What is the Difference Between IT Staff Augmentation and Outsourcing?

If you’re running a business enterprise that requires more Staff than you currently have, there are two main options to fill your staffing needs: Outsourcing or Staff Augmentation. Although Staff Augmentation and outsourcing sound similar, they are very different, and it’s essential to know the critical differences before making your decision.

This article will let you through the basics of both options and advise you on how to choose the best for your business!

Staff Augmentation – Provides Greater Control

Staff Augmentation is adding additional Staff to an organization to complete specific tasks or projects. You can promote existing employees or hire new ones externally by contracting with outside firms or independent contractors. The main difference between Staff Augmentation and Outsourcing is that the company retains control over the work. In contrast, Outsourcing contracts out all or part of the work to an outside firm.

A Staff Augmentation development company provides dedicated services when you outsource certain parts of your business. As a general rule, these services involve those tasks that are necessary for you but that you cannot perform due to your lack of skills, tools, or personnel.

In Staff Augmentation, companies hire dedicated developers in India to fill gaps in their workforce. Staff Augmentation has many benefits and drawbacks, which we will examine in this article. 

Benefits of Staff Augmentation

• Saves Time

Inherent high levels of efficiency are brought on by employing only those with a deep understanding of project management. It means you spend less time doing work you don’t enjoy, like recruitment and training staff, and more time focusing on other business developments.

• Simple Process

Hiring temporary Staffthrough a contract company is simple when you need a one-time workforce. Suppose your demand suddenly rises for your product or service. In that case, you can scale up to meet that demand by understanding what resources are needed and how many customers are before you employ permanent staff.

• Immediate Access to Experts

Trying to find reliable Staffmembers is a challenging task. Staff Augmentation offers guaranteed expertise without many hassles as it can be difficult to find trustworthy contractors. By hiring expert staffing companies, you don’t have to worry about these issues as their business model depends on your company’s success and reputation.

• Saves Cost

You will hire an experienced team for a few months to cut down on hiring full-time or contracting employees, compensating for costs. You don’t have to pay for the benefits an employer offers, so this saves money in the long run. Plus, Staff Augmentation can be beneficial if your business requires different skill sets periodically, such as during peak seasons or new products, because you won’t have to keep on constantly recruiting and training new people. 

Drawbacks of Staff Augmentation

• It takes time for you and your offshore team to develop trust and understand one another’s cultures

• Time investment is required to train, manage, and oversee your team

When Should You Choose Staff Augmentation?

Staff Augmentation and Outsourcing both prove beneficial under certain circumstances. It is necessary to choose one over the other under specific conditions. For example, when confused between Staff Augmentation and Outsourcing, choose Staff Augmentation under the following scenarios:

• You want to maintain control: When you use Staff Augmentation, your company retains more control over the work being done.

• Need a one-time service for task completion: If you only need a project or task completed once in a while, the Staff Augmentation is perfect for this type of project.

• Few specialized skills needed: If you have an office full of workers with diverse skill sets, but lack someone with specific expertise (or vice versa), the Staff Augmentation can be a perfect solution for staffing needs that aren’t regular or ongoing.

• Project is of shorter duration: A business might not want to hire somebody on a long-term basis when they only need them for six months. It would make more sense to get them on as temporary Staffrather than hiring somebody full-time who would not be able to finish the job within their contract period. 

Outsourcing – Handing Over the Project Completely

Source: Statista – Reasons Behind Outsourcing 

Most people understand outsourcing to simply mean hiring an external company to handle work that could be done internally. For example, if your in-house team struggles to keep up with customer service demand, you might outsource customer support to a call center.

However, Outsourcing also refers to moving an entire department or business function to an external company. The most common examples are human resources, accounting, and IT. In both cases, the goal is to save money by paying someone else to do the work.

Benefits of Outsourcing

• Leverage Skill Diversity

An IT company’s vast array of skills creates an overlapping effect of synergies that is unachievable in-house. When you get a reliable provider, you can attract different people to develop a dedicated development team. Business owners can use other people for each problem or query.

• Reduced Long-Term Costs

You are likely well aware that managing an in-house team is costly. Rates can vary based on industry, but they’re often a fraction of what they would be if they were in-house. Offshore contracted employees are much less expensive due to salary, equipment, benefits, etc.

• Compatible for Projects with a Limited Budget

Even if you can’t get all your technology up to speed quickly or if you don’t have a deep budget, outsourcing some tasks can still reap many of these benefits. If you have enough money for a new server but not enough for a virtualization system, you can use one provider for infrastructure services and another to manage it.

• Affordable Costs

Paying $50/hour for a programmer in California versus $15/hour for a programmer overseas allows your company to work with an affordable budget. It may make sense to outsource development if you have complex systems that internal developers cannot handle.

Drawbacks of Outsourcing:

• Distance does make it more difficult to cope up with real-time challenges

• Meeting deadlines becomes a significant issue with outsourcing

When Should You Choose Outsourcing?

As discussed earlier, Staff Augmentation and Outsourcing are suitable for different kinds of projects. Outsourcing proves beneficial under the following circumstances:

• If you have a project that is time-consuming and repetitive
• When you want to avail expertise in a specific domain
• If your company is engaged in multiple projects at a time
• If your team does not have an adequate number of people to complete the project
• When the ultimate requirements are concrete, measurable, and quantifiable
• When it’s challenging to hire an in-house expert 

Final Takeaways

When discussing IT Staff Augmentation Services and Outsourcing, the key differences lie under control and management. Staff Augmentation offers you greater control over your team members because they are still technically employees of your company.

You have more say in how they work and what they do each day, as well as where they work & how much they work on a day-to-day basis. With that said, not all companies have the same demands for their employees daily; this is why some choose to outsource instead of Staff Augmenting their workforce.

On the other hand, Outsourcing provides you with a complete and final product with little to zero management responsibilities required from your end. Thus, it proves beneficial for those who don’t want to be bogged down by managerial responsibilities but need a specific task done.

The lack of responsibility may also prove problematic for those who need a steady flow of work done on their behalf, like those running campaigns or owning retail shops. To sum up the difference between staffing Augmentation and Outsourcing: augmented workers are your employees, while outsourced workers are an outside entity working exclusively for you.