In a place, where life moves fast and ever-changing, companies seek ways to enhance their employees, or rather use them to meet competition requirements. One of the methods that has begun to catch on in the minds of people during these past years has been staff augmentation.
With this method, an organisation can instantly increase its number of employees into a team, avail specialised skills, and obtain global talent without the long-term commitment to the hiring of permanent employees. But what is meant by staff augmentation? What benefits would it hold for your business?
In this deep detailed guide, you will find a complete analysis of the staff augmentation model, an explanation of how it operates, its merits and demerits, plus how the model can be successfully integrated within your organisation.
What is the staff augmentation model?
Staff augmentation is termed as a flexible outsourcing strategy through which a company can hire external personnel only for specific projects or use them to fill gaps in existing teams on an interim basis. Under staff augmentation, unlike traditional outsourcing, where the external company takes full responsibility for the service or delivery of a project, the external professionals join the existing team.
That means a business can contract temporary or contract-based workers who will work with their in-house employees. This could either be based on a short-term or long-term basis. It will all depend on need. Coming with staff augmentation services is the access to such highly specialised skills, which are mostly unavailable in the existing workforce, and enables fast ramp-up or scale-down opportunities based on need.
How does the staff augmentation model practice?
With the staff augmentation strategy, professionals seek assistance from a third party or vendor in locating and bringing external professionals into the company. They are aligned with exactly what you need in business, and then these external workers become part of your team, working alongside your existing employees, but employed by the vendor (or as independent contractors).
Such external workers come for various roles and jobs such as Developers, Marketer, Designers, Engineers, or Project Managers. You can use them according to the project needs. Staff augmentation model benefits are countless.
After staff augmentation model meaning, here is how the model of staff augmentation works:
Identifying the need
First, you identify the specific roles or sets of skills that you require in your company. These are likely for short-term projects, reasons due to absence, or simply gaps that your existing workforce does not have.
Partnering with vendor
Mainly companies partner with a staffing agency or vendor, which helps establish sourcing talent found through its network. These agencies act as a bridge to skilled professionals mostly on a global scale to help companies access the best talent-out faces.
On-board hiring talent
Once qualified professionals are selected, they shall be brought on board to your team but employed and paid for by the vendor while working with your internal team.
Management of workforce
Although the extended team members are working under the various directions of the company, as an employee or at times by vendor oversight, you will probably do it yourself. The control aspect remains on the daily operation tasks and team dynamic matters.
Transition and conclusion
Once the work processes or jobs have been completed, they do not need any long-term arrangement with permanent costs, and an easy exiting mechanism at the end of the given task-and period is possible with staff augmentation.
Types of staff augmentation models
Staff augmentation can be broadly categorised into two types: onshore and offshore. Each of these models offers different advantages and challenges, depending on the location of the augmented staff and your business needs.
1. Onshore staff augmentation
Onshore staff augmentation is hiring professionals, who are working in the same country or region as the hiring organisation.
This brings advantages like:
Cultural and communication fit: Since the augmented staff is local, no barriers in language and culture make communication even smoother. The staff augmentation business model is a great fit.
Time zone compatibility: Normally, onshore staff would work in the same time zone, thus making collaboration more seamless.
Legal and compliance factors: Involved professionals are usually local; thus, there is no worry about international labour laws and tax issues.
However, onshore staff augmentation is generally more expensive than offshore and nearshore models because the pay can be higher in the same country. The staff augmentation pricing model is cost-effective.
2. Offshore staff augmentation
Offshore talent augmentation is when one seeks talent from outside the country (mostly low-cost labour countries) to bring it into the country. However, for this, several other countries are comfortable in providing offshore talent, like India and the Philippines, Eastern Europe, etc.
Read more: What is offshoring?
Benefits of offshore staff augmentation include:
Value for money: Offshore employees often offer significant cost savings, as salary levels in certain countries are generally lower than in others.
Global talent pool access: You get to access a very wide range of specialised professionals from all over the world.
Scale: Virtual and offshore teams are the best ways to make your office workforce scalable.
Some challenges are:
Time zone differences: Sometimes, communicating with offshore staff takes a longer time because of the time zone differences.
Cultural and language barrier: Working with teams having different cultures sometimes leads to miscommunication as well as delays in communication.
Learn how they are different yet connected- Staff augmentation vs outsourcing.
3. Nearshore staff augmentation
Nearshore staff augmentation involves finding professionals who are located in neighbouring or adjacent countries. This model combines offshore staffing's cost savings with onshore convenience.
Read more: What is Nearshoring?
Benefits include the following:
Closer time-zone alignment: Nearshore teams typically work in a very similar/close time zone to the client's time zone, where you will find much less hassle when compared to offshore teams.
Lower costs: Though not costlier than an offshore professional, hiring one for nearshore would cost you less than the onshore employee.
Cultural affinity: As people live closer together, there would be fewer cultural differences, thus making communication easier.
Related: Nearshore vs Offshore Outsourcing
Advantage of staff augmentation
Admission to specialised skills
Staff augmentation opens the door for corporations to enter a much wider pool where specialised skills easily available within the current workforce may be sought after. Be it the required expertise in a specific technology or niche industry know-how, or with project management skills, staff augmentation allows quick scoping of professionals who are proficient in specified skill sets. Often, it is for those highly technical or industry-relevant knowledge projects.
Cost-effective services
It proves economical as opposed to hiring full-time employees. The business pays for the so-needed skills and expertise for the duration of the project or just for a single project to get rid of long-term costs that permanent employees incur, such as salary, benefits, and other overheads (i.e., office space, equipment, etc.). In this way, recruitment, training, and retention costs do not have to be observed.
Scale and flexibility
Staff augmentation lets companies flexibly scale their workforce quickly based on fluctuating project needs. If there's a surge in workload or a temporary project in the company, you can augment your team with the right professionals so that work gets done on time without getting into permanent hiring. This way, once the project is done, external workers can be let go without the long-term commitment of permanent hires, bringing the flexibility to adapt to changing business needs.
Speed and efficiency
Hiring and onboarding full-time employees can be lengthy and expensive processes. Staff augmentation lets organisations fill the gaps in their teams faster, and with professional staffing agencies that typically maintain a pool of pre-vetted candidates, the long wait in searching for, interviewing, and hiring talent is reduced significantly. This, however, does not prevent quick turn-around times that let companies stay agile and keep their projects from derailing.
Lowered risk and admin burden
Employers would outsource the staffing function to third parties, thereby mitigating the risks of full-time employment and alleviating burdens associated with such contracts. The vendor becomes the employee's legal employer and manages contracts, benefits, payroll, and compliance with labour laws. This is especially useful when sourcing directly from other regions or countries, where dealing with some local labour laws may become difficult.
Focus on core competencies
By outsourcing highly specialised tasks to external talent, the internal team may concentrate on the more strategic priorities and core competencies of the business, consequently increasing overall productivity while enabling internal employees to concentrate their efforts on high-priority work, thereby enhancing the efficiency of the whole organisation.
Accessing global talent
Staff augmentation lets organisations leverage talents from all over the world. This is useful especially when those companies need an employee with a rare skill, and the local market is quite limited in that regard. Be it a type of programming language, a certain industry certification, or a rare brand of expertise, hiring talent from around the world gives greater flexibility and access to the best professionals.
Try remote working- Read our blog on “what is remote working” to know more.
Challenges of staff augmentation
Management complexity
It can be complicated to manage a team that includes both in-house employees and augmented staff. While the augmented staff work closely with the permanent employees, they are hired by a third-party vendor, which usually results in problems in managing their workflow, roles, and communication. It is essential to have clear guidelines on acting lines of communication and structure on how to manage the augmented staff to ensure a sound collaboration approach between the two parties.
Cultural and communication barriers
With an augmented team, particularly cases offshore or nearshore, different communication styles, work cultures, and time zone differences can create challenges. There may be barriers such as language, regional customs, and even the mutual concept of time zones that might lead to misunderstandings sometimes, project delays, or low collaboration. Therefore, it is imperative to note these differences and be willing to invest time in developing strong communication and collaboration from the start.
Quality assurance problems
Staff augmenting becomes a possible solution to gain from an additional level of workforce resource, but it is no walk in the park to ensure that quality is kept up with in-house personnel-to-augmented staff. Augmented staff may not be used to the internal processes and culture of your company. There may be variance in the quality of working outputs or standards expected from in-house teams and augmented staff. Hence, precise performance criteria, regular reviews, as well as transformational oversight are necessary to guarantee that work output from augmented staff meets company expectations.
Risk of dependency on third-party vendors
Business dependency on staff augmentation after much reliance on third-party vendor services for sourcing talents can pose a risk. For instance, any vendor can fail to provide your required set of talents, or you may not find talent in adequate numbers having very specific skill sets. In addition, it will impact the continuity of the project and cause delays when the relationship with the staffing agency is either broken off or interrupted.
Coordination with various existing teams
One way that augmented staff struggle to fit into the existing team is due to differences in the work styles and even the degree to which the cultures and dynamics across teams are either aligned or out of alignment. However, effective integration of augmented staff requires planning, effort, and procedure for smooth onboarding, collaboration, and creating an all-inclusive sense of belonging.
Concerns about the security and confidentiality of information
When an organisation works with external professionals, especially those offshore, it must ensure maximum data security and confidentiality. Augmented staff access sensitive company data or proprietary information, greatly increasing the risk of breaches. Rigorous security protocols need to be in place, and both NDAs and anti-theft or leakage prevention measures must be applicable for all third parties within or outside any borders.
Legal and compliance problems
Employing augmented employees, especially from abroad, can bring with it a number of legal and compliance obstacles for a company. Not only are labour laws different across diverse regions, but each also impacts taxation mechanisms and hiring regulations, thus complicating recruitment. The organisation must ensure compliance locally, in the jurisdiction in which the augmented staff are based, as well as where the business operates. All the same, ensuring compliance with local, national, and international labour laws can be very cumbersome and complicated.
Minimal long-term commitment
One of the obvious limitations of using an employee augmentation model is that such employees are generally acquired for only a short time or on a temporary basis regarding the project. Hence, while it provides flexibility, it will not be appropriate during long-term projects requiring more permanent and committed assistance. In addition, using temporary staff for a long time may lead to variations in performance standards and retention of knowledge, which, in turn, affects long-term strategic objectives.
Probable effect on organisational culture
Augmented workforces are often regarded as outsiders of the organisation. Sometimes, this causes organisational culture issues. When external workers are not well managed, they may find it hard to integrate with the rest of the in-house team members, and vice versa. Therefore, organisations need to shift to an inclusive culture of the augmented staff as part of a team while also placing work along the company's value and long-term agenda.
Best practices for successful staff augmentation
1. Role expectations and clarity
Before the integration of augmented staff, one needs to be clear on roles, responsibilities, and expectations from internal and external team members alike. A clear, detailed job description helps one ensure that everyone knows what they should be doing and what their task is, so as to avoid any confusion and misalignment very soon. Set definite goals and deadlines and key performance indicators (KPIs) against which augmented staff are supposed to evaluate his/her work.
2. Understand and decide on the appropriate vendor or agency
The success of any hiring augmentation endeavour greatly depends on the specific vendor or agency that they choose to go with. Potential staffing agencies should be put under a critical search to include the attention paid to the type of expertise they have, their reputation out there, and their ability to provide high-quality candidates on every required skill. However, most of all, partner with a vendor that understands that industry well and has a proven track record of being able to deliver the right talent into place, which massively reduces hiring risk. Ensure that the vendor is capable of providing flexible solutions suited to your business, whether onshore, nearshore or offshore.
3. Communication is clear
There is a major emphasis on effective communication in the case of augmented staffing. Whether the external professionals work in the same office or some distance away, without consistent and open forms of communication, expected objectives for projects will be out of line, and they become unsuccessful. Have regular check-ins, video calls, and performance reviews where areas of concern can be addressed early. Project Management software or others can help check the progress and assessment with accountability and transparency.
4. Efficiently onboard and integrate augmented staff
Some forms of onboarding are required even for temporary or contract staff. Hence, the addition of the augmented employee should be given the same orientation and induction as existing full-time team members. As far as the staff were concerned, this includes introducing them to the company culture, internal processes, and any relevant tools or software they would need to use. Proper, effective onboarding is what makes it possible for external workers to feel part of the team and to be productive right from day one.
5. Nourish synergy and teamwork
Bringing together a team is a key to the success of the staff augmentation. You have to include and enable external staff to be part of your organisation, notwithstanding the short duration of time they are in the company. Encourage collaboration between in-house and augmented staff through team-building activities, shared goals, and joint problem-solving. When augmented staff members work alongside permanent employees and integrate well with the team, the quality of output is improved, and the whole team dynamic gets enhanced.
6. Monitor performance and provide feedback
Although they work from outside the organisation, the augmented staff would still require continuous feedback and monitoring of their performance to keep them on the right track. Create performance metrics and invite periodical assessment of progress. Constructive feedback and prompt addressing of matters are necessary to eliminate negative influences on the project or team morale.
Conclusion
Staff augmentation comes with many associated benefits including specialised talent, cost efficiency, and flexibility. However, it is challenging. Therefore, a business needs to weigh the merits and demerits before opting for the staff augmentation model. Clear communication, a strong project manager, and frequent checks are vital in ensuring the smooth and successful integration of augmented staff into the team.
For companies that want to scale rapidly, address immediate needs or require specialised skills, employee augmentation can certainly break the bank. However, it is necessary to compare advantages against challenges such as complicated management systems, cultural distance, and legal binding for efficient implementation. This is the type of methodology that enhances a group’s prowess and enables such an organisation to achieve its objectives faster and more efficiently.
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