Want a Thriving Business? Focus on Staff Augmentation!

ba-9

We often hear about various hiring strategies that are of high demand among organizations and businesses or read numerous pros and cons of each such strategy and their comparisons. In this article, we offer you a deeper insight into one of the most effective and popular hiring strategies named staff augmentation.

Since the world spins faster, companies might encounter a new obstacle on their hiring path when staffing permanent employees for the existing and future requirements of the company. For years, the world market for skilled talent has been tightening. This often leads to long months of recruitment processes for a position such as interviewing, testing etc, which puts you back to the very beginning.

A market for highly skilled experts is quite constricting, so staffing challenges have become a routine for many organizations all over the world. The right talent should be found as soon as possible to implement operational and marketing plans with risk mitigation, quality control, and cost leverage. The answer to this for many international organizations has become augmentation of staff. They are looking for their personnel to augment. Meaning of this term refers to hiring specialized people for long- or short-term projects, on a temporary or permanent basis, either part-time or full-time. It is often done through staffing companies,- CatMedia informs. Staff augmentation is meant to refer to the needs of business and provide companies with the proper specialists with a high-level of required knowledge, experience, education and skills.

Staff Augmentation in IT Staffing

The technique of staff augmentation consists of two parts: evaluation of the current staff at the company and further determination of the exact additional skills of the workforce that is needed to fulfill company’s objectives. This solution leverages the resources of the company and utilizes contract workers and outsourced services. Today’s staff augmentation is of high-demand because IT resources are in abundance, rates are declining rates, and margins for companies that require these services are narrowed. IT staffing often means an allocation of a remote technical talent pool, dedicated team formation, as TDK writes. It is mostly offshore, hiring in-house teams from overseas on flexible or fixed conditions. Services provider augments the company’s personnel with skilled staff. The company is responsible for new staff management and provision and quality control of the work they are to complete.

According to the research, most companies prefer staff augmentation to any other of the staffing solutions as an option if they are facing high priority and fast-changing needs. Approximately one-third of the worldwide workforce consists of independent and external talent. These workers are not defined as traditional employees. Companies shift from hiring workforce employees and cooperation with traditional recruitment agencies to purchasing external workpool. They find smarter ways to develop strategies in cooperation with staffed employees and staffing agencies. The concept of borrowing workers for money is not new, Manpower(1948) and Kelly Services (1946) were the first agencies to provide companies with staff augmentation of lower-skilled talent. Of course, modern landscape of borrowing external workers differs from the 20th-century traditions when temporary labor for those in job search meant typing in the office or load heavy stuff at the warehouse, according to Forbes.

Modern staffing agency propels the worlds into an agent nation of experienced talent of all specialties and disciplines. The amount of such workers has risen from 56% in 2008 to 73% in 2016, and continues to grow, as Staffing Industry Analysts state. Sometimes organizations use special services during that provide them with expert analysis and graphics to flex account and marketing departments and fill in the gaps in their talent pool.

Staff augmentation is most often used in the information technologies sphere since this specific industry easily copes with remote working. Developers, programmers, data analysts and scientists, accountants and business analysts, IT consulting and many other. Nowadays, even college professors and physicians shift to become independent talent for hire. Expenditures for labor services has been rising for years, so staff augmentation is one of the best options that help to reduce labor costs for any company. With today’s technologies and various management systems, team cooperation is no longer a problem. That is why more and more companies decide to outsource their staff. This is often seen as a perfect possibility to get better business outcomes.

 

Companies choose to augment staff among a variety of staffing services. Here are a few reasons when staff augmentation is required, as CatMedia puts it:

  1. The company is about to implement a new project, but who will be working on it? Full-time personnel works overtime, and overloading it with extra work will lead to undesirable consequences. So, a company needs experienced project management people to start a new project and work on it during 6 or 12 months.
  2. Some of the full-time top-management employees that are critical for the functioning of specific projects or departments of the company announced that they need an extended leave for a few months for the reasons of illness, maternity or other. Logically, a company needs someone to temporarily discharge obligations of those people on leave. Of course, a company cannot hire a new employee for full-time, so here they cooperate with temp agencies to hire required experts for a limited period of time.
  3. One of the major projects of the company is in a strong need of the new talent for a specific period of time, during the development stage of the process for example.
  4. Company’s new project is in its final testing phase. Usually, it requires doubled concentration and workforce with compliance with risk management procedures. Temporary staff is the best option for this situation.
  5. The employment agencies failed to find the necessary talent for the company’s needs, so the search should be continued through the staffing agencies to hire great staff that will match the requirements of the employer.

Why Business Augments its Staff

Staff augmentation has become one of the key strategic staffing solutions for many companies all over the world. IT staff augmentation is a great hiring solution for many companies that need skilled developers, data analysts and another technical workforce. In general, the contractor workforce has been rapidly growing from 10% in 2010 to nearly 50% by 2018, as HRdive informs.

FutureState defines principal advantages of staff augmentation:

1) Companies receive access to highly knowledgeable skill sets. If a company is looking for highly specialized talent, staff augmentation is a perfect option. Highly skilled workers are all employed, and this has made freelancing an attractive option for those who are unemployed. The number of such skilled professionals on freelance is growing, so companies can select remote workers with the matching proficiencies for the position and add them to the workforce to meet business needs.

2) Cost-saving. Staff augmentation reduces business costs. At the same time, it increases profitability. This is available due to:

  • Less overhead costs, for example, taxes and benefits of full-time and in-house personnel;
  • Cost reduction of payments to year-round workers by contracting people for temporary projects;
  • Training costs decrease because highly skilled workers need less time for training, so its speed and quality is less than if unskilled workers were trained;
  • Becoming flexible due to easy and quick contract termination in case of budget shortfalls.

3) Time-saving. Consultants are usually hired much faster than full-time employees.  This is because it can omit human resources experts and long interviews. Moreover,  the budget company can use for hiring consultants is often separate from the full-time. That is why organizations can hire a couple of temporary workers even if there are some hiring limits on increasing the pool.

4)  Unbiased and focused workforce. Extra consultants are often hired to work on certain projects, so they don’t get distracted, have a specific load of work and deadlines. That is why their approach to the project is more focused and specific. They are away from the in-house promotion scheme and have a completely different motivation system than most of the in-office employees. Their key aim is to make sure that the work is completed on time and according to the assignment. Their feedback, therefore, is more objective and unbiased.

5)  Quick adaptation and flexibility. An organization that utilizes staff augmentation should be able to quickly adapt. When they expand their in-office workforce with the borrowed talent, deadlines of important projects can be shifted towards earlier dates. In such a way, due to acquired flexibility, organizations are able to faster response to the market changes and trends.

6) No administrative complications. Organizations who decide to use staff augmentation services, do not spend time for administrative concerns anymore. Staffing agencies deal with a load of personnel connected issues such as coaching,  performance and termination issues, benefits, payroll, unemployment. Besides, such agencies can manage budgets, project plans, and resources if the company needs it.

7) Organizational control. Full-time workers provide the new outstaffed employees with outlines, guidance, and directions regarding the project. That is the executives of the company delegate tasks, prioritize, and manage projects. Integration of the new team members into the current staff helps business to control the processes.

Common Problems of Recruitment

The quality of workforce to hire depends on an effective selection and recruitment strategy. This process is not always easy. Employers encounter hiring problems such as lack of communication between the HR managers and recruiters or the cost of job openings advertising, - Chron.

 

Work.com defined 10 main problems of recruitment:

  1. Balance between quality and speed

The company wants to hire a candidate as fast as possible and at the same time, he is expected to meet all the requirements of the vacancy. Getting the best quality candidate often takes a lot of time. Due to today’s economy, there is a belief that within a limited talent pool, the top workforce is usually hired within only 5 days. However, in fact, it is not true. However, top management often puts strict demand, so the HR managers should speed up when finding the right talent.

  1. Recruitment strategies are too old

If the hiring strategy lacks direction or is rather outdated, the results might be very poor. A recruitment strategy should stay on top of the globalized recruitment market requirements.

  1. Retention problems

The market has changed in a way that it’s impossible to spend 20 years on one job site. This is called a fluid career, which means that skilled workers can stay onboard for a year or two, which means the increase of the turnover rate. It might not have a good impact on the company if it is not able to recognize such market changes.

  1. Overwhelming the hiring system

The time of top talent recruitment will shorten while the number of candidates might only increase, so the company will experience difficulties in finding the right ones.

  1. Resources are limited

Most businesses follow the business concept “Do more with less”, which means that most companies all over the world have cut their expenditures that reflected in the rapid drop of people the companies are getting on board. This means that HR managers should prioritize which positions they can hire first.

  1. The war for talent

Competition for talent has rapidly risen. Gone are the days when there was an overflow of qualified candidates and no rivals. Technically skilled candidates and top performers are of high value now and are quickly recruited by the companies.

  1. Competition

Modern startups make a competition for other companies nowadays because their abundance and funding are popular among job seekers. This makes recruiting for regular companies quite a challenge. Startups are more exciting for workers and more preferred than regular jobs.  

  1. Effective recruiters are in demand

Besides work talent, companies also need recruitment talent, which continues to shrink. Ineffective recruiters cannot meet company’s need for quick and skilled filling of the vacancies.

  1. Balance between the new and the traditional

Finding the right talent for your company is complicated, it requires not only the ability to place an ad in a local newspaper, this process needs much more - to make the seeker interested in the position you have.

  1. Online profiles

The world has become social and connected, there are millions of users on LinkedIn, but most companies still need a resume and cover letter. At this time candidates have moved further and started to use their online profiles and expect them to be accepted by the companies.  

Kinds of Recruitment Companies

The modern job market is highly competitive, so companies use various services of existing employment agencies. In fact, there is a huge variety of them. The Balance provides information about the types of recruitment agencies that are available nowadays:

Traditional employment agency

They often specialize in a certain industry. Some agencies charge the job seeker but most of them charge the employer.

Contingency employment agency

They are used for mid and -level searches, sending a bunch of resumes to the hiring company. These agencies are paid when the candidate is actually hired.

Executive search company

Such agencies are also called retained search companies or headhunters and have an exclusive relationship with the hiring company. They often do the senior and executive-level searches and often have limited time to find specific candidates. Executive search firms are experienced in contracting and sourcing top candidates for an employer, and can often entice valuable workers away from their existing employers. They often perform the check of candidate’s skills and experience. These companies are paid expenses and a percentage of the salary no matter if the employee is hired.

Temporary agency

These firms look for candidates for temporary jobs during tax season, seasonal increases or to cover illnesses or vacations. Temp agencies also find experienced consultants.

Of course, temporary agencies don’t limit themselves with only temp jobs and look for candidates for job positions that start as a temporary but can become permanent.

Contract Recruiter adds two more positions to this list:

Full-Scale RPO

It deals with the transfer of outsourcing recruitment activities to some outside service provider that acts as a company’s internal recruitment function. The RPO is in control of the process for the client. It is utilized when a client company has high volume staffing needs, and internal HR is not able to handle, or when there is no HR manager in the company. Full-scale RPO guarantees effectiveness and economic cost when properly implemented with the corporate strategies.

On-Demand RPO

It deals with coordination, recruiting, and sourcing of staff upon request. It is used either for full-cycle recruiting or for some needed aspects, such as onboarding, candidate management, and communication, recruitment coordination or sourcing of interviews, etc. On-demand RPO helps to improve quality of the recruitment process and saves money for the company.

Staff augmentation agency

This outsourcing strategy is utilized to staff a high-demand business goal or project with consultants. It is very popular in the IT sphere to hire temporary IT experts in various projects such as software and web development, or network engineering.

 

Popular Companies that Have Remote Workers

Remote work is not something most companies want to avoid. On the contrary, modern firms tend to hire more and more remote candidates. Skillcrush posted a list of companies who offer remote jobs:

  • Dell offers the so-called connected workplace for its employees that includes flextime, part-time and remote work.
  • Aetna
  • Google
  • American Express
  • Xerox
  • Apple
  • Humana
  • U.S. Department of Transportation
  • IBM
  • About.com
  • Microsoft
  • Thomson Reuters
  • Mozilla
  • Nielsen
  • American Heart Association
  • Adobe
  • General Electric
  • Cisco Systems
  • United Airlines
  • Sears
  • Wendy’s

Due to the rapid development of technologies and creation of communication ways, remote work has become real. Moreover, it is cheaper than in-office operations, so more and more companies are undertaking this way of cooperation with some of the employees or the whole teams.  

Why It Is the Right Way to Hire an Offshore Company

Thanks to available technologies and quick pace of changes in the world market, multiplies the ways you can staff your company to achieve your business goals. There are many ways you can hire staff for your company depending which aims you pursue. If you are looking for a skilled team for hire to work on your project, there are three typical methods to find the right talent for you. Some of them are very cheap, but yet time-consuming, some are quite costly. Local hire, outsourcing, and outstaffing from offshore firms.

Local hire is the most old-school and reliable strategy. Local hire is reliable and something you’ve used to a cozy office with every worker being there, coffee breaks and 9 to 6 schedule. It is so expensive. Not every company can afford to hire skilled staff locally due to high costs and office expenses. It usually takes a longer time to find the perfect match to your requirements, and often these perfect candidates live somewhere overseas or would cost you a fortune. If you’re not Apple or Google and care about your budget, go forward to find other suitable hiring strategies.

Managed services approach is a traditional IT outsourcing, as explained by B2C. It involves less training and implies that service suppliers control their part of the job or project. It is accountable and helps to manage costs. TDK points out that IT project outsourcing is more about outtasking assignments for another company, where devs are available and skilled to fulfill the tasks. They can execute entire projects due to the resources of another company. The remote teams are managed and staffed by the outsourcer.

Managed services have the risks in meeting project aims and deadlines. Other associated risks are flexibility and reliability. Lack of control in such a model is definitely a drawback. Smaller projects in this model are not that cost-effective as it might seem in the first sight. Companies that use this model also complain about the hard integration with internal processes of the company.  

Staff augmentation in this view is a better option for your business. It is a perfect suit for smaller projects, it provides you with the skilled and trained staff for your project and allows you to control and manage the processes in the workflow. Although at first glance it might seem to be more expensive, this strategy often has many valuable benefits and lower administrative costs.

 

Both of them imply remote work that many CEO’s and top managers seem to be afraid of. Most of the outstaffing companies are offshore, and here’s why it’s great to hire an offshore company to augment your staff. Offshore outsourcing or outstaffing means finding the right talent from other countries, but not your own, as Hubstaff defines it. Most of the American firms often outsource IT services to stay competitive.

According to VirtualArt, you get a number of benefits when working with offshore recruitment agencies:

  1. Quality

Offshore firms can hire anyone they need and hire only the most experienced talent pool in the industry. They are aware of the quality of their work, which makes them an excellent option for IT industry. Since they work internationally, they are able to meet any international standards if necessary.

  1. Always online

Offshore companies are experienced in communication, they are always there to answer your questions and are always connected, either by email, on phone, conference calls, communication platforms etc.

  1. Deliveries

You can use services of an offshore company even before your startup of a project begins. Due to time zones differences, work can be done 24/7 which will accelerate the pace of your project.

  1. Security

Offshore companies provide an extremely high-security level by following the most modern remote worker security protocols.

Offshore staff augmentation for remote workers is a great option for business requiring expert talent in the sphere. This will lead to cost reduction, product goals achievement, and growth increase. Besides, the business will remain the one who will control the quality, maintain oversight, and keep the strength of the organizational structure. It can play a valuable role in your staffing strategy. Remember that success depends on the analysis of thorough needs, solution applicable to your company’s needs, and smart implementation. If you are looking for a better deal, hire an offshore staff augmentation agency. You will get 100% quality at much lower cost than you would hire someone from your city.

Related Posts

 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Wednesday, 21 November 2018
If you'd like to register, please fill in the username, password and name fields.

Member Login

Business Insights & Tips

Leaderboard

1
Jill Holtz
792 Points
2
Michael Lane
789 Points
3
Ron Immink
732 Points
4
Fionan Murray
697 Points
5
ContentLive
276 Points
View Leaderboard