The sudden shift towards remote work is also accelerating a shift toward modern practices like staff augmentation. According to Deloitte’s 2020 study on the state of remote work, companies are now prioritizing cost-efficiency and agility as their top business objectives to stay ahead of constantly evolving requirements and maintain a competitive edge. For many, staff augmentation services may be a solution to help meet these goals.
Staff augmentation is an evolution of the original outsourcing model that equips organizations with a modern approach to extend their teams. This article will cover the basics of what staff augmentation is and how it compares to other popular models like full-time employment and managed services. We’ll also explore some of the ways businesses benefit from this approach and how to determine if it’s the right fit for your organization.
What is Staff Augmentation?
Staff augmentation enables teams to:
➤ Fill a temporary or long-term skills gap
➤ Quickly ramp-up and down without HR headaches
➤ Expand your team’s capacity
➤ Reduce costs
As the term suggests, staff augmentation is an outsourcing model that organizations use to augment or extend their internal team. Companies can essentially pay for the skill sets they need when they need them by hiring out-of-house professionals on-demand. For example, you can extend your software development team by contracting with a Frontend Developer with Data Visualization experience for four months instead of hiring someone on a full-time, permanent basis.
This is a popular approach for development teams that need to fill a particular skills gap or quickly ramp-up capacity for a specific duration of time. This way, teams can scale up and down easily without the HR headache (i.e., paperwork, payroll, severance, etc.). It’s also a valuable tool for smaller companies that need to keep costs down.
While staff augmentation is a great way to expand quickly and enables teams with the flexibility of hiring on a short-term basis, this model can also be a long-term solution. Over 50% of our clients work with us for longer than six months, and some have been with us for close to ten years.
The Benefits of Staff Augmentation
- Reduced costs: Staff augmentation can help you significantly reduce costs by avoiding traditional expenses associated with full-time employees (recruitment, benefits, termination fees, etc.). All expenses are factored into the hourly rate that you and the remote contractor agree on. For information about hourly rates, check out our guide on the cost of hiring software developers.
- Flexibility: Traditional hiring practices are slow and lack flexibility. Staff augmentation enables you to hire developers on-demand so your team can adapt to changing requirements and only scale up or down when necessary.
- Expanded talent pool: A significant benefit of staff augmentation is gaining access to a more extensive talent network. Instead of searching for candidates to apply, you can quickly connect with developers with the right qualifications and expertise by tapping into large, concentrated talent pools.
- Fast recruitment: If you need to extend your team in a short time, a staff augmentation process supports rapid hiring and quicker project start times.
- Control over the project: Staff augmentation enables you to expand your internal team so you can keep internal oversight of the project and have complete visibility into the work as it progresses.
Types of Staff Augmentation Services
There has been a tremendous amount of growth in the remote workforce over the last decade. In the aftermath of the pandemic, the number of remote professionals is surging more than ever, according to Payoneer’s Freelancing Survey.
Such enormous growth also means an abundance of platforms catering to this sector. I tend to segment staff augmentation into the following categories:
| PLATFORM TYPE | TASK/PROJECT | VETTING | COMPANIES |
| Task-based Platforms | Solve quick and simple tasks. Great for small, short-term projects e.g. Logo design | No vetting process | Fiverr, PeoplePerHour, 99Designs |
| Freelance Platforms | Good for small or uncomplicated projects e.g. WordPress or marketing websites | No vetting process | Upwork, Guru, Freelancer |
| Premium Staffing Platforms | Highly-skilled professionals Useful for complex projects e.g. Custom web and mobile applications | Thorough vetting process | Scalable Path, Toptal, X-Team |
The type of platform that is best for you will depend on the amount of time you have to invest personally, your project size, budget and other preferences. Task-based and freelance platforms work more like job boards in that you post a job and individuals or companies in the platform are notified automatically or can find your posting. Those who are interested will apply (regardless of whether they have the requisite experience) and it’s up to you (the client) to review, vet and interview any candidates you want.
Or, you can choose a premium platform that does the sourcing and vetting for you. Premium staffing platforms typically provide more personalized service, help you decide what type of developer you need and interview developers on your behalf. This includes platforms such as Toptal, X-Team, or ourselves at Scalable Path. You may pay slightly more on average for the higher level of service, but you won’t need to do as much work, you’ll likely find a great fit sooner, and you’ll have a higher chance of your engagement succeeding.
Benefits of Premium Staffing Platforms:
- Personalized service
- Guidance on type of talent needed
- Thorough vetting of candidates
- Less work for the client
- Shorter time to hire
- Higher likelihood of success
What is the difference between Staff augmentation and other hiring models?
Before you start the hiring process, It’s a good idea to compare the options for scaling your team. Let’s look at how staff augmentation compares to other popular models like traditional hiring (full-time employees) and managed services.
Staff Augmentation with Scalable Path vs Hiring Full-time Employees
Compared to the quick and flexible work engagements that staff augmentation can provide, full-time employment involves longer recruiting, hiring (anywhere from 1-3 months), and a long-term commitment. With the proper budget and processes to support full-time staff, building a strong internal core team has many benefits, especially for senior positions like a Chief Technical Officer or a Head of Engineering. That being said, for many companies, it’s not a cost-effective solution to scale your team.
| AUGMENTED STAFF WITH SP | FULL-TIME EMPLOYEE | |
| Start time | 0-2 weeks | 1-3 months |
| Recruiting costs | $0 | $15-30k |
| Quality of work | High | Unpredictable |
| Termination fee | $0 | High |
| Overhead | Low | High |
| Pre-vetted | Yes | No |
| Pricing | Hourly | Salary |
| Commitment | Short-Term or Long-Term | Permanent |
The average annual salary of a Senior Software Developer located in San Francisco is $150,000 per year. To compare, the average hourly rate to hire a software developer with the same level of experience from Scalable Path is $55 per hour. He’s how the costs stack up:
Staff Augmentation vs Managed Services
Staff augmentation and managed services are often used interchangeably. In reality, these are two different models. Where staff augmentation enables companies to scale their existing internal team through contractual hiring, managed services is an external service that takes on some or all aspects of a company’s project or department.
Key differences:
| STAFF AUGMENTATION | MANAGED SERVICES |
| Hire professionals to integrate into your existing in-house team | Hire an outside team to build your project or be your entire development team |
| Maintain control of your project | Pass most responsibilities over to the external team/company |
| You, or someone on your internal team, act as the Project Manager to manage the augmented staff | You manage the relationship with the managed services provider |
| Augmented staff integrates with your team, project, and internal processes | Managed services build teams with the required skillset and knowledge to carry out all development |
Managed services is a popular choice for those that don’t have the experience, free time or desire to be involved in the development process. Scalable Path also provides managed services to clients who want more guidance, management, or to hand off more responsibility for the project. We have highly experienced Software Architects and Project Leaders that can act as a bridge between clients and Scalable Path developers. Often, these are clients who need development services from concept stage up to product launch.
On the other hand, a company that has the necessary in-house personnel and wants to be more engaged in the development process is more likely to see staff augmentation as a better solution for scaling projects.
Why Is Staff Augmentation a Good Idea?
When properly done, staff augmentation process is an excellent tool for projects in need of additional resources. If you need to meet an aggressive deadline or quickly expand your team, it can offer a better solution than other hiring models. While there are many reasons to leverage staff augmentation, it’s also important to understand the environment in which it is the right fit. Here are some considerations to help determine if staff augmentation is a good idea for your business:
- It’s hands-on: With staff augmentation, there is the responsibility on the client’s end to be engaged and involved in managing both the project and the augmented staff member(s). Frequent meetings, defining specifications and tasks, reviewing progress, and giving feedback are some of the responsibilities that a client typically needs to take on. It’s not a difficult challenge, but it’s worth considering for those who prefer to be less hands-on.
- Some technical knowledge is helpful: It’s not a requirement to have a technical background, but it helps to at least have an interest in learning about software development best practices. Often, our clients take on the Product Owner role in the Scrum framework and are able to be closely involved and see their project develop in real-time. We usually recommend this approach which allows clients to engage, share feedback regularly, and be involved with their project on a daily basis. As long as you are willing to learn and put in the time, you can take on this role.
- Investing time into onboarding practices: Whether you manage your team or hire a project manager to do this for you, it’s necessary to properly onboard your remote developer. Scalable Path works with hundreds of new developers every year, and getting these individuals quickly oriented and productive is the key to success. The good news is that you can achieve many benefits from an onboarding program without a huge time investment. This article details our stripped-down approach to getting started with remote developers.
Traditional hiring practices aren’t necessarily the default for companies looking to extend their teams anymore. To be agile and cost-effective in 2021, organizations of all sizes will need to consider more innovative and flexible business practices to scale and grow sustainably. Staff augmentation enables teams to quickly respond to the industry’s evolving needs and maintain a competitive edge. Regardless of the type of project or task, you will likely be able to find augmented staff who can meet your requirements on one of the many platforms out there.
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