Outsourcing is certainly not a new concept in the IT industry; however, it is one that has garnered attention as of late. A recent Statista report revealed that the global IT staff augmentation market in 2019, prior to the COVID-19 pandemic, was $92.5 billion. Today, the market size has grown to roughly $132.9 billion.
Rapid changes in workplace policy have inspired many businesses to hire remotely to improve operational efficiencies and reduce costs; although, hiring highly skilled in-house staff can be a favorable alternative in certain situations. Here is a look at how these widely-used delivery models compare.
What Is IT Staff Augmentation?
Businesses that need assistance completing important IT projects often seek help through staff augmentation. This common delivery method is a type of outsourcing that uses temporary workers to fill short-term job positions within a company. With outsourcing, a business is purchasing a specific, prearranged outcome and is sharing the risks with the vendor.
IT staff augmentation is a remote hiring process that may involve the temporary hiring of various skilled IT professionals, such as web developers, software developers or software testers. Staff augmentation enables companies to add talented workers to their team based on the skills and experience needed to perform a particular task or to meet current business objectives.
The vendor or IT partner offering the staff augmentation services plays a direct role in the official employment of workers. They are also responsible for other aspects of hiring, such as insurance and taxes for the remote staff.
Staff augmentation may be short-term, such as when there is a need for specialists or when in-house specialists are unavailable. These services may also be long-term to accommodate longer projects, when there is a skill gap or when businesses have difficulty finding or retaining in-house IT staff members.
IT staff augmentation can be broken down into three main categories. These include:
- Commodity – Commodity workers are sought when a business requires a reliable workforce but does not need a particular skill set.
- Skilled – Skilled workers may be necessary to complete more complex tasks but the level of these skills is not crucial to the completion of the project.
- Highly Skilled – Highly skilled workers may be required for the completion of important IT projects that require advanced skills, significant training or a specific educational background.
What are the Benefits of IT Staff Augmentation?
It is important to fully understand the benefits of IT staff augmentation before deciding to outsource. Through IT staff augmentation, businesses can utilize the skill set and experience of outsourced talent on an as-needed basis, while still managing workers directly. Here is a look at some of the top benefits of hiring a temporary staff:
Fill Skill Gaps in the Workforce
The ability to hire skilled workers based on needs is a major benefit of IT staff augmentation. There often comes a time when a business experiences gaps in their IT workforce that needs to be promptly filled. Hiring an in-house employee to take on this role is not always cost-effective, especially when the need is temporary. With IT staff augmentation, businesses can hire tech talent possessing specific skills or training to join an in-house development team on a short-term or long-term basis.
Save Time on Recruitment
Businesses that choose IT staff augmentations services can also save significant time by eliminating the recruitment and employee hiring processes. It can take a considerable amount of time to create detailed job listings, interview potential candidates and review the paperwork necessary to hire an in-house employee. IT staff augmentation is a streamlined process that makes it fast and easy to get the talent needed to complete IT projects.
Only Pay for Services You Need
What makes IT staff augmentation services so effective is that they allow businesses to only purchase the services they need. IT professionals are in high demand, making it difficult to attract and retain top talent. With IT staff augmentation, businesses can enjoy fast access to trained and experienced technology experts who can immediately fill a temporary role and deliver a high degree of knowledge and experience.
Maintain Control Over Employees
Many businesses err on the side of caution when outsourcing work because they do not want to let go of control over their workforce. IT staff augmentation allows business leaders to maintain control over their existing staff, even when specific tasks are put in the hands of a third party. IT staff augmentation also allows employers to choose which temporary workers they want to work with, maintain control over who leads the project and determine how tasks should be prioritized.
Simplified Exit Strategy
One of the biggest challenges that businesses face when hiring in-house staff involves ending the employer-employee relationship. Businesses are always at risk for legal action when they choose to terminate an employee, even if they reside in a state where non-contractual employment is considered “at-will.” IT staff augmentation is typically project-based, meaning the temporary worker willingly leaves the relationship when his or her services are no longer needed.
How Can IT Staff Augmentation Help a Business?
When deciding between IT staff augmentation and hiring additional in-house staff, it is important to consider how staff augmentation services could help the business. First, take note of the flexibility that staff augmentation offers to companies that require fast access to IT professionals to meet their short-term or long-term staffing needs. Flexible hiring prevents businesses from incurring additional costs, such as those associated with permanent hiring.
Businesses that outsource their IT professionals can also choose from a larger talent pool. Firms that offer staff augmentation services generally consist of a large pool of highly skilled and experienced professionals who have training in many areas of IT. Business leaders can engage with these professionals to ensure that they have the skill set and training required to take on the current project. Having a team of highly qualified IT professionals can also give businesses a competitive edge.
Companies that choose IT staff augmentation may also experience greater operational efficiency. It is not uncommon for businesses to incur high operational costs, especially during lean periods. Choosing a flexible working model, such as staff augmentation, enables these businesses to only hire staff when they need the extra help, leading to a reduction in operational costs.
When Should Businesses Hire In-House Staff?
Nearly every modern business model depends on technology to maintain an efficient and productive work environment. Having a team of experienced in-house employees on-site can be highly beneficial in certain circumstances. Businesses that choose to hire additional in-house staff to meet their ongoing IT needs can enjoy benefits such as:
Deep Understanding of the Business
In-house employees that work for the same organization day-in and day-out tend to have a deeper understanding of the business’s core goals and daily processes. They know how to use the current technology, such as computer systems, and have established relationships with other employees and team members. In-house staff is also highly driven to succeed and know how to access resources to create solutions that help grow the business.
Another major benefit of having in-house staff is the ability to quickly call on an IT professional whenever a problem arises. While augmented staff members are also fast to respond, in-house IT professionals are normally on-site throughout the work day and can start working on issues immediately. Speedy response times can help reduce downtime and lessen the potential damage that IT problems can cause.
More Control Over the Workforce
In addition to a speedy response from in-house staff, businesses that hire additional IT professionals can also maintain their control over their workforce. When a business chooses to invest in IT staff augmentation, they are forced to give up some control when temporary workers fill positions. When businesses choose to hire additional in-house staff, business leaders can enjoy the peace of mind that comes with having full control over all aspects of training, operations and project management.
Of course, there are also some disadvantages of hiring in-house IT staff. First, it can be expensive to keep experienced IT professionals on the payroll. Businesses must also factor in the cost of onboarding, ongoing training and employee benefits including health insurance and retirement. According to PayScale, the average IT manager has a salary of more than $85,000 per year; funding a competitive wage can become quite costly in the long term.
Talented IT professionals are also not always available. In fact, these high-demand IT experts are hard to come by and many businesses have difficulty attracting and retaining in-house staff. When there are not enough staff members to deal with critical software updates or customer support tickets, the business can quickly fall behind leaving consumers unsatisfied with the service, resulting in a negative impact on the reputation of the business.
Many businesses also find that they do not need in-house IT staff to work a typical 9-to-5 workday. Some companies only need access to technology professionals when a tech-related problem arises, such as a computer breaks down or a software issue unexpectedly develops. These types of problems can occur at any time, including at night or on weekends when a typical in-house employee would not be available.
Work With Experienced IT Professionals
There is an ongoing struggle to find qualified tech workers, especially software developers. In fact, these in-demand specialists have a historically low unemployment rate of just 1.9 percent, according to the U.S. Bureau of Labor Statistics. Traditional hiring practices are not suitable for all businesses, making alternative delivery models like IT staff augmentation a more favorable option.
For more information about how IT staff augmentation works or to schedule a consultation with a leading software development team, contact the IT professionals at Orases today.