May 8, 2024
At Accelerance, we search the world for the best software development firms that handle outsourcing projects, pairing them with our customers who are looking to take advantage of the many benefits of outsourcing.
We believe that partnering with a software firm with a track record of successful delivery in the type of software development that you need, is the best way to supplement your in-house development.
But there’s another approach to building an IT workforce that is commonly used - staff augmentation. This involves hiring contractors to fill short or long-term positions in a company. It's very common in the tech world, where companies contract agencies to provide external software engineers or augment their workforce.
IT staff augmentation is big business. The global IT staff augmentation market will add $81.9 Billion USD in value by the end of 2025, growing at a rate of 3.5% per year. We believe this model of developing your IT workforce has merit and can be highly effective in certain circumstances that allow staff augmentation to play to its strengths.
When you require direct control and transparency
With staff augmentation, it is up to you to recruit, vet, induct and manage contractors. You may use recruitment firms to find people with the right skills and experience, but then you are responsible for entering into contractual arrangements with these contractors and integrating them into your software development team.
That can involve a lot of work but is a valuable approach if you want ultimate control over exactly who is working on your software development projects. Your business may have particular health and safety, or regulatory compliance requirements that requires you to get really hands-on in the management of external contractors.
Staff augmentation is suitable for an organization that has very robust recruitment and induction policies because you are essentially going through the same type of process as if you were hiring in-house staff. The overhead associated with that shouldn’t be underestimated.
Hired guns: access to specialized skills
Sometimes you don’t need to recruit a team, just a few talented individuals bringing with them skills you are currently lacking. That’s where highly targeted use of staff augmentation comes into its own - as long as you can find the right recruits.
It reduces the overhead of employing these individuals compared to an outsourcing arrangement and allows you to tap a pool of talent made up of talented free agents, who prefer the contracting life as opposed to working permanently for a software development firm.
It can be really difficult to recruit a large team in a very specialized area, such as software for medical devices, or blockchain applications. You may be better off working with a recruitment company that specializes in these areas to find the right people and integrate them into your team as contractors.
Flexibility and scalability
Software development projects can vary greatly in scope and duration, often requiring teams to adapt quickly. Staff augmentation offers the flexibility to adjust the size and composition of teams as projects evolve.
This scalability ensures that companies can respond to changes in project requirements without the delays associated with traditional hiring processes or the rigidity of fixed professional services contracts.
Let’s say you have a scrum master who abruptly resigns. No one else in the team is able to step up and fill that role. You could get a contractor in on a short-term basis until you find a permanent replacement. That’s where staff augmentation offers a lot of flexibility.
Integration with existing teams
Staff augmentation, when done properly, can facilitate effective integration of external professionals with existing in-house teams. That’s because everyone is literally part of the same team culture, managed by the same people, even if they are separated by geography.
Augmented staff can work alongside permanent employees, sharing knowledge and collaborating directly. This integration is crucial for maintaining a unified team dynamic and ensuring that all members are aligned with the project’s goals and company culture.
It works well - in theory
I’ve seen organizations employing several hundred contractors in a staff augmentation model, where the people have come in via several different recruitment agencies. It works well because the hiring organization is willing and able to commit to the day-to-day management of these contractors.
I can’t overstate the importance of the onboarding process in staff augmentation arrangements. Getting new recruits on the same page, integrated into the team, and up to speed quickly is the key to benefiting from what this model has to offer.
Staff augmentation - it has its challenges
While staff augmentation offers numerous benefits, it also comes with challenges that can end up costing you more in the long run than working with a quality software development outsourcing firm.
It comes down to your appetite for managing contractors, a job that can become increasingly complicated as the roster of contractors grows. The incentives that drive recruitment firms don’t necessarily deliver you the best recruits. Their role is to get bums on seats so they can earn their commission, whereas a software outsourcing team has been subject to a partner’s recruitment processes and their suitability to your project has been assessed in-depth.
Staff augmentation stands out as a highly effective strategy for software development outsourcing in certain circumstances. It combines the benefits of traditional outsourcing—such as cost savings and access to a broad talent pool—with the advantages of maintaining control over the development process and integrating external talent into in-house teams.
As companies continue to seek flexible and efficient staffing solutions, staff augmentation is likely to play an increasingly important role in the global tech industry alongside software outsourcing.
In part 2 of this series on staff augmentation, I’ll outline effective strategies for mitigating risk in staff augmentation arrangements.
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