What Is Staff Augmentation?

Although staff augmentation is an important tool in any organization’s arsenal of tools, not everyone understands the differences between the types and how to choose the best model. This is the best place to start.

The dramatic rise in contingent workers within organizations is one of the most important trends in business today. This practice isn’t necessarily new. It started when administrators were temporarily substituted for their staff due to illness, vacation, or other reasons. Contingent work is a variety of working models today, with the most popular being staff augmentation.

Staff augmentation is very common. The global staffing industry is one of the main suppliers of staff augmentation talent and is estimated to spend $490 billion annually. Freelancing is another source of staff augmentation talent. Although it has been around for centuries, it gained popularity with the advent of global freelance platforms. Freelancing is a popular form of work in America, with 34% of workers doing it today. This number is expected to rise steadily over the next decade. Check out the reasons why IT projects fail.

Pros & Con of Staff Augmentation

Like any other organizational strategy, staff augmentation has its pros and cons. Individual hiring managers and project managers will decide if staff augmentation is right for them. This table might be helpful:

Types Of Staff Augmentation                  

It is important to know the differences between staff augmentation types when you are thinking about staff augmentation.

Staff Augmentation Services

Engaging staff augmentation talent is possible in many ways. The specific needs of your company will determine which one is best.

Selecting the right staff augmentation model

Many organizations employ a variety of providers depending on their needs. It is important to know what you want to accomplish when you consider staff augmentation. If you’re looking for a machine learning expert (a high-demand skill), prioritizing costs will not be feasible. You won’t hire people whose skills are not sufficient to perform a task. There are many options for staff augmentation. Before you make a decision, weigh the pros and cons.

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What is the right model for staff augmentation? Three Misunderstandings and 3 Considerations

Consideration #1: Project Length

An arrangement for staff augmentation can be a great way to meet unique needs of your organization. It is not the best solution for every situation. Staff augmentation works best for short-term projects. Long-term projects can take months or even years to complete. An enterprise could still consider employing a contingent worker for longer projects. In this case, an outsourcing arrangement is a better choice than a staff-augmentation model. Staff augmentation providers will often be open to negotiating such agreements.

Consideration #2 – Secrecy

Some projects have a clandestine character and may involve intellectual property (IP). These cases warrant careful evaluation of staff augmentation options. The rationale behind this decision is often more due to psychological comfort than hard evidence. An agreement with a contractor is just as bulletproof than one with a full-time employee. Notable is the fact that one of history’s most notorious data leaks was led by a subcontractor, who was previously employed at a Tier 1 service firm but is now living in Russia under asylum. It is important that organizations take care when hiring top-secret staff.

Consideration #3 – Ramp-up time

Companies report poor processes when managing contingent workers (see graph below). This could be due to misinterpretations of context.

In an enterprise setting, context is beneficial. It’s a deeper understanding of the inter-functional relationships. The interplay between ramp-up and context (how an employee gains context) is important to consider. For projects that require high levels of complexity, a staff augmentation model might not be the best option. This could mean a long ramp-up period (although this can sometimes depend on the competence of the potential augmented staff member).

One major semiconductor company lost months of costs for augmented staff because the job required such complexity. They suffered a loss of nearly 50% in cost. Half of their contract time was spent on ramping up the context.

Misunderstanding #1 – Staff Augmentation for Cost Avoidance

Many hiring managers think they can avoid the costs of full-time employees by using augmented staff. This is a mistake and a reason to not hire augmented staff. The staffing company is responsible for benefit costs. These are then factored in to the quoted rate. This can lead to increased costs for staffing when full-time employment is more appropriate.

Misunderstanding #2 – Staff Augmentation is More Expensive

This second misconception is simple and still causes problems for many employers. The misperception that augment staff are more expensive than full-time employees is the root of this problem. They reason that a $50-per-hour contingent worker is more expensive than a full time employee.

Employer burden is the mistake. Employers worldwide spend an average 23% to keep a $100,000-per-year full-time employee. Some countries see that percentage rise to 30-50%. This includes benefits such as matching, health insurance, and 401K. It also covers ongoing training. These costs are considered in order to show the financial benefits of hiring augmented staff.

Misunderstanding #3 – Staff Augmentation vs Managed Services

Many of the terms used in staffing are relatively new and can become confusing. This creates a common misunderstanding between staff augment and managed services.

Managed service involves a final deliverable and possibly a quality rating. Staff augmentation is a job description that is paid on a time- and material basis. A managed service approach might allow an augmented staff member to be hired to write lines code for a particular application that is unique for the company. They would be paid hourly. To create the application and meet certain KPIs, a managed service contractor would need to be hired. They would then be paid after the project was completed.

Staff Augmentation – A Cross-functional Strategy

Organizations can use staff augmentation to improve agility and adapt to changing business needs. It is being used across all industries. It is being used more frequently for roles such as R&D, Operations, Finance, HR, and many other functions (see figure below). It is important to consider the importance of augmented staff in enterprises now and in future when considering moves by industry giants such as Google, which acquired Kaggle, a network of freelance/contract data scientists in 2017.


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