The business methods are evolving with the uprising of newer technologies and that’s why it becomes crucial to select the right team of employees. Recently, we have seen two new ways of hiring: staff augmentation and outsourcing, which have become popular buzzwords. In the IT industry, both these methods of hiring offer unique advantages and are often considered for different needs. But which way of hiring is right for your business depends on a lot of factors. In this article, we will go through various aspects of IT staff augmentation and outsourcing hiring methods and identify which approach to hiring would be right for your business.
What is IT Staff Augmentation?
IT Staff Augmentation refers to the usage of outside resources on a contractual or temporary basis to augment the requirements of your organization. IT staff augmentation is required for increasing capacity, specialized skills, a bridge to provide capacity, and certain other scenarios. It helps in managing workload fluctuations or tackling short-term projects.
Advantages of IT Staff Augmentation:
Do you know that the global spending on staff augmentation will reach around $81.87 billion by 2025?
Here are the major advantages of IT Staff Augmentation :
Flexibility :
With IT staff augmentation, you get the flexibility to scale your workforce as per your requirements. You are not mandated to hire full-time employees and can quickly adapt to short-term project requirements.
Cost-Effective :
IT Staff Augmentation is a highly cost-effective solution in comparison to maintaining a long-term permanent workforce. You can achieve higher cost benefits in terms of hiring, training, and infrastructure costs.
Specialized Skills :
With IT Staff Augmentation, you get access to a wide pool of talent with specialized skills and expertise that is not possible with an in-house team. Thus, organizations can take on complex projects without worrying about extensive training.
Speed :
You require much less time to recruit people through a staff augmentation approach. It is a rapid recruitment process which also reduces the time-to-market for projects.
Disadvantages of IT Staff Augmentation:
There are minor disadvantages associated with the IT Staff Augmentation approach. These are:
Management Overhead :
There must be effective coordination between the in-house team and the augmented team for successful projects. Thus, you may be required to put extra effort into seamless coordination.
Privacy Issues :
There can be data security concerns as you must be sharing the sensitive data of your company with external people.
However, both of these issues are easy to manage by managing communication and signing NDA between the involved stakeholders.
What is Outsourcing?
In the outsourcing of IT projects, an organization gives the contract of their IT project requirements to a third-party outsourcing company. This third party is now responsible for the overall delivery of the requirements within the specified deadlines.
Advantages of Outsourcing
You would be surprised to know that global spending on outsourcing will reach $1.1 trillion by 2025. Here are the major factors behind such interesting statistics:
Expertise and Specialization:
Outsourcing has expertise in the services they are offering. They hire skilled staff and further improve the skills of employees through training and programs. By outsourcing, you are giving a contract of your project who knows better than you about the skills and technologies required for that project.
Focus on Core Competencies
As a business, you must follow the core competencies of your business instead of the cumbersome IT nomenclature and technologies. With outsourcing, you delegate your IT requirements in the right hands. It leads to higher efficiency and helps you get an edge over your competitors.
Access to Global Talent
With outsourcing, you get access to a global talent tool. You can tap into the specialized skills and expertise which may not be present in your country.
Cost Effective
If you outsource your project to a third-party company situated in countries like India, Malaysia, or Singapore, you will realize that the costs are much lower but the quality is instead better.
Scalability
Outsourcing partners can scale their resources up or down quickly, as per your business requirements.
Disadvantages of Project Outsourcing
Outsourcing also has certain disadvantages:
Less Control
Generally, an outsourcing company works on multiple projects. Also, they have their own methodology, approach, coding standards, etc. to work on projects. Thus, you will have less control over the development, progress, and troubleshooting.
Communication :
The company to whom you have outsourced your project may be located in any other time zone. In such cases, communication could be an issue.
However, companies like us assign a project coordinator who provides regular updates on the projects, whatever the time zone of the client is.
When to choose Staff Augmentation?
Here are the major scenarios when you should go for the IT staff augmentation services:
Flexibility and Scalability :
If your business is looking for high flexibility and rapidly scaling up and down its operations then staff augmentation will be the ideal choice. Whether you require a workforce for a short period of time or for a prolonged period, you can adjust your team accordingly to your requirements with staff augmentation.
Short-term Skill Gaps :
If your existing team is not having certain skills required for a project then you can fill those gaps with staff augmentation. Thus, you would be able to complete that project without long-term hiring.
In-house Control :
Although the resource may work remotely, it would be your dedicated resource. Thus, you can integrate your augmented resources into your existing teams. This will give you control of in-house resources who work solely for you.
Cost-Efficiency :
Staff augmentation would be highly cost-efficient if you are looking for short-term or sporadic resource needs. You have to pay for the additional expertise and no expense will occur for hiring, training, or other overhead costs.
Project-Based Work :
Sometimes, staff augmentation is an ideal choice for projects with evolving requirements. In these projects, the workload fluctuates frequently. With staff augmentation, you can adapt to the changing requirements.
When to choose Outsourcing?
The major scenarios when Outsourcing would be an ideal choice for your business are:
Clear Requirements :
It is better to outsource projects if your requirements are well-defined and have a well-documented scope of work. Outsourcing is greatly effective for fixed-price projects with a set timeline and deliverables.
Cost Predictability :
The third-party outsourcing company will provide you with the exact cost of developing your project along with the deadlines. It is beneficial to manage your project carefully without unexpected cost overruns.
Specialized Expertise
If your project requires special expertise, such as AI development or mobile development, it is best to outsource it to an outsourcing company with expertise in that area.
Focus on Core Competencies
As we mentioned above, outsourcing does not require you to take responsibility for your IT requirements. Instead, you can focus on your core competencies.
Wrapping Up
In this article, we have discussed the multiple aspects of IT Staff Augmentation and Outsourcing. One thing is common: They are better than in-house hiring. We provide both IT Staff Augmentation and the best outsourcing services. Let us know your requirements.
