If you are running a business, you may find staff augmentation to be a good practice. Also referred to as contract engineering, contingent workforce hiring and on-site design services, it is an outsourcing strategy that can staff projects and responds to business goals. This technique involves the evaluation of the current staff in order to determine which added skills are necessary.
An obvious advantage of this technique is that it can leverage resources. It can also utilize contract workers and outsourced services. Its primary objective is to deal with the staffing requirements in the company.
According to statistics, this industry has reached about $45 billion in 2015. The advancements and ubiquity of information technology resources as well as the narrowing margins and declining rates of companies in need of these services have brought about the demand for staff augmentation.
Staff augmentation in the field of information technology (IT) entails the allocation of technical resources, which are typically offshore. It is also a service in which the provider augments the workforce of the client with skilled persons. However, it is still the responsibility of the client to deal with the staff as well as the work that they do.
Software developers are usually hired, depending on their technical background and skill set. Through these staff augmentation services, companies that may need application development on various technology verticals can take advantage of a one-window solution.
At present, nearly every company that specializes in IT uses staff augmentation to create their products. Some of them use it as a strategy while others use it as a tactical measure. Nevertheless, engineering organizations optimize it for better business results.
Benefits You Can Get from Staff Augmentation
Your company can benefit from this strategy in a variety of ways, such as the following:
Only a few companies are able to afford the requirements of engineering organizations for the purpose of meeting high demands with internal resources. A lot of successful companies make use of strategies in which they form an engineering staff to a level of 85% of their peak needs. The other 15% is taken from Service companies that offer adept engineers who possess the necessary skill sets for a variety of projects.
You have to note that success can be achieved when you are able to identify the core competencies of the products being developed as well as hire the services of engineers who have the right skills for building internal organizations. The rest of your needed resources can be outsourced externally.
One of the most common mistakes that people make when comparing the costs of internal resources with resources that are brought in from another company is the cost simplification. You should not only consider the salary and the rates of external resources. Instead, you have to consider the payroll taxes, salary, vacation, cost of benefits, employee utilization factors, and costs that may possibly be involved in downsizing.
Staff augmentation is also ideal for situations in which companies are not completely sure if they should allow themselves to grow or consider downsizing. The companies that have this problem may still need to hire more staff for a short-term basis in order for them to produce the products to be sold on the market. It may not be ideal to hire permanent or long-term employees due to the risks involved. These companies may have issues with regard to public relations and finances.
A company in need of specialized skill sets for finite projects may not be in favor of hiring new employees or training their current ones for such projects. So, what they can do is augment with contract engineers who already have the knowledge and experience necessary for the task.
Having resources like this allows the company to pursue the project without experiencing any hassles or delays.
For example, a small company that needs to develop integrated circuit devices within twelve months can resort to staff augmentation instead of hiring new people or training existing employees who do not have much knowledge on the subject. Hiring and training employees would only cost the company a huge sum of money.