In the rapidly changing world of high tech, to stay on track, many companies around the world must not only keep an eye on trends but also stay one step ahead. To meet market challenges and remain competitive, both startups and large companies need a wide range of technical talents. Where to get them?
There are three possible ways to address this issue:
1. Establishing a new in-house team consisting of experts with the necessary technology.
2. Training the current team.
3. Finding highly skilled professionals from abroad to expand a current project team.
Usually, in-house solutions have proved futile. What's the mistake? Instead of reaching major business goals, companies focus on what would be easier to solve with an external team.
One of the most convenient models of cooperation with external teams is the staff augmentation with its flexibility and scalability.
Business benefits it brings:
- The advantages of outsourcing and internal hiring, they all blend together;
- Bridging the skills shortage within the team;
- Reducing operational and management costs;
- Bringing innovation.
It's no secret that both large companies and small startups are reluctant to give up control of what is happening in the project. Staff Augmentation provides the project with qualified specialists and at the same time allows management to keep control of what's going on.
Let's go over the basics of what staff augmentation is and how it can streamline the workflow and improve the budget.
What is staff augmentation?
Staff augmentation is an agreement between two companies according to which company undertakes the provision of high-quality services to the other. Only high-skilled individuals are hired and involved.
As a rule, the very first idea of getting augmented emerges when there is a need to fill technical gaps throughout the entire product life cycle but in-house expertise isn't enough.
Staff augmentation is chosen for its two outstanding features:
1. High expertise of augmented team members. To remain highly competitive, they need to improve their skills and be aware of the latest in technology on a regular basis.
2. Fresh eyes and new approaches taken by external experts, which lead to the flexibility and sustainability of a client's project.
Despite the obvious advantages of an extended team, there are still many firms choosing to collaborate with their in-house departments. We feel it is our duty to explain in more detail why a business benefits from working with a dedicated team. Let's head on over to the augmented team types.
Types of staff augmentation
Employees are hired on a contract basis. The duration and objectives of such cooperation may be different:
1. Short-term cooperation: when urgent tasks appear;
2. Long-term cooperation: when the project is complicated, there are a lot of tasks to cover, and there is a shortage of expertise needed.
How the staff augmentation came about
The growth of outsourcing services has led to the emergence of various models of cooperation that can be established between contractors and client companies.
One such model is staff augmentation. It was created in order to simplify the client company's business activities and its technological changes without the need to hire employees on their own or train existing specialists. A great advantage of team augmentation is that the client company has the possibility to rent appropriately qualified employees for a long period of time or for a one-time job.
As a rule, companies spend a lot of time, effort and money on staff training. But there is no guarantee that all the conferences attended can be useful to improve the skills of in-house specialists. Isn't it better to expand the existing team?
Let's take a look at the features of staff augmentation and the main reason for its popularity.
Why are team augmentation services in demand
The main reason for the growing popularity of staff augmentation services these days is what they bring to the table. We are going to bring it up with you a bit later. Now let's move on to numbers.
- The IT Outsourcing market by 2022 will reach $481.27 billion compared to 2015 and will amount to $314.92 billion.
- According to statistics, one-third of all staff in the world is represented by external specialists. Ever since Kelly Services began renting highly qualified specialists in 1946, the idea of expanding the team has gradually developed.
When it comes to the highly competitive IT market, it becomes clear that it is increasingly difficult to retain corporate expertise. There is a risk of losing key specialists at the worst possible time. It is thought that the level of tech specialists’ exhaustion is up to 60%. It can be assumed that almost half of the experts dream of changing jobs. It is important to protect your business from the risk of losing needed specialists. How to do this? You can do it by expanding your team.
Another reason why the staff augmentation is so popular is its cost-effectiveness. When it comes to choosing between the traditional recruitment method and an augmented team, you should know that the first one will last longer. According to Glassdoor, the usual recruitment process takes about 23 days on average.
The traditional recruitment method is not only time consuming but also costly. First of all, the work of recruiters must be paid, as well as targeted advertising. In addition, business processes should be slowed down until the team has the appropriate specialists.
* Just for your information: In the UK, the IT and digital industry is losing around £ 63 billion due to a lack of highly trained personnel.
When it comes to an augmented team, its members have a set of required competencies and skills. What's more, they are ready to get involved immediately. Your job as a business owner is to approve candidates and help them join your in-house team.
The extended team ensures business continuity and helps scale the project team. With an advanced team, you get more for less. But it has to be a well-thought-out step. Even if you have to deal with a crisis, an augmented team of professionals can help you solve your business problems quickly.
Learn more about other benefits of IT staff augmentation.
Staff augmentation services: how it works
So, we've already figured out what staff augmentation services are and why they are so popular nowadays. Now let's find out when it's a good time to expand your software development team.
There may be several crucial reasons to start searching for an augmented team:
- The need to reduce recruitment costs;
- A new project begins with a lack of staff, while in-house specialists have to work overtime;
- Specialists with specific technology stack are required;
- Before launching, the project must be tested by independent experts.
The staff augmentation model applied is divided into three stages:
1. Specify which technical stack or skills are lacking. Find out which experts you really need, which gaps need to be filled. After skill gaps identified, your recruitment team is on its way to finding the right experts or outsourcing the task.
2. Employee onboarding. When the right expertise is in the right place at the right time, it comes to the adaptation stage. At this stage, new employees are introduced to the team, the technical concept of the company, its mission, and its working principles. After all this, they are involved in the work environment.
3. Education and training of experts hired. This stage is mandatory in case of the preservation of valuable assets of the in-house team and ensuring the implementation of an expensive project.
How your business can benefit from IT staff augmentation
As with any collaboration model, this model has emerged in response to ever-growing demand. Let's find out what sparked the interest of both large companies and startups in this format of collaboration. This requires considering the main benefits of staff augmentation.
Time-saving in terms of recruitment
Companies that do not have the necessary expertise are expanding with technical specialists from abroad. These are usually countries with a large number of experienced technical individuals. They can be hired for a relatively small amount because of the low standard of living in their countries.
There is an acute shortage of qualified specialists in rapidly developing areas like Blockchain, Machine Learning, Augmented Reality, Telemedicine, Fintech, and others. Specialists with such a narrow set of skills are difficult to find even abroad, let alone the company you own. The best way to fill in the expertise gaps is to use the staff augmentation services.
Development cost reduction
As mentioned above, the team augmentation attracts employees from countries where the total wages of these employees are much lower than in the country where your company is located. Thus, by hiring dedicated specialists from abroad, the business manages to reduce both salaries and software development costs.
Operating costs reduction
Internal employees are often costly, as opposed to dedicated teams. Although the service provider charges a fee, this fee already includes the cost of maintaining the office. As a result, the cost of staff augmentation services is much lower than for in-house experts.
It is not always possible to provide your experts with a stable workload. Lack of tasks doesn’t motivate them to perform any better. They can leave the company at any time.
To avoid such an unpleasant and, frankly speaking, risky situation, you need to act in the wings with quality solutions.
With remote employees, you always have a deep bench of talent. They can be connected to the project at any stage and disconnected after the project is completed. If necessary, the augmented team can also be involved in a one-time assignment. This can be, for example, creating a website, launching a target page, or developing a specific mobile application.
Now you don't have to worry about unexpected load. All tasks can be solved by an extended team.
You're focusing on business tasks, not getting involved in the bureaucracy
To hire a person, you have to deal with a lot of paperwork, as well as wages, taxes, benefits for employees. If you are going to create a new software department within the company, you need to have an additional legal department or outsourced accounting services. As you understand, this leads to an increase in your budget. On the contrary, staff augmentation prevents unnecessary paperwork and expenses. All legal issues are resolved by the service provider.
When companies work with the same employees for many years, it can provoke the stagnation of ideas. By involving people from different working environments, countries, and even cultures, you can bring innovation to your project and workflow as a whole.
Managed services, project-based outsourcing and staff augmentation model: How they differ from each other
The need for an augmented team arises as soon as you see that the internal development team has become inadequate to meet the challenges and goals.
Staff augmentation as a model of cooperation offers great opportunities for business. If necessary, this model can be transformed into project-based outsourcing or into a model of managed services.
The key factor affecting the choice of management model is the level of project ownership. Utmost care must be taken at this stage. You need to do your homework to make the right choice in favor of a particular model of cooperation. The quality of the product and its timely release depends largely on this choice.
Let us consider the features of these three models of cooperation.
Managed services vs staff augmentation
The key difference between managed teams and staff augmentation is accountability.
A project is called "managed" when a project manager is also hired to work with the team and responsible for its performance. Not only software development is getting outsourced. The client company delegates control over the entire project to the vendor, as well as all factors that may affect the success of the future project. These can be budget and risk management, support, reporting, tracking, and so on.
However, when it comes to staff augmentation, you act as the product owner who is responsible for the project. In this case, the project manager (PM) is on your side; he or she is responsible for how well the augmented team works. PM will ensure that tasks are completed on time.
Advantages of managed services:
- They are cost-effective. Unforeseen expenses are already included in the fee.
- They help the product owner stay focused on business tasks without being distracted by secondary tasks.
Disadvantages of managed services:
- This is a time-consuming model. The client is looking for an augmented team, spending too much time on it.
- Risk of losing flexibility for the client company. Many companies providing managed services offer a standardized approach.
Project outsourcing vs staff augmentation
Project outsourcing, as a model of interaction between client and management team, has become popular in recent years.
Here are a few points that distinguish project outsourcing from augmented staff:
- Control over the project. In the case of staff augmentation, the client is a product owner whereas project outsourcing assumes that the project is now under the control of a dedicated team.
- Teamwork. In project outsourcing, the service provider is responsible for selecting experts and managing the team outside the client company. Any dedicated team means that technical talents become part of your in-house team (remotely).
Advantages of outsourcing:
- Reducing recruitment costs.
- Access to a huge number of qualified professionals not available on the local market.
- Ability to reduce the load on the client company's employees.
Disadvantages of outsourcing:
- Lack of direct control over the development team.
- Potential problems with product quality.
As you may have noticed, before choosing a specific model of cooperation, you should weigh the pros and cons of each of them.
Software development staff augmentation: Key aspects to consider
There are some aspects to consider when planning to hire an augmented team. Let's take a look at them:
- There is a risk that the quality of the product under development will decrease. This may be due to the fact that the invited experts are not yet familiar with the features of the product and how you are used to working. They need time to adapt.
- Any shortcomings in the vendor’s internal processes also affect new technological talents, which does not contribute to the quality of the final product.
- It can take a long time to find a reliable service provider.
- NDA rules and intellectual property protection. Regardless of the type of cooperation, appropriate measures should be taken to protect your intellectual property. You should also sign a non-disclosure agreement (also known as an NDA) with your service provider.
- The service provider acts as an employer for your hired remote experts. Given this fact, the contract should define the areas of responsibility. Ensure that the agreements reached between the participants regarding follow-up actions are correctly understood. Details such as the number of working hours per week, days off, and sick leaves should be agreed upon.
- Transparent financial terms of cooperation. The service provider charges a fixed fee every month as a commission, including salary.
How to start the staff augmentation process
In the software development industry, this process is carried out in a normal way. However, some nuances depend on the legislation and specifics of the financial system of the country in which they take place.
The process of applying staff augmentation services is conducted in three stages:
1. Client’s request submitted to the service provider contains a set of technical requirements, necessary technologies, and programming languages.
2. Negotiations are held during meetings, by email and phone calls. After the main points are discussed, the service provider selects the best technicians and arranges interviews.
3. The client company enters into contracts for staff augmentation services. According to the contract, any code built by third-party programmers becomes the property of the client.
A team extension is a convenient solution to increase staff flexibility within the client company and launch new ideas or quality products as soon as possible.
Why choose DDI Development for staff augmentation
All things considered, each company can make the most of augmented team services. This model of cooperation makes it possible to cut costs and, at the same time, allows the client company to keep control over the project.
All you need to succeed is to expand your team with an augmented team. The DDI Development company is experienced in providing dedicated team services. Moreover, as part of one of these arrangements, our specialists have been temporarily relocated to the client's office for a deeper immersion into the project and thus for productive work and desired results.
We also have a successful experience working as an augmented team. Now we’re convinced that we will be able to integrate into your project team as quickly as possible to boost your business.
Just take a look at How we work.
What we offer:
- A deep pool of talents in subject areas;
- Availability for long-term and short-term cooperation;
- Management solutions to help cope with project planning, team members adaptation, work process optimization;
- The scope of the paper and legal work is resolved by the DDI Development team.
Business tasks to start applying staff augmentation:
- Solve technical issues in the shortest possible time and in a cost-effective way;
- Reduce software development costs;
- Strictly adhere to deadlines;
- Act within budget to achieve specific objectives;
- Apply top-notch technology.
If you have any clarifying questions, please feel free to ask them. We are here to help you.
As the history of using staff augmentation for almost 100 years shows, this model of cooperation has proven to be viable and profitable for the business.
There are several reasons for that:
- By expanding your team with technical talents, you achieve your goals and launch more and more innovative products. It also helps match your market-oriented approach.
- With the staff augmentation available any time, you no longer need to spend time and money on urgent recruitment.
- Even high competition for experienced staff will not be a stumbling block for you.
When you know for sure you need an augmented team, just start working with it. What kind of team it can be and how to initiate the process is described above.
You can contact us anytime to discuss the details of future collaboration.