Staff augmentation is a powerful tool for any organization’s arsenal, yet not many understand the different types of staff augmentation and how to choose the right model. This guide is the perfect starting point.
The Rise of Staff Augmentation
One of the most significant trends in today’s business landscape is the dramatic increase in the use of contingent workers across organizations globally. This practice isn’t new; it began when administrators were borrowed across organizational borders to fill roles temporarily due to vacations, illnesses, and similar reasons. Today, contingent work manifests itself in many working models, the most common being staff augmentation.
Staff augmentation refers to the use of outside personnel on a temporary basis to increase your organization’s capacity.
When to Use Staff Augmentation
There is a wide range of scenarios in which companies leverage staff augmentation, including:
- Short-term projects requiring specific expertise
- Temporary replacement for employees on leave
- Handling peak workloads without permanent hires
The Impact of Staff Augmentation
The global staffing industry, a primary supplier of staff augmentation talent, is estimated to support $490 billion in annual spend. Freelancing, another source of staff augmentation talent, has gained prominence through the rise of global freelance platforms. In the US, 34% of workers engage in freelancing today, and this number is expected to grow steadily over the next decade.
Pros & Cons of Staff Augmentation
Staff augmentation comes with its own set of advantages and disadvantages. It’s crucial for hiring and project managers to determine whether this model suits their specific needs.
Pros
- Flexibility: Easily scale your workforce up or down.
- Cost-Efficiency: Avoid long-term financial commitments of full-time hires.
- Access to Expertise: Bring in specialized skills as needed.
Cons
- Integration Challenges: Temporary workers may take time to integrate into your team.
- Confidentiality Risks: Managing sensitive information with temporary staff can be challenging.
- Training Time: Initial ramp-up time can be required for complex projects.
Types of Staff Augmentation
Understanding the different types of staff augmentation is crucial for selecting the right model:
- Commodity: Workers with basic skills for simple tasks.
- Skill-based: Employees with specific skills but not high-level expertise.
- Highly-skilled: Experts in their fields, often required for specialized projects.
Choosing the Right Staff Augmentation Model
Most organizations use a mix of providers, depending on their needs. The key is to identify what you are trying to accomplish and what is most important. For example, hiring an expert in machine learning will require prioritizing skills over cost. Conversely, for tasks that are easily trainable, cost efficiency might be the priority.
When Is Staff Augmentation the Right Model?
3 Considerations
- Project Length: Best for short-term projects; for long-term needs, consider outsourcing.
- Confidentiality: Careful evaluation is needed for sensitive projects.
- Ramp-up Time: Not ideal for projects with heavy complexity and long training periods.
3 Misunderstandings
- Cost Avoidance: Hiring augmented staff doesn’t necessarily avoid costs; benefits are factored into rates.
- Expense Perception: Augmented staff can be cost-effective compared to full-time employees when considering benefits.
- Managed Services vs. Staff Augmentation: Managed services involve definitive deliverables, whereas staff augmentation focuses on job descriptions and hourly rates.
The Strategic Value of Staff Augmentation
Staff augmentation is increasingly used across various functions such as R&D, Operations, HR, and Finance. The importance of augmented staff for enterprises, as demonstrated by industry leaders like Google, highlights its critical role in increasing organizational agility and meeting changing needs.
