Staff augmentation of IT specialists, otherwise known as outstaffing, is in high demand at the moment, largely due to the ongoing shortage of qualified personnel. This article explores the necessity for staff augmentation and the problems it helps solve.
Understanding Outstaffing
Consider a bank planning to launch a new financial app for its teenage customers. To bring this app to life, its team must conduct market research, develop a business model, design the interface, craft content and develop the backend of the software. The bank, however, is currently lacking human resources needed for these tasks. With their staff already fully immersed in other projects, the bank would need to go through a lengthy hiring process to bring on new employees. Instead, it decides to work with a third-party agency to hire a temporary team to implement the project. This agency takes on all the recruitment, payroll and other HR processes involved with the hiring of these employees in an arrangement known as staff augmentation or “outstaffing”.
To put it simply, outstaffing is when a company "rents" a specialist or a group of professionals from an external organization to carry out projects or specific tasks within a contract term.
How Staff Augmentation Works
Typically, this arrangement involves working full-time on a concrete project for a one business. It can sometimes be part-time if the employee manages other tasks to stay fully booked. Businesses pay for an IT specialist or team's hours through a staffing company, either at a fixed monthly rate or based on the actual hours worked. The client is responsible for setting product requirements, defining tasks, establishing priorities, and managing the project through a designated manager who liaises with the IT specialists and approves their work. This project management is usually done through existing client systems, using tools like Jira, YouTrack, Asana, or Wrike.
The staffing agency handles all employment and financial issues and can also supplement, enhance, or replace specialists or teams as required.
Types of Staff Augmentation
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Permanent: Reducing in-house staff numbers; employees work for the same company but are officially listed under another organization.
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Project-based: When a business requires IT staff augmentation for specific tasks, such as developing a new product or feature.
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Task-specific: Used for a single project or task. Once the project ends, the agency seeks a new project for the employees.
When Businesses Need IT Staff Augmentation
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When lacking specialists with the required expertise for a product or project.
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When teams want to accelerate development timelines to bring a product to market faster or improve performance metrics.
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If a team member is available but lacks the necessary skills for a project with tight deadlines.
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In order to tackle an accumulated technical backlog burdening the in-house team.
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When looking to hire employees that may require extra legal paperwork, such as specialists from overseas. The staffing agency handles all legal and administrative paperwork .
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To cut costs on design and development personnel. Using staff augmentation saves money on specialist salaries, accounting, and HR departments. Because augmented staff do not require benefits like insurance and severance pay, businesses end up cutting down operational costs associated with a large technical team.
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To free up key company employees to focus on strategic tasks and concentrate on core business growth.
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If staff is needed temporarily for a specific task or project.
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If struggling to find a specialist, such as a developer with a rare set of skills.
Drawbacks of IT Staff Augmentation
The primary drawback is the risk associated with partnering with a disreputable staffing organization. Contractors might partially or completely fail to fulfill their obligations, suddenly increase their rates, or change the terms of the contract. Augmentation staff can experience burnout when constantly faced with unpromising projects or inadequate pay, and the client cannot influence these aspects.
The staffing provider is not responsible for the final outcome—all project accountability resides with the client. Challenges might arise when establishing business processes and communication with augmented staff. Businesses must allocate resources for onboarding, task assignment, and performance monitoring.
Advantages of IT Staff Augmentation
Outstaffing allows companies to skip recruitment and training stages of a project, significantly reducing expenses in these areas.
The business can hire as many employees as needed to complete current tasks. This provides elasticity to your workforce; employees no longer need to seesaw between idle downtime and overwhelming piles of work. This significantly cuts down the amount of hiring or laying off done in these departments by HR teams. When outstaffing, if a candidate is not suitable for a project or task, they can be replaced quickly and at no extra costs.
Compared to the traditional in-house hiring IT staff augmentation allows businesses to quickly find and deploy highly trained specialists with rare competencies. Outstaffing saves the time and money needed to upskill existing employees, allowing business to scale quickly and efficiently.
In conclusion, Staff augmentation is a personnel management strategy that allows businesses to temporarily employ needed professionals through a specialized agency. This model is embraced by numerous companies, from large corporations to small startups. Staff augmentation is primarily used when a company is expanding and is looking to reduce personnel costs while focusing on core business goals, or seeking a specialist with rare skills.
