Guide to Staff Augmentation: What, Why, and How
Staff Augmentation may be a relatively new term, but its application is as old as time. This workforce management model has been used since humans started offering their skills to other people and businesses in exchange for necessities like food and shelter.
IT workers are the ones we should be thanking for making staff augmentation popular. Because of the IT industry’s heavy reliance on specialised skills and project-based nature, talent has been employed temporarily in this sector forever. Initially, these projects were focused solely on software development. But now projects include app development, UI/UX design, machine learning, animations and more.
This term has recently garnered attention from other industries, too. Today's most popular sectors that benefit from staff augmentation are marketing, operations, customer service, finance, and supply chain.
You don’t have to work in IT to take advantage of this workforce management model, though: the need for it grows stronger with your business’s dependence on technology. Even if you’re working in an industry as old-fashioned as brick-and-mortar retail stores, you still need to outsource technical aspects such as technical training, networking, and maintenance to contractors or temporary employees.
In cases like these, where you require tech expertise but aren’t ready to commit long-term or pay full-time rates for a professional support team, staff augmentation can come into play. Here’s everything you need to know about it to decide whether it’s right for your business.
What is Staff Augmentation
Staff augmentation is an exciting idea. You can hire people temporarily for your projects. It’s a quick way to ensure you have the right person for each job. But where do these people come from? When a talent agency trains a bunch of these people in specific skills needed by an industry, businesses can borrow these workers from them. But it doesn’t end there; many ways exist to provide this service to different companies and vendors. Sometimes, the vendor handles everything from hiring to training, but other times, the client will be responsible for paying those costs.
When to Use It
As mentioned earlier, businesses use it for short-term purposes. Here are the four scenarios that lead firms to take this route:
Increased Demand
When an IT or any other organisation faces excessive customer demand to achieve a production target, staff augments to fill the short-term talent gap. The business will analyse the talent demand, ranging from unskilled to highly skilled Labour. Augmentation needs to focus on the timely delivery of services rather than on costs or quality.
Note that this solution is only suitable if the business is facing a temporary hike in demand. If the increase is permanent or is anticipated to recur more frequently, the company may want to hire permanent employees.
Bridging Talent Gap
This is the second most commonly quoted reason for hiring temp staff from talent agencies, and it usually appears in IT or financial industries. Only highly specialised staffing firms can offer these services. The client rests assured about the quality and talent acquired from these agencies but can’t negotiate the cost much.
In this scenario, the business must consider the time and cost spent to induct these employees. If the hired specialised talent pool makes up a significant portion of the resulting team, it may impact team culture and decrease efficiency. In that case, it wouldn’t be best for immediate projects.
A Complete Workforce Model
For startups and project-based businesses, staff augmentation can be the complete workforce model, mainly when they are located in the IT industry. Frequently, these businesses must balance talent availability, cost, and quality by developing long-term relationships with skilled personnel or teams.
Part of the Recruitment Process
Those businesses working with highly specialised skills and cannot afford to disrupt their culture would go with staff augmentation as a step toward recruitment. It allows them to vet reliable professionals while eliminating the cost of scrutinising talent from their budget.
Of course, the talent will cost more during the testing phase to compensate the vendor for their costs in hiring and training the employee.
Pros and Cons
It’s apparent that staff augmentation is a short-term solution and is not feasible for businesses that demand reliability or depend on their work culture. Companies must consider some advantages and disadvantages of this model when deciding to satisfy their operational needs with temporary staff.
On-Time Solution
It helps the business acquire the right talent at the right time. The talent outsourcing agencies are responsible for retaining and training this staff, so the risk of non-engagement rests with them.
No Hiring and Lay-off Costs
Businesses cannot recruit full-time staff to fill temporary positions because of high hiring costs and the legal and contractual costs of laying off these employees after project completion. Staff augmentation helps with saving these costs.
Low Training Costs
Staff augmentation keeps knowledge acquisition costs low for projects that demand highly specialised skills. It allows the business to rent the skills from outsourcing agencies.
Internal Acceptance
High-skilled temporary workers are more accepted within the organisation because the internal staff knows they aren’t there to steal or replace their jobs.
Cultural Debt
This is a disadvantage of staff augmentation. New staff take time to blend in with the existing workforce and culture, and they may never fit well and disturb the culture.
Less Reliable
First, this talent acquisition model renders the business dependent on external organisations or IT staff augmentation services providers. The company will be directly affected if the vendor changes their service terms.
Secondly, the staff may also pose an unnecessary turnover threat, especially if the need lasts longer than a few months.
Potential Loss of Internal Knowledge
Businesses will witness that they cannot trust the outsourced staff with their internal knowledge resources and project details because of potential threats to these critical intellectual resources.
Quality Control
Most businesses build long-term connections with staffing service providers. For companies highly dependent on flexible staff, these long-term contracts become necessary to maintain these providers' reliability.
Suppose your business’s needs are genuinely short-term, and you don’t anticipate recurring projects for staffing providers. In that case, you may have to spend considerable time vetting the right service provider before scrutinising the talent.
Types of Staff Augmentation
Once your business has gone through these pros and cons and understands its situation is suitable for the solution for staff augmentation, it would like to learn the type of augmentation it will need. Selecting the right kind is critical to finding the perfect talent and culture fit for your business. Here are the three types of augmentation you will find on the market.
Commodity
These are the most generic workforces available from talent providers. This category includes manual workers and labourers. The business can also search for them in the local market to save on commission costs for the intermediary agency.
Because of their low skills, their cost of contracting and retention are low, but it’s evident that they are only suitable for the most simplified projects. Businesses can’t expect quality, and turnaround times can be high.
Skill-Based
This second category boasts semi-skilled labourers or staff. These professionals will have generic skills in specified fields. For example, a supply chain skilled worker can be expected to communicate with various parties, maintain quotes and communication records, and assist decision-makers.
Businesses often feel the cultural impact of staff with this level of skill. The cost of talent acquisition will represent this concern and may prompt firms to seek help from intermediaries.
Highly Skilled
As the name suggests, the talent for this type of staff augmentation is highly skilled. The hiring business ensures these skills in its employees by hiring them through IT staff augmentation agencies. The costs related to these acquisitions are high, but these agencies guarantee quality.
Types of Staff Augmentation Services
After determining the skill level you want for your business, consider the type of augmentation service your business will benefit most from. These types will depend on the autonomy and control you want for the talent versus the maintenance costs you plan to spend.
On-Site Staff Augmentation
This arrangement requires the staff to be present on the premises of the hiring business. The client enjoys more control and speedy communication with the staff but has to bear the onboarding cost. Significantly, the acquired talent’s impact on the internal culture of the business will be remarkable.
Remote Staff Augmentation
Nowadays, this scenario can include two types of arrangements. First, the hired staff may work from the office of an outsourcing agency. This model applies to the financial industry. The second type of work arrangement allows the staff to work from anywhere they want. This nomadic work order is prevalent in most industries these days.
Project-based Staff Augmentation
Organisations use this system when they want to complete a project and need specialised skills. It always starts with defining the scope and duration of the project. In most cases, skills are the only Slack resource for this type of talent outsourcing.
Team-Based Staff Augmentation
This is the fourth and most elaborate outsourcing talent in the modern world. It resembles the previous arrangement in that its primary need is a highly specialised skill set, and it starts with defining the scope and duration of the project.
At the same time, it is different from a project-based system because organisations are forced to hire a whole team for the project with the right mix of talents instead of hiring individual personnel. These teams are a boon to the IT industry because the clients don’t have to worry about the team formation phase before starting the project.
How to Choose the Right Staff Augmentation Agency
If you are sure that you will need staff augmentation to fill your talent gap, you should proceed with this option with the following steps:
Determine Your Needs
The first step in utilising this option lies in determining your business needs for augmentation. Study the skill gap. What is the desired level of skills in your employees? Will they be onboarded with your existing employees, or can they work independently under a separate, ad hoc department or shift?
Next, ask around the scope of work that requires extra staff. Question: Can the required skill be found in-house? If yes, you may have to bring the additional employees into the organisational culture, allowing team building and onboarding costs to become necessary.
How long will the project last? As a rule of thumb, any project that lasts around a year or more should get permanent staff.
Consider Data Security
Most highly specialised projects include the intellectual property of the owning businesses. These may consist of the business idea, user information, marketing data, or simply the technical details of the competitive advantage of the product being developed.
The management must consider the significance of these knowledge resources for the health and longevity of the business. If these secrets are of tactical importance, they could be shared with the external team after signing a non-disclosure agreement (NDA).
Sometimes, the importance of this information demands more consideration from the business. In those cases, businesses will either select temporary staff from a trustworthy staffing agency, which would involve legal documentation and consequences, scrutinise the staff for their backgrounds in ethics, or simply keep the matter in-house.
In many cases, the risk of leakage of sensitive information cannot be entirely mitigated.
Other Concerns
Time, scope, and security of the project are primary concerns you should have while deciding the correct route to IT staff augmentation. Still, other problems may also determine the service provider you will choose. For example, the business may want to keep the project in-house, raising retention costs. Your company may also want to save on team formation costs, and it will do so by either holding the new employees remote or by dedicating a separate department to them.
The onboarding process can get complex if the operation needs temporary staff to interact with the internal team and the strategic management wants to maintain the prevalent cultural and knowledge mix. Leaders should meet the team and set collaboration goals and attitudes before allowing the two resources to meet.
In some instances of talent rarity, the business may have to consider importing these skills from nearshore or offshore staffing agencies. The budget restraints may also cause firms to consider remote contracts.
Search and Shortlist the Relevant Resources
Now that you know what you are looking for start researching the right prospects. Search and make a list of potential hiring partners. Note that the type of partner will differ depending on the skill levels you demand.
Non-skilled or manual labour can be acquired directly from the market or unions. You can tap generic talent providers or invite freelancers for generic skill needs. Specialised talents will need closed vetting; you should hire through the talent agency.
Your business will also need to consider the skill type it requires. Especially if its needs are highly specialised, you must consider your industry's boutique staffing and consulting agencies. These specialised staffing experts exercise high care when scrutinising and training their employees for utmost performance.
Once you have selected the talent, you must find the staff augmentation agencies from there. It is important to note that certain consulting firms also offer talent solutions to help pay for retaining their employees when they have a low turnaround in internal business.
In some industries, these consulting firms are a perfect solution because they retain and train the right mix of talent. Some examples of industries that offer the right marketing mix include marketing, finance and investment, IT, and HR. In other sectors, your business may benefit from something different than the difference in applied skill consulting regarding staff augmentation vs consulting services.
Deciding the Best Staffing Agency
The next step is to determine which staffing agency will provide the best fit for your needs. After you have considered the location, the level of autonomy on teams, and the skill type, you should carry out the following steps to reach the right partner:
Interview the Vendor
This is the first step in determining whether the staffing solution provider can help you with your short-term and recurring needs. Communicate with them about their talent mix and how they keep up with industry growth and technological advancements.
This interview will provide you with their vision and the scope of their services. It may be a foundation for a long-term need for short-term or gig-based relationships.
Understand Their Policies around Intellectual Property
If your business's success relies heavily on its intellectual property, collected and developed technology, or built-up knowledge base, you wouldn’t want to lose it to theft. Your rights to your intellectual property will become a paramount concern for you.
You will want to check the vendor’s data privacy policies in such cases. First, you need to check if the documented policies cover every right you wish to cover and manage every risk area. Secondly, see the agency-wide controls. Are they implemented thoroughly?
Also, ask about risk management policies around these property rights. Another area that requires consideration is their history regarding protecting the rights of their clients.
Communication Policies
When you hire employees, they will use your organisation’s communication protocol, and their communication efficiency will depend on how thoroughly you have explained your business’ internal reporting procedures. Please inquire about the communication procedure within the staffing agency. This way, you will understand the cultural gap you must address when onboarding these team members.
Analyse The Cultural Match
Here, you need to ask about their norms and values. Usually, teams focus on diversity, equity, and inclusivity among teams as the bottom line of cultural analysis. If your business also wants to include the organisation's norms to vet the right partner, remember this step after welcoming the staff onboard.
Don’t Ignore the References
Client satisfaction is one of the most significant indicators of a staffing agency’s expertise and project success. Start this process by asking the agency for their best customers and reaching out to them. The inquiry may include asking about the staffing solution provider’s best areas, scope of services, and customer care standards.
Talk about Costs and Discuss Parameters
If the hiring scope is significant, you wouldn’t want to ignore this factor. If your budget is limited, this should be the first point of discussion between you and the service provider. Note that you may not have a significant say in this matter if you are looking to hire highly skilled staff.
You will also need to discuss your immediate needs at this point. Talk about the type of project, duration, communication frequency, and autonomy requirements of your business.
Interview the Recommendations
Once you have selected the provider for your current needs, they will offer your business their employees. You are not obligated to hire every resource that the agency recommends. Instead, interview them to determine their soft skills and cultural fit with your organisation.
Bottom Line
When done correctly, IT staff augmentation can relieve the business of many HR-related costs. This talent management solution is fit for those businesses that either work on a project basis or see a hike in their product or service demand for a short period. These businesses can be found in any industry, requiring any skill level.
The need to hire temporary staff can arise in any business, but staff augmentation may or may not be the best solution for these businesses. This post talks about the scenarios where a company should rely on staff augmentation and those where this method will become a liability for the industry.
Also, the talent provider should be scrutinised thoroughly using the earlier process and try to build long-term relationships. Successfully implementing this process depends on a stable and mutually beneficial relationship between the client and the staffing solution provider.
The post Guide to Staff Augmentation: What, Why, and How is by Stuart Crawford and appeared first on Inkbot Design.
