Most businesses require extra expertise from time to time, whether it’s because they have internal projects that need additional skills or because they have client projects that they don’t have the bandwidth for. At this point, they can choose to contract out the work or hire additional employees. However, there is a third way, one that has been gaining popularity since the early 2000s: staff augmentation.
Most companies understand how to hire: They create a job listing, get resumes, interview suitable candidates, and then choose one. This can take a while, with especially complex positions taking up to 6 months to hire. This is due to the competitive nature of the tech world, and it can result in businesses spending a significant amount. The U.S. Bureau of Labor Statistics notes that IT remains one of the fastest-growing areas of growth. If the hire ends up being a wrong hire, that can cost a business even more, as the work doesn’t get done, and the business needs to rehire with all the expense associated with it.
However, companies choose to hire in because they want substantial control over how the product is made, and it can end up being cheaper than contracting out the position, especially for long-term projects or projects that are directly related to the core function of the business.
Contracting out is a viable option for many, especially for areas of the business that are unrelated to core business functions. This might be anything from contracting out logistics to website design or creating an app to assist the business. Again, this has its benefits under certain circumstances, especially for short-term projects or for anything where the business would need to set up a completely new infrastructure to manage the project. It can also fill a gap temporarily, albeit at a significantly higher cost than it would take an employee to do the same.
Staff augmentation, however, is a merging of the two roles. Rather than the business having to go through the rigmarole of seeking out and assessing hires to fill a talent gap, it hires a team member or multiple team members from outside the company to fill in. This provides greater control over the product, but it also reduces the time spent looking for new hires and significantly reduces HR costs.
There are several ways to handle staff augmentation. In many cases, the team member is based in the same country and possibly even in the same city. They do the work in the office and head home again. However, this isn’t the only way to augment your staff.
As a result, this means the work can be done from anywhere — such as Mexico. This is what is known as nearshore staff augmentation, and it can result in significant cost savings. For all intents and purposes, the staff member is a member of your team, but because they are working remotely in a much lower-cost environment, they end up saving you money on traditional in-country staff augmentation services.
And once the project is done, they move on to another project, likely with a different company.
So with potentially significant cost savings, flexibility and the protections that you’d expect with an employee, staff augmentation services are definitely worth it for those with a short-term (two years or less) project that they need to hire for.