Staff augmentation vs outsourcing
Staff augmentation and outsourcing are two different recruiting approaches that businesses use to meet their operational demands. Outsourcing is more permanent, whereas staff augmentation is on a project basis.
What is considered staff augmentation?
Staff augmentation is a process where a company augments its internal team with temporary workers directly or through a service provider. They effectively address certain shortages of expertise or the occasional bursts of focused work in areas or industries that are not typically part of an organisation’s core business.
These Temporary employees just like the Permanent employees of the Company work with the organisation’s in-house staff, share the working days-hours just as your employees do, and thus follow organisational norms and policies as aforesaid just like your normal employees. This approach provides the conditions that allow you to have a physique and easily start big projects without considering the staff and other managerial aspects.
Wait, let me help you understand; contractual employees, JUST KIDDING, you are so mistaken, these two are not the same!
Staff augmentation is the practice of obtaining additional outsourced technical personnel for a limited period whereas, contractual employees are directly hired employees of the concerned organisation for a limited period.
Connect with Jon to learn how Black Piano can help you take on new projects without worrying about recruitment.
What is outsourcing?
Outsourcing is the efficient way of hiring an independent firm that is contractually responsible for providing services, operations, or tasks that your internal staff cannot accomplish or lacks time to do. It is one of the ways of addressing those gaps while ensuring that operations continue smoothly to avoid either high costs or loss-making.
When a business outsources, it can concentrate on activities that it is good at while leaving other chores, such as the management of a Black Piano to other people or companies who have the experience and skills to do it. Interested in learning more about offshoring and how this might raise your output and income? Discover more about offshoring. Read our blog on offshoring vs outsourcing to make a wise decision.
Which industries are ideal for outsourcing?
Outsourcing has become a strategic approach for many businesses looking to cut costs, improve efficiency and hire specialised expertise. Here are some key sectors where outsourcing thrives:
1. Software development
Software development is traditionally one of the most outsourced industries. IT personnel is always costly and thus hard to get affordable skilled developers. Outsourcing enhances the availability of talent for companies since they get to hire talented workers from across the world at a lesser fee.
2. Information technology (IT)
Outsourcing has been a phenomenon mostly related to the IT industry. From the activities such as networks and server management and the provision of cybersecurity services, outsourcing of IT tasks can greatly minimise operational costs, while enabling firms to embrace new technologies. By offshoring IT you can save a lot of money.
3. Customer support
Have you ever called a customer service line and spoken to someone halfway around the world? That is outsourcing in action. Customer care or support is commonly outsourced to countries where labour costs are lower, yet the quality of service remains high. This enables your business to offer 24/7 support within budget.
4. Human resource
HR functions such as payroll processing, recruitment, and employee benefits administration can be time-consuming and complex. Outsourcing these tasks allows you to focus on core business activities while ensuring HR processes are handled efficiently and in compliance with regulations.
5. Accounting and finance
Outsourcing accounting and finance functions can save companies both time and money. Tasks such as bookkeeping, tax preparation, and financial analysis are often outsourced to experts who can provide accurate and timely services. This is especially beneficial for small businesses that may not have the resources to maintain a full-time finance department.
6. Marketing and advertising
Outsourcing marketing tasks, such as social media management, content creation, and digital marketing, allows businesses to tap into specialised skills and innovative strategies without hiring in-house teams. Agencies and freelancers can offer fresh perspectives and creative solutions that drive brand success.
Make your business future-ready, read our blog on Offshore trends to understand upcoming trends.
What are the main differences between staff augmentation and outsourcing a dedicated team?
Both outsourcing and staff augmentation approaches can help your business grow, but here are the key differences you need to know between the two:
1. Control over team
Staff Augmentation- You are in the driver’s seat. Your business hires temporary workers, working under your direct supervision and following your processes and schedules.
Outsourcing a Dedicated Team- The outsourcing company takes the wheel. They manage the team, handle the day-to-day operations, and ensure project delivery based on the agreed-upon scope and timeline.
2. Flexibility and scalability
Staff Augmentation- Super flexible. Need more hands-on deck? You can quickly add more staff. Project winding down? You can scale back just as easily.
Outsourcing a Dedicated Team- Not as nimble. Changes in team size or skill set typically need to be negotiated and planned over time, which can be less responsive to immediate needs.
3. Expertise and specialisation
Staff Augmentation- You bring in individuals with specific skills to complement your in-house team. This is great if you need niche expertise temporarily or want to boost your team's capabilities.
Outsourcing a Dedicated Team- You get a whole squad with a variety of skills tailored to your project. Ideal for when you need a well-rounded, multi-disciplinary team to handle a project from start to finish.
4. Cost structure
Staff Augmentation- You pay for the hours worked by the augmented staff. Costs can be more predictable if the project scope is clear.
Outsourcing a Dedicated Team- Often comes with a fixed project cost or a retainer fee. It can sometimes be more cost-effective for larger, long-term projects as it includes management and other overheads.
5. Risk management
Staff Augmentation- You are handling most of the risk since you manage the team directly. This can include risks related to project delivery, quality control, and timelines.
Outsourcing a Dedicated Team- The outsourcing firm shares or takes on much of the risk. They are responsible for ensuring their team delivers as promised, which can relieve some of the stress.
6. Onboarding and ramp-up time
Staff Augmentation- Quicker to get started since you are only bringing in individuals. However, there might be delays in work as they will need some time to understand your processes and systems.
Outsourcing a Dedicated Team- Initial setup can take longer as you establish communication protocols and define project parameters. But once up and running, this team is self-sufficient.
Understanding these differences can help you decide which approach fits your needs best.
Thinking why you should hire from India? Read our detailed page on Why India and calculate how much cost you will save with a remote team here.
Staff augmentation vs project outsourcing
Staff augmentation
Definition: This is a process of recruiting during the project and engaging people with particular skills to solve certain problems.
Control: There is no loss of control over any aspect of the augmented staff and the project is always under control of the client only.
Flexibility: High, depending on the project’s needs, the client can add more members to the team or reduce the number of employees.
Integration: Augmented staff become a part of the client’s organisational structure.
Examples: Computer and information technology occupation, software engineer, and technical advisor.
Project outsourcing
Definition: Delegating the entire project or a portion of the project to the outside organisation.
Control: At the operational level, the client’s role is more passive as the outsourcing provider is responsible for the project.
Flexibility: Reasonable, primarily because the size and aim of the project are often laid down before it starts.
Integration: Low, since the project is run from outside and does not affect the client’s operations to a great extent.
Examples: Finish software development projects, marketing campaigns and overall customer service management.
Staff augmentation vs consulting
Staff augmentation
Objective: As can be used to supplement labour or skill requirements in the organisation on a short-term basis.
Engagement: Augmented staff are directly subordinate to the client which implies that they are a part of the client’s organisation.
Duration: They can be short-term or long-term depending on the needs of the project that is being assigned to this team.
Cost: Usually billed at an hourly or preferably daily rate.
Focus: On the fit execution of the tasks and assisting the client’s team.
Consulting
Objective: To give professional opinion and or consultancy.
Engagement: Consultants may engage in the process alone or together with the client’s staff, but they do not directly perform tasks; they suggest possible options to the client.
Duration: Generally, such relationships are shorter, and may be project based.
Cost: Higher, as it depicts the specialised nature and strategic importance of employees in the organisation.
Focus: In relation to analysing the existing problems, recognising potential and promising areas, as well as providing recommendations.
Managed services vs staff augmentation
Managed services
Definition: The contracting of certain IT functions or business process activities to another party, separately from the integrated package.
Responsibility: They fully own the managed services: staffing, technological, and process-related.
Control: Some, yet the provider dictates the day-to-day operations of the facility.
Cost: Generally charged as a block fee, the offering of a predictable price.
Examples: IT infrastructure management, cybersecurity service, and network looking-up services.
Staff augmentation
Definition: This means working on the client’s team for a limited period and often simply hiring more specialised employees.
Responsibility: Still, the client has authority over the augmented staff and what they do.
Control: High, because the augmented staff are managed by the client.
Cost: It is variable depending on the number of staff and date of employment with reference to the project.
Examples: Software developers, project managers and data analysts who want to develop expertise in Big Data and immediately be able to apply it in practice.
Pros and cons of staff augmentation
Pros
Flexibility: This makes it very easy to increase or even decrease the number of employees in the workforce depending on the project at hand.
Control: have total authority to direct the work of the team, to manage the projects of the team.
Speed: Overcoming the time-consuming problem of hiring and recruiting staff with the necessary qualifications.
Cost-Effective: Easy to incur expenses and obligations that are not required in cases of permanent employees.
Integration: Augmented staff can blend into the organisation’s teams and procedures effectively.
Cons
Training: Temp staff have to be recruited and trained and this incurred time and costs.
Dependency: If issues of employment reach a point of dependability on temporary staff, then related problems will arise.
Consistency: Flexibility and uncertainty in their work and attitude compared to regular/full-time workers.
Management: Additional workload to handle the staff growth which puts much pressure on the internal management.
Cultural Fit: Part-time/contingent employees will not fit in the corporate culture as much as full-time permanent employees would.
These pertain and arrows offer a useful point-by-point comparison of various strategies for managing and training the workforce, which assists the business in determining the most suitable way forward depending on its requirements.
Nearshore staff augmentation vs offshore staff augmentation
Nearshore staff augmentation
Definition: Recruiting more temporary workers from the neighbouring or the nearby countries.
Time Zone Compatibility: It has been seen that the nearshore teams work in quite close time zones which makes the flow of communication and teamwork easier.
Cultural Affinity: More similarities in culture which means that the integration of the team can be easily achieved hence improving collaboration.
Travel Convenience: People can more easily and cheaply travel for meetings or site visits.
Language Proficiency: Sometimes, there are more opportunities to hire people with better language skills, and fewer cases of language issues.
Offshore staff augmentation
Definition: Employing more and more people from other places temporarily usually on different continents.
Cost Savings: Actually, most offshore staff are cheaper because the distribution of labour markets is not the same.
24/7 Operations: The differences in the time zone should be a good factor to maximise productivity as the operations go on all day around the world.
Talent Pool: Availability of larger and in most cases, a better qualified workforce.
Communication Challenges: Potential issues with time zone differences, language barriers, and cultural differences.
How does Black Piano support staff augmentation?
At Black Piano, we make staff augmentation a breeze by connecting businesses around the world with top-notch Indian talent, all while keeping costs down. Our process is smooth and straightforward. We handle everything from sourcing to integrating remote staff, ensuring they hit the ground running.
With Black Piano, you get access to a rich pool of skilled experts, boosting your team's productivity and helping you stay ahead of the game. Plus, you will save on recruitment costs, making it a win-win all around.
