In today’s highly competitive and dynamic business environment, the demand for skilled IT experts and services is constantly growing. However, the chronic shortage of skilled software developers continues to bug businesses, compelling them to adapt or perish. 

Luckily, IT staff augmentation service providers have come to the rescue by helping businesses tap into huge pools of skilled IT experts, increase operational efficiency, and optimize the time and delivery timelines of IT projects.

In this article, we are going to take a look at the staff aug model vs other team extension models, how you can choose the right model, and the services contained therein.

But first…

What Is a Staff Augmentation Business Model?

Also known as the resource augmentation model, staff augmentation is a hiring model that entails hiring highly skilled tech talent externally to supplement the existing in-house team in the most time-saving and cost-efficient way. 

The staff augmented model begins with the hiring company interviewing the potential candidates and deciding whether or not they fit into their requirements and job positions. After that, the chosen augmented team members are onboarded into the existing in-house team, where they maintain the company culture and work in line with the company’s strategic goals. As a business owner, you can downsize or upscale the size of the augmented team depending on your hiring needs and project size.

Types of Staff Augmentation Providers

staff augmentation business model

The huge demand for augmented services and the need to satisfy different business needs has transformed staff augmentation into a multi-billion industry. Naturally, this has seen various staff augmentation agencies offering a myriad of services. Let’s take at some of the most common types of augmentation providers:

  • Traditional staffing providers. Also referred to as “commercial/generalist staffing providers,” these types of agencies mainly augment companies looking for expertise in non-critical projects that don’t require specific skill sets. For instance, if an IT product company is looking for a data entry specialist, they may use the services of generalist staffing providers to fill the position.
  • Boutique staffing firms. These are small staffing agencies, and they can help your organization fill even the hardest positions. They offer highly customized services and mainly value quality over quantity. As such, the cost of hiring such a company is significantly high.
  • Staffing platforms. These are big platforms that provide staff augmentation services, as well as connect employees with potential employers. They can be divided into two major categories i.e on-demand and gig platforms. The primary distinction between the two is that gig platforms don’t necessarily guarantee that you’ll receive professional employees, whereas on-demand platforms provide curated, vetted, and interviewed talents. Popular platforms include Upwork and Fivver.
  • Recruitment agencies. As the name suggests, recruitment agencies help recruit employees on behalf of the hiring companies. They receive a commission in exchange for finding a suitable candidate for the job position. Unfortunately, recruitment agencies don’t have expertise in particular niches, meaning they may fail to locate the perfect candidate.

Why Is IT Staff Augmentation Consulting Important?

Depending on the scope of your project and the hiring needs, staff augmentation consulting can be beneficial in several ways. For starters, the staff augmentation pricing model lets you hire offshore talent within a short period, and save on costs while at it. Along with that, it allows you to keep your team lean and shorten the development cycles, all thanks to its aptness in hiring highly skilled professionals. 

What’s more, unlike hiring full-time employees who are paid every month, the outstaffing model lets you pay skilled technical experts on an hourly basis. Better yet, you can scale up or downsize your team as needed.

The final and probably the most important benefit of the augmented team extension model is that it gives you better control over your business. When you hire an IT outstaffing company, you aren’t necessarily handing over all the work to external specialists, but rather leveraging their specific skills to meet your objectives.

Staff Augmentation vs Other Team Extension Models

Now that we have seen the different types of IT staff augmentation agencies and the benefits, how does staff augmentation stack up against other outsourcing models?

  1. Staff Augmentation

Since we’ve discovered in detail what staff augmentation entails, we won’t delve much into the details. But in the interest of coherency and better flow, here’s a quick recap. Basically, this hiring model allows businesses to obtain external technical resources to increase their in-house capacity, both rapidly and cost-effectively. It is ideal for companies facing internal deficits in a specific skill/s, such as machine learning or AI, and have their internal team fully occupied. 

  1. Managed Services

Managed entails outsourcing certain or entire IT functions to a managed service provider (MSP). Depending on the MSP provider you work with, they can help with almost everything, from VoIP solutions to cybersecurity needs to backup recovery, and much more. Companies typically seek out managed services when they lack the resources to hire and manage their in-house IT teams.

Key among the benefits of managed services include predictable development costs, fast turnaround time, and high-quality deliverables. As a result, it becomes easier to set clear deadlines and fixed budget allocations, especially if there’s a well-laid out and structured product roadmap between the two parties.

On the flip side, budget overruns and delayed rollouts could occur if a managed services arrangement operates without a clear and defined roadmap.

  1.  Staffing Retainer

If your company is looking to hire a highly versatile team of specialists on a set budget, the staffing retainer model is a more ideal hiring strategy. It entails hiring a suite of engineers to help with certain deliverables of a project within a specified period, say a month. 

A fixed fee is negotiated upfront and paid monthly, provided the team has delivered on the deliverables agreed upon. As such, staffing retainer is an excellent option for companies working with a set budget. Key benefits of this hiring model include high scalability and increased efficiency. 

The only real downside of the staffing retainer model is that time management can affect profitability and deadlines.

staff aug model
  1. Dedicated In-House Staff

As the name suggests, this model simply means hiring a dedicated team to work on your projects in-house under your guidance. Every business needs an in-house development team unless the team doesn’t have the necessary knowledge and skills, or fails to achieve the organization’s desired efficiency. 

Using the dedicated in-house model lets your business build the dream team that shares your business vision and goals, as you are in charge of the entire recruitment process. Along with that, it gives you better control over the workflows, the safety of your Intellectual Property, and standardized quality.

The major drawback of hiring a dedicated in-house team is the need for training to help the members acclimatize and align with your company’s values, policies, and modus operandi. 

5. Time and Materials

Accurately estimating a development project can be a major challenge for companies. If the estimate is too big, your company could end up overspending. Too small, and the development team could end up compromising on quality. Adding to the difficulty, the cost of technology could fluctuate between the estimate and project completion. And that’s where the time and materials hiring model comes in.

It is an engagement model whereby the client pays strictly for time and resources spent on the development project.  It is mainly used when the project’s owner has a blurred vision of the final product, difficulties in implementing the project’s specifics, or in situations where it is impossible to divide the project into small deliverables. 

The primary benefit of the Time and Materials hiring model is its high flexibility when negotiating payments. You can pay on an hourly, daily, weekly, or monthly basis depending on the amount of work, resources, and materials applied in the development process.

And since the model is pegged on the Time and Materials utilized, you don’t receive additional support or resources for your development projects. 

6. Outsourcing/Offshoring

You can also meet your software development needs by offshoring. This entails recruiting talent from overseas, where lower production costs and an abundance of skilled professionals is. Needless to say, however, the success of an offshoring work arrangement lies in constant communication even when faced with overlapping time zones. 

7. Ongoing Support

When developing digital products, companies have to strike a balance between low development costs and high-quality products. And to achieve this, some end up hiring the cheapest contractors and software development companies for a one-off service.

The only problem with that is they don’t offer ongoing support in case issues or bugs arise in the future. If your company doesn’t have in-house technical experts, the cost of hiring or re-hiring skilled personnel for ongoing support could arise. 

How to Choose the Right Development Support Model

Size of your business, notwithstanding, choosing the right development model can be a major challenge. Before you can choose a hiring model, you need to ask yourself several questions. They include but are not limited to the following:

  • What is the scope of your development project?
  • To what extent does your development project require your oversight and participation?
  • Do you need your project built from the ground up? Or simply need an existing app improved?
  • What is your budget for the entire development project?
  • Do you need ongoing support after the project is delivered?
  • If so, what does the ongoing support entail? And at what cost?

Furthermore, you need a blow-to-blow rundown of the existing hiring models to determine which one suits your company best. To make things easier for you, we have summarized the pros and headwinds that you may encounter with each hiring model in the table below.

Team Extension ModelMerits Demerits
Staff augmentation software development company.FlexibilityHighly scalableSaves on costsOrientation training neededSignificantly reduced dedication
Managed ServicesPredictable development costsFast turnaround timeHigh-quality deliverablesProject overruns could occur in case of time mismanagement 
Staffing RetainerAccess to a suite of developers at a fraction of the costIdeal for projects with consistent workloads
In-house Dedicated TeamSheltered IPTeam aligned with the company’s vision and goalsGreater control over workflowsBraindrain could cripple the entire teamHigher overhead costs
Time and MaterialsPerfect for small or  open-ended projectsZero ongoing support
OffshoringAccess to a huge pool of talentLower offshore production costsOverlapping time zones could affect communication
Ongoing SupportFixed and predictable development costsUnforeseen costs may arise in the future

Additional Services Offered by IT Staff Augmentation Agencies

Depending on the staff augmentation agency you choose, there are different staff augmentation services to choose from including;

  • Custom Software Development
  • Mobile Application Development
  • Web Application Development
  • Desktop Application Development
  • E-Commerce Development
  • Devops
  • Cloud Development
  • Quality Assurance

Final Thoughts

The ever-evolving business and increasingly digitized business environment has pushed businesses to find a quintessential alternative to in-house development teams. And the booming staff augmentation industry has been at the forefront of fulfilling this need. Along with revolutionizing how businesses undertake development projects, staff augmentation consulting helps businesses tap into a global talent pool and save costs while at it.