforms: similar to having a master vendor, this type of collaboration will offer you quick hiring with no recruitment hassles.
  • Gig platforms with access to independent contractors: these platforms will allow you to hire and assign freelancers quickly to complete short tasks without any recruitment hassle. While any meaningful and long-term collaboration is impossible, sometimes, completing a set of short tasks will be enough in your case.

Independent contracting

If you don’t have a clear scope for your project and think you may need to terminate employees’ contracts at short notice, you can consider this option as well.

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Staff augmentation/team extension: Comparison with the most popular models

Staff augmentation vs. Managed services

The major difference here is in management and picking candidates for various roles. The staff augmentation model allows you to personally choose experts and organize their workflow with the methods you consider the most fitting. Your IT staffing services partner will handle recruiting, HR, and administrative hassles with all the associated paperwork, leaving you free to focus on your core responsibilities and business processes, treating your extended team as a part of your company.

With a managed services model, the outsourcing software development company will take care of some aspects of your project. More often than not, all coding and software-building activities will be covered by the vendor. This model allows you to have no in-house team at all, and you don’t need to spend any time with your remote development team. There could be exceptions, as partnering companies serve the clients as well as they can, but it is common not to know who exactly is working on your project, what developers are doing at the moment, and what decisions are being made to achieve the final goal. If you want to micromanage and fine-tune the development process, a managed services model might not be the best for you.

The managed services model is a great fit when you are ready for a greater degree of delegation, want to optimize the activities of your in-house team by transferring some of them to the outsourced team, and prefer to focus on your business and marketing. Additionally, keep in mind that managed services providers have experts or even expert teams “on a bench.” This means that you will have a quicker start compared to the staff augmentation model. With managed services, you might be able to start developing your product immediately or very soon after signing a contract.

Staff augmentation vs Dedicated team

At first glance, these two models seem similar. However, in a dedicated team model, the vendor takes over more responsibilities. With staff augmentation, you manage all the temporarily acquired experts, while in a dedicated team model, the vendor handles the management processes.

Staff augmentation vs. building your own Offshore Development Center (ODC)

In cases where you need to extend your team with a considerable number of experts, let’s say 40+, you can think about setting up your own Offshore Development Center (ODC). It makes sense to establish your ODC in a country with a better business environment and access to a wider tech talent pool that meets your needs.

To establish an ODC, you need to cooperate with a vendor who will set up your representative office in a foreign country. For a fee, a vendor will handle staff recruitment, will find an office space, and work with other service providers on things like internet connection, furniture, supplies, etc. After these aspects are taken care of, you will be able to manage your new team and an office on your own as a part of your company. While the vendor sets up the outfit, you will be responsible for all other risks going forward, including legal compliances, taxation, or cultural-difference-related issues.

In staff augmentation collaboration, when the project is finished, the experts just stop working on it and switch to another one provided by the vendor. With ODC, you will have an entire office with a team of talent whom you will need to lay off or reassign when the project on hand is complete.

 Staff AugmentationManaged ServicesDedicated TeamODC
RecruitmentVendorExperts are available/quick hiring by a vendorVendorVendor
Office buildingsVendorVendorVendorClient
PayrollVendorVendorVendorClient
ManagementClientVendorVendorClient

Of course, there are more options for outsourcing, but these are some of the most common ones. To decide which model fits you best, here are some tips to pick the right one:

  • Think about all data sensitivity nuances, since just signing an NDA might not be enough for some projects and certain privacy risks will remain
  • It will be a good idea to calculate the costs of training your in-house team to work with an outsourced team. Unless your processes and infrastructure are ready for remote collaboration, there might be no actual cost saving in using outsourcing

How to select an IT staff augmentation service provider?

Location

When it comes to offshore IT staffing firms, the actual geographical location is one of the key factors in finding a partner. Consider factors like cultural differences, time zone differences, the numbers of available talent, tech expertise, salary levels, and proficiency in English before making your decision.

Reputation

When the decision on a country is made, it’s time to move on to checking the reputation of the software development vendors. After the companies have been shortlisted, it will be a good idea to look for reviews on platforms like Clutch, Google, and Facebook. Feel free to ask companies to provide references for their previous work. Awards and rankings can be another means of evaluating vendors’ reputation.<

Scaling capacity

It is important to know the recruitment capacities of the chosen country if you plan to grow your outsourcing team in the future. A large talent pool in the country does not always mean that you will be able to constitute a software development team quickly. In fact, sometimes it may take months. So look for large or mid-sized outsourcing providers as they usually have some talent on the bench, and it is easier for them to attract and train new experts when needed.

Brand image

The success of your project is built by people. That’s why it makes sense to check the vendor’s reputation as an employer in the local IT market. When a vendor takes care of their employees, it will be easier for you to control the retention rate within your software development team.

Established delivery model

It makes sense to partner with companies that have a proven track record in building software remotely. The vendor’s experience in building similar projects will be a big plus. Additionally, long-lasting partnerships are also a sure sign that a vendor is a truly reliable business partner.

Developed infrastructure

This might seem obvious, but it is important to ensure that your potential partner will be able to run processes efficiently and has all the necessary hardware, software, and network resources on site to deliver staff augmentation services.

Highest security standards

Security should be a priority for everyone involved in the development process. Today, it is indispensable for a vendor to comply with international security standards including ISO, PCI, and HIPAA. Your vendor should have secure office facilities, protected IT infrastructure, and experts to mitigate security risks.

Our experience in IT staff augmentation

Here at SPD Group, we have over 15 years of experience in software development and currently retain 500+ experts in our company who are proficient in the latest technologies and have experience in areas like Custom Software Development, AI Solutions Development, IoT Solutions Development, Integration and Modernization Solutions, Proof of Concept & MVP Development, and Fintech Development.

As an example of staff augmentation, we managed to increase our team 6x in six months according to client demand, supplying experts for Poynt, a revolutionary open commerce platform and the inventor of the Smart Terminal. We began our partnership with Poynt in early 2019 and have since become a primary software development partner responsible for two main business directions. After the acquisition of Poynt by GoDaddy in 2020, our team remained a partner and readily joined the new owners to achieve even better results.

As your partner, we will take care of the hiring process, leveraging a powerful requiting department that can find experts on the market to suit your staffing IT needs. Indeed, we will do everything we can to make remote experts as efficient as your in-house team in delivering business results.

Conclusion

To conclude, it is important to add that staff augmentation is a suitable business model for organizations of any size. Implemented properly, this model can help you to achieve additional cost savings, achieve an entirely new level of flexibility (compared to in-house teams) and, most importantly, will leave you free to focus on the core business objectives. If you need any additional help with outsourcing, feel free to contact SPD Group for more information.

They are traditional staffing or offshore staff augmentation, specialized staffing and boutique agencies, master vendors, gig platforms with access to independent contractors, on-demand staff augmentation platforms curating the employment and work of staff, and independent contracting.

The most viable alternatives are approaches like a Managed Services model, the Dedicated Team Model, or an Offshore Development Center.



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