Staff augmentation is not just a buzzword in the business world. It is a strategic approach that many organizations use to meet project requirements and fill skill gaps. By understanding the true meaning of staff augmentation, your company can effectively adapt to changing project needs by hiring specialized contractors or temporary skilled employees. This approach integrates external talent with your existing workforce, increasing your capacity, diversifying your skill sets, and providing coverage during absences. With IT staff augmentation, businesses gain unmatched flexibility to scale their workforce up or down as needed.
In the current business environment, project requirements can change quickly, and organizations often have difficulty finding the right talent with the needed skills. This is where staff augmentation becomes important. By using this type of outsourcing, companies can easily access the expertise they need without the long-term commitment and expenses of hiring full-time employees.
Historical Background
The idea of staff augmentation originated from the introduction of temporary staffing in the late 1940s and early 1950s. Initially, businesses utilized temporary staffing for clerical tasks like administrative work and data entry. However, as technology advanced, this approach expanded to encompass specialized skills in different areas such as development, marketing, finance, and customer service. This enabled companies not only to fill temporary positions but also to access a wider range of talent and expertise.
According to Larson and Larson (2013), the expansion of staffing augmentation was particularly notable in the IT industry during the 1970s. As software development projects grew in complexity and scale, companies turned to hire augmented staff to supplement their in-house teams and access specialized technical skills. This trend has continued to gain momentum over the years, with staff augmentation becoming increasingly popular across industries.
.png)
Benefits of Staff Augmentation
A. Flexibility in Workforce
One of the main advantages of this alternative is its flexibility. Companies have the ability to easily adjust the size of their workforce to align with current business requirements. This flexibility enables organizations to efficiently meet project demands and adapt to market changes without the long-term commitment of hiring permanent employees. By utilizing staff augmentation, businesses can ensure optimal staffing levels and avoid incurring unnecessary costs associated with idle resources (Ferrazzi, 2014).
B. Access to Specialized Skills
Staff augmentation offers the chance to tap into specialized skills that may be lacking in the current workforce. When dealing with a project that demands niche expertise, organizations can enlist contractors with specific skills for individual projects. This guarantees the efficient utilization of the right expertise and improves project outcomes.
C. Maintenance of Project Control
Unlike traditional outsourcing arrangements, staff augmentation allows companies to maintain control over their projects. Project management remains in-house, facilitating better communication, collaboration, and alignment with organizational goals. This level of control can result in improved project outcomes and greater client satisfaction.
Trends in Staff Augmentation
The trends in staffing augmentation indicate a future characterized by versatility, agility, and increased reliance on contractors. The COVID-19 pandemic has accelerated the shift towards remote work. As of 2023, 12.7% of full-time employees work from home, while 28.2% work in a hybrid model. By 2025, it is projected that 32.6 million Americans will work remotely.
Consequently, there is a growing demand for remote contractors, which play a crucial role in staff augmentation. By utilizing this dispersed talent, companies can access a broader range of skills without being limited by geographical boundaries. This enables them to execute projects swiftly, which is essential for maintaining competitiveness.
Artificial Intelligence (AI) and automation are expected to revolutionize staff augmentation services. Machine learning algorithms streamline the process of finding the right talent by predicting skills and competency needs in advance. AI platforms not only automate the selection process, but they also facilitate continuous learning and skills development for workers.
According to a study by Market Growth Reports, the global market size for IT staff augmentation is projected to reach USD 147.2 billion by 2028. The financial sector has been at the forefront of IT staff augmentation adoption, with approximately 45% of financial companies in the US utilizing augmentation services to enhance their IT capabilities, as reported by Deloitte.
.png)
Cost Efficient Hiring
Adopting staff augmentation can result in cost savings in multiple ways. Firstly, it reduces expenses related to hiring full-time employees, including payroll taxes, benefits, and overhead costs. Additionally, according to a report by the Society for Human Resource Management (SHRM) in 2017, the average cost of hiring an employee was estimated to be $4,129, taking an average of 42 days to fill a position. Moreover, a report by CodeSubmit states that hiring a full-time software developer can cost between $28,548 and $35,685. The recruitment costs are influenced by factors such as whether you are looking to hire an in-house developer, a freelancer, or using an agency.
Secondly, companies can save on training and development expenses by utilizing augmented staff. Augmented staff members are typically already trained and skilled in their field, requiring little to no further training. According to the 2019 Training Industry Report by Training Magazine, US employers spent an average of $1,286 to train one employee for the year. Staff augmentation helps companies avoid these costs.
Hiring augmented staff in South America can result in significant cost savings. On average, the salary costs for augmented staff in South America are over 50% lower than the costs of hiring staff in the United States. This cost advantage allows companies to allocate their resources more efficiently and invest the saved funds in other strategic areas, ultimately contributing to their overall business growth.
Lastly, staff augmentation prevents overstaffing and underutilization during lean periods, which can lead to unnecessary costs for companies. The money saved can be reinvested in strategic business areas, contributing to the overall growth of the business.
Conclusion
Staff augmentation provides organizations with a flexible and efficient method to meet project requirements and address skill gaps. It enables companies to expand their workforce, access specialized skills, and retain control over their projects. As the global market for staff augmentation continues to expand, businesses can use this strategy to optimize resource allocation and achieve project success.
At Betterway Devs, we are a trusted provider of software development staff augmentation services in South America. If you're interested in learning more about how staff augmentation can benefit your business or if you have any questions, schedule a call with an expert today.
Paula Tellez
BetterWay Devs Inbound Marketing Manager
https://www.linkedin.com/in/paula-tellez/
References
- Ferrazzi, K. (2014). Getting virtual teams right. Harvard Business Review. Retrieved from: https://hbr.org/webinar/2015/02/getting-virtual-teams-right
- Larson, R., & Larson, D. (2013). Augmentation vs. outsourcing: A false dichotomy. Project Management. Retrieved from http://www.elearn.eng.cu.edu.eg/pluginfile.php/4261/mod_resource/content/1/Project Management Book.pdf
- Markets and Markets. (2020). Staffing Firm Services Market Global Forecast. Retrieved from https://www.marketsandmarkets.com/Market-Reports/workforce-management-market-27548173.html
- Training Magazine. (2019). Training Industry Report. Retrieved from: https://www.trainingmag.com/.
- Society for Human Resource Management (SHRM). (2017). The Cost of Hiring. SHRM Research. Retrieved from: https://www.shrm.org/topics-tools/news/talent-acquisition/real-costs-recruitment
Suggested Readings
Mastering IT staff augmentation enhancing your it capabilities
Recommended staff augmentation firms to hire long-term software developers in South America
Staff Augmentation vs. Outsourcing: Which one is right for your business?
Tips for Effective Onboarding of Team Augmentation Members
Scaling IT Teams: The Power of Staff Augmentation in South America
.png){kind=spacer}
.png)