What is staff augmentation?

Staff augmentation is a term that is being thrown around a lot lately and if you’re in IT recruitment you’ve definitely heard the term before.

Let’s start out by clarifying that staff augmentation isn’t a new phenomenon, contingent workforces have been around forever. What’s changing is more and more companies are adopting remote work lowering the barrier for freelancers and outsourcing services like staff augmentation.

In this article we’ll break down the benefits of staff augmentation, compare it to the leading alternatives, and share tips to help your organization be successful with outsourcing.

Defining staff augmentation

You may find yourself asking what exactly is staff augmentation? While most will be able to infer it relates to increasing staff, it still leaves the questions of how and why.

So how do we define staff augmentation? With staff augmentation, we’re referring to bringing in software developers to work alongside your inhouse team. These developers aren’t hired directly, they’re employed through an external agency or are hired as independent contractors.

The software developers work exclusively on your project and you manage them directly, in effect they act as an extension of your inhouse team.

Source: Evans Data

As an outsourcing strategy, staff augmentation has been gaining traction due to the shifts in U.S. immigration policy that have lead to a decrease in the availability of domestic-based foreign talent. This led to an increase in demand for outsourcing services like staff augmentation, that allow companies to source tech talent from anywhere in the world without having to worry about the implications of hiring them directly.

What are the benefits of staff augmentation?

While there are many benefits to staff augmentation, we’ll be focusing on nearshore staff augmentation, which is our area of expertise.

Respond to changing business needs: staff augmentation allows hiring managers to take advantage of new growth opportunities, scale their existing team to meet deadlines, and even scale down without worrying about the associated cost and liabilities you’d have with direct hires.

Closely manage resources: staff augmentation brings the software development process inhouse, as opposed to managed services, where you basically hand off the entire process to an external team. With staff augmentation you’ll be closely overlooking each step of the software delivery process, ensuring you’re always on schedule and giving you more control over the outcome of your project.

Spend less time and money on recruitment: traditional inhouse IT recruitment is notoriously expensive, difficult, and unreliable. This is only exasperated when trying to manage the hiring process across multiple countries (or even continents), with each country having its own unique employment laws and regulations. Staff augmentation on the other hand, offers predictable recruitment costs and minimal burden on your inhouse team.

Quickly & efficiently gain inhouse expertise: staff augmentation allows you to quickly close the skill gap presented by building a project with a new technology or framework. No need to use internal resources training your existing team or trying to recruit a new team, use staff augmentation to hire a team of experts with minimal risk.

No infrastructure investment: you don’t have to worry about trying to account for most of the costs associated with direct hires like equipment, employee benefits, training, office rental, etc..

With staff augmentation, all those costs are either absorbed by your outsourcing partner or included in the hourly rate. Staff augmentation also allows you to try out software developers before committing to hiring them directly.

Easier and more accurate cost planning: one of the complaints with traditional inhouse software recruitment is it’s difficult to accurately predict how much it will cost to fill a position. Recruitment costs tend to vary as well as administrative costs, making it difficult to accurately predict the cost of hiring and maintaining an employee. With staff augmentation, you have a transparent cost structure; all the administrative and organizational expenses are covered by your outsourcing partner and are included in the hourly rate. That means you no longer have to try to plan for fluctuating recruitment and administrative costs.

No geographic limitations: this is a big one, especially for companies struggling to recruit the level of talent they need for their projects. In 2019, the global outsourcing market amounted to 92.5 billion U.S. dollars. Latin America has the second-fastest-growing software developer population in the world, second only to India. Both regions are set to outpace North America and the EMEA region for the fastest growth according to a study by Evans Data Corp.

When to use staff augmentation

1. Shortage of local talent. If you’re struggling to find developers locally with the skills you need for your project, staff augmentation will give you access to a broader pool of talent allowing you to fill positions quicker.

2. When you’re already outsourcing part of your product development but want more insight and control, with staff augmentation developers work exclusively on your project allowing you to manage their work directly.

Staff augmentation vs managed services##

Staff augmentation

With staff augmentation, you’re in charge of the selection process and manage the candidates directly. Your outsourcing partner is responsible for all the organizational and administrative burdens allowing you to focus on initiatives that will move your business forward.

Managed Services

Managed services are great especially when your company’s core competencies aren’t tech-related, seeing as many times you won’t have the internal knowledge to effectively manage the entire software delivery process. With managed services, your outsourcing partner will handle everything from selecting the developers for your project to managing the team’s workload.

How to succeed with staff augmentation

Make it a point to incorporate your nearshore team with your in-house team. Making them feel like part of the team helps motivate developers and increase their interest in your project.

Incorporate best practices for remote teams, including using tools that facilitate remote team collaboration and holding virtual team-building events to improve remote work culture.

Outsourcing partners offer varying levels of support. For example at Blue Coding, you’ll receive continued support from our HR department and client management team. If you need more support than what your outsourcing partner offers you’ll need to consider hiring supporting roles like a project manager to work alongside your development team.

Why Augment Your Team with Blue Coding?

Blue Coding has a strong recruitment presence that expands across Latin America, the Caribbean, and beyond. This includes the Dominican Republic, Mexico, Argentina, Brazil, Colombia, Costa Rica, Chile, Peru, and more.

We offer our clients continued support from our HR department and client management team for the duration of their contract.

You only pay for the developers you hire, it doesn’t matter how many candidates you interview. We understand the importance of finding the best fit for your organization.

Flexible capacity - expand or reduce your team based on changing business needs.

Track record of success: we've been helping North American clients build teams in Latin America since 2014.

If you need help deciding between staff augmentation, managed services, or a hybrid approach, schedule a free outsourcing strategy call today!