Contact us anytime to know more - Kuldeep K., Founder & CEO CISIN
The harsh reality is that having top-notch development teams is necessary for firms to be competitive in the digital world. In the realm of technology, new programming languages and technologies are released every day. It is essential to acknowledge and accept them.
How can you guarantee that your development team can constantly use cutting-edge tools and tackle modern problems? The solution is personnel augmentation.
IT staff augmentation entails hiring outside talent and growing the internal team. This makes it possible for businesses to be flexible and avoid the hassles of employing employees internally, especially when they require specialists or high-level expertise. The significance of staff augmentation and the advantages and disadvantages of various approaches will be covered in this blog. Additionally, it will describe how to use the appropriate augmentation model when hiring offshore developers.
IT staff augmentation was a quickly expanding substitute for software outsourcing or internal hiring of software professionals before Covid. The post-Covid situation will be completely outlined in this paper.
Beginning with the fundamentals of IT staff augmentation, It is what? Its widespread use is due to this reason. How do you do it correctly?
Then, we'll go into market trends. We concentrate on the US and Western Europe, the two biggest markets for IT employee augmentation. What steps has Covid taken to alleviate the shortage of tech talent? What are the tendencies in the industry today? How do market conditions differ from one nation to another or from one city to another?
The Basics of Augmenting your Team with IT Professionals
Maybe you don't understand what "staff augmentation" is. If your business employs software engineers, you've at least considered it.
What is Staff Augmentation?
The simple act of hiring individuals from outside the firm to complete tasks that complement its objectives and staffing needs is known as staff augmentation. Your business will require seven developers to design a gaming app for its users. There are just four developers on your internal development team. Finding four app-building-experienced developers may take some time. This can prevent your project from starting on time and lower your projected revenue.
You can hire three developers through staff augmentation in a matter of weeks. This will enable quicker project and product launches. The cooperative model of staff augmentation also frequently involves outsourcing. You are not required to fire any developers who worked on your app once it has been released. By doing this, you can avoid the difficulties and paperwork that come with having a full-time job.
Different Types of IT Staff Augmentation
Three ways to augment staff include:
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Commodity-based Augmentation: This kind increases a company's employees. This entails recruiting workers who may need to be more skilled but capable of performing the company's essential duties. Commodity-based augmentation may be utilized when firms need to hire people fast due to a labor shortage.
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Skill-based staff augmentation: When businesses hire skilled workers, this is called Staff augmentation. These workers will have more experience and education than the average worker, which allows them to perform tasks faster than other employees. These employees can also use skills not available elsewhere, making them valuable assets for an organization.
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High-skilled augmentation. These highly skilled individuals are recruited from outside companies and hired to work on specific projects within the organizations. They might be required to solve complex problems or develop new products.
Additionally, you can categorize it as either short-term or long-term. When you recruit temporary personnel to help with a certain task, this is referred to as temporary staff augmentation. A campaign where you need to recruit an intern to help you with the design aspects is an example of this. Since it will only last for one project, this would be short-term.
On the other hand, when you engage someone to stay for a longer period, typically a year or more, it is known as long-term staff augmentation. This can be because your firm needs employees in the long run. After all, they have grown to be useful and necessary.
The Pros and Cons of IT Staff Augmentation
Staff augmentation is one of many outsourcing alternatives. But not always the wisest course of action. To assist you in deciding if expanding your team is the right move for you, we have summarized all the benefits and drawbacks.
Pros
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Flexibility - is an important aspect of staff augmentation and resources, as we have already said. Finding and hiring qualified personnel might take a lot of time, money, and paperwork. By improving your personnel, you can avoid similar issues. Without having to worry about time-consuming procedures, staff augmentation enables you to scale up or down your workforce as needed. You can begin a project with six developers and then go on to another with two without having to worry about contract termination or difficult hiring processes. Utilizing hourly rates, weekly/monthly payment schedules, and other adaptable options will help supplement your resources. As a result, it is even easier.
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Significant Cost Savings - Massive cost reductions come from outsourcing skills. There are no extra fees for paid time off, taxes, holidays, or other benefits. Costs associated with hiring or hiring counsel are no additional fees. The vendor, who retains the entire service fee, pays for all these costs.
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Huge Time-savings - It can take a long time to write job descriptions and postings, publish them on various sites, conduct interviews with applicants, and finish the paperwork necessary to recruit someone full-time. All of this trouble is taken care of by staff augmentation. Everything is taken care of by your outsourcing provider. The rest of the job is done for you; you only need to interview the candidate to assess them.
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Direct Communication - The vendor will handle all the specifics if you outsource your complete project. However, with staff augmentation, you can speak with the team directly to assign tasks, schedule sprints, and oversee the entire process using various project management tools like Trello, Asana, and Jira. Direct communication with the hired developers will be possible, allowing you to stay informed of all developments.
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Higher Productivity - A hallmark of IT worker augmentation is its high productivity. This indicates that the team is committed to the project and putting all its energy into it. They work quickly and effectively, and the project is finished on schedule.
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Access to Global Talent - It's obvious that when you are augmenting staff, your talent pool is not limited. You may need to lower your benchmarks to hire the right staff for your project. You can manage a remote team with vendors and hire top talent anywhere.
Cons
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Privacy Risks - Outsourcing work requires trust. It is possible to work with third parties and include them in your internal operations. You will work with a third party and include them in your internal operations.
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Management Bottlenecks - Generally speaking, staff augmentation means that employees won't probably work in your office. Building efficient management and communication channels is critical to keep your in-house and augmented personnel in touch throughout the project completion process. This will help to ensure that your staff works efficiently and avoids organizational barriers.
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Quality Control - Managers who place cost reductions above other criteria hire inept developers. This can quickly lead to project delays, expense overruns, and severe security risks for end users. This can be avoided by taking strict quality control measures. Get feedback from clients to verify that your augment staff is competent and well-trained enough to complete their tasks.
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Lack of Technical Expertise - The talent you want to hire must be carefully chosen. If your augmented workforce isn't working well, you could have to hire new employees, which could be devastating hastily. You may assess a developer's experience and decide if they are the ideal fit for you with the aid of a careful selection procedure.
Software Outsourcing vs. Staff Augmentation
When should you employ software outsourcing and personnel augmentation? What is the main distinction? Who oversees the job? You have control over the task while using staff augmentation. Wherever the provider is, that is outsourcing.
In this case, the entire project is outsourced. The provider is in charge of the outcome. Companies benefit greatly from outsourcing since it enables them to delegate all of the labor and accountability for a project to a third party.
You also lose control as a result of this. Due to the weekly changes in software needs, staff augmentation is extremely common. Even if not consistently. This only works in a relaxed partnership when the vendor has committed to a specific outcome.
Software outsourcing is an option if you need more technical know-how or capacity to do the work. However, selecting staff augmentation or managed services is preferable if you require greater flexibility.
Staff Augmentation or Managed Services
Managed services can be characterized as a hybrid of software outsourcing and IT personnel augmentation. Outsourcing is different from managed services in that managed services are more long-term. The arrangement is more adaptable because the supplier must fully commit to an outcome.
In contrast to employee augmentation, a managed service arrangement still involves the provider managing the task. In general, managed services are more expensive than employee augmentation. Additionally, you depend more on the provider and have less control over him-his capacity to assemble a potent team.
Suppose you need the technical skills or the ability to manage the work but still want to be flexible. In that case, managed services may be an option. Staff augmentation is a good option if you cannot manage your custom-recruit team.
Finding the Right Partner
Most frequently, the inability to acquire appropriate talent in the local market leads to hiring an IT staff augmentation business. Particularly for smaller enterprises, this is true. Before selecting a service, it is critical to ascertain whether they have experience working with businesses of your size. Can I hire just one developer? You might even take a part-time job.
Finding the proper partner is the most crucial choice in this working strategy. A reputable provider will assist you in putting the strategy into action, including team formation, talent matching, and onboarding.
The following criteria are important when choosing a provider.
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Track Record: What is their average tenure in the business? How big is their company? Are there any references or reviews from clients? Are they successful with clients like you?
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Pricing: Are their rates fair, transparent, and competitive? But are they realistic? Low rates are attractive. However, too low rates can indicate that the quality and level of service won't be as good.
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English Proficiency: How does the communication flow in sales? Can they communicate in English? Are they fluent in English?
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Developer Pool: How big is their developer pool? Can you have open access to the candidates? You also have the chance to interview them extensively and test their abilities.
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Performance Data: Are they able to provide enough information on the candidates? What are their past results? What are their scores on tests? They don't just have to pass technical tests. Not only technical tests.
Staff Augmentation Best Practices
After the team has been brought on board, pay attention to the following.
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Hardware: All team members should have enough laptops, phones, internet connections, etc. Discuss this with your provider in advance.
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Meeting Rhythm: Regularly schedule standups to discuss milestones, metrics, and progress.
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Clear Guidelines: For how you want to work together, establish clear rules of engagement and a code of conduct.
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Socialize: Invest in social gatherings online, an open video room, and informal communication.
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Provide Proper Tooling: Ensure that everyone has the right tools to communicate and succeed.
Read More: 10 Popular IT Staff Augmentation Companies in USA- 2022
The United States is the Market for IT Staff Augmentation
Now that you have the fundamentals down let's move on to the largest market for IT staff augmentation services. The US is in question. Unfortunately, we need more information on actual expenditures for IT personnel augmentation. Overall, tech job estimates provide an overview of the market size and trends for hiring additional IT professionals.
The US needs more Tech Talent
A market analysis showed that employers could only hire six people for every ten open tech jobs in the US. Contrary to this, 12 companies could hire for every ten open positions in all tech fields. It's, therefore, twice as difficult to find tech talent.
Additional data support the idea that there is conflict in the IT labor market. The average time to fill a tech position is 61 days. It may take up to 72 days for developers, a subcategory. Non-technical occupations only last 42 days.
According to research, there will be 8 million employment in US tech fields. 5.2 million people worked in core IT positions. Technicians, technical engineers, installers, and repairers are examples of non-core roles. They predicted that there would be 918,000 unfilled IT job openings. This represents 15% of core tech roles and 10% of all employment vacancies.
Tech Talent is in High Demand
Over the following ten years, this deficit will only get worse. More than 9 million people are anticipated to work in technology by 2030. This represents a million more than before. However, due to retirements or other factors, the industry desperately needs replacement labor. This amount will be roughly 580.000 per year, according to estimates.
This indicates that the US will need to hire new workers over the next ten years to fill 6.8 million additional tech jobs. Currently, 65,000 computer science degrees are generated annually in the US.
This indicates a growing market trend in American IT worker augmentation. The number of job advertisements for IT positions increased significantly as well. With almost 300,000 posts, they have almost reached pre-Covid levels at this point.
Strong tech-based Economies in the US
Even though some cities are smaller than others, there is a big need for tech skills. For instance, San Jose employs 34% of all IT personnel. The local economy of San Jose is significantly impacted by technology. Compared to Seattle or San Francisco, it is 60% higher.
San Francisco, Seattle, and Dallas have the fastest increases in the population of tech employees. However, it becomes evident that Austin, San Francisco, and Kansas City are the top three when considering relative demand (new jobs vs. existing tech employment). IT staff augmentation services will probably experience a significant increase in these cities.
In the top-right graphic, you can also see which cities are growing quickly and are heavily reliant on the IT industry. San Jose and San Francisco are two of these cities, along with Austin, San Francisco, San Francisco, San Francisco, San Francisco, San Francisco, San Antonio, and Boston. These cities are important areas to focus on when adding IT staff.
The European Market for IT staff Augmentation
The same is possible for Europe. We'll examine the need for more qualified tech workers in Europe. To determine if there are any trends or market sizes for the augmentation of IT employees, we can also examine the statistics on tech jobs.
European Countries Need more Tech Talent
Unfortunately, there needs to be up-to-date statistics on the lack of tech talent in the EU. The European Commission warned that up to 900.000 ICT employees would be needed in Europe. The next year, the German statistical agency Empirica increased this figure to 500,000.
In the meantime, 58% of businesses in the EU looking to fill ICT positions need help. That there is still a skill deficit is demonstrated by this.
Currently, there are more software developers in Europe. It was predicted to total about 6.1 million. The growth was up 7% from the previous year. Nevertheless, a 10% or more increase in demand was anticipated. The need for tech skills is rising rather than falling.
The increase in overall demand for technology employment is depicted in the figure up top. Western Europe's total number of IT job searches has dramatically increased.
EU Countries with the Highest IT Job Markets
By examining which nations have the most trouble filling ICT jobs, we may use this data to estimate market pressure. According to the EU, Germany, the Netherlands, and Austria are the countries with the largest percentages of ICT-related issues. It also demonstrates that Sweden and Belgium saw much lower difficulty levels. This shows that the market in these nations is deteriorating. The remaining information indicates that Covid has not significantly increased the demand for IT talent.
In addition to the volume of demand, the following elements might be considered when determining the market's attractiveness.
English Proficiency: It is the best available in the UK, Ireland, and abroad. However, the Netherlands also has a relatively high level. Additionally, the Nordic nations have lower rates. Although it is somewhat lower in other French- and German-speaking nations, it is still quite low in France and Germany's two largest markets.
Openness to Outsourcing and Similar Services: The Netherlands and the Nordic nations are renowned for their openness to international cooperation. The UK has several historical ties through its commonwealth. France maintains close ties with some of the francophone nations in Africa. In comparison to other nations, France frequently has more specific tastes. Additionally, they are less interested in outsourcing and such services.
Why is Staff Augmentation so Popular in the IT Industry?
One factor contributing to IT staff augmentation's popularity, especially given the market's size, is how simple it is to hire more employees. A Businesswire analysis projects that the market will generate close to $1,493 million in revenue by 2025 (an 11% CAGR). Growth at these rates would only be conceivable with access to a huge pool of software specialists. Only resource augmentation, which helps spread the IT workforce among businesses, makes this possible.
Staff augmentation's flexibility is a great fit for today's increased hiring requirements in IT companies. Hiring in-house staff involves many steps. These include background checks, screening candidates, payroll decisions, and registration. It's time-consuming and resource-consuming. It takes time to hire the right people quickly for your urgent projects. It is difficult to fire such employees, which can decrease your in-house employment value, especially if you only need them for a short time.
Since your outsourcing partner handles all the hiring and paperwork, adding staff can be done rapidly. Your outsourcing provider will pick programmers with the required training and working experience. You or the boss of your firm need only interview and hire the best candidates. This enables your business to be timely and nimble, preventing revenue loss and sluggish market launches.
Conclusion: IT Staff Augmentation
There will always be a high need for tech talent. Covid, or worse, momentarily stopped the market. The current lack of tech expertise will not, however, impact the demand for staff augmentation services for IT. Both the United States and western Europe can attest to this.
According to our experience, smaller businesses need help addressing the talent deficit. For those businesses, a staff augmentation is a terrific approach to getting access to talented engineers. Create a team to work in the long term.
In a humanitarian sense, the past has had the benefit of increasing the acceptance of distant employment. The skills, expertise, resources, and procedures that contributed to its success were also in its slipstream.
