Understand More About Staff Augmentation vs. Project Outsourcing

When growing your business, you have to ask yourself if it makes sense to outsource the tasks that you don’t need in-house or hire additional employees. We are going to share in this post, Staff Augmentation vs. Project Outsourcing.

Staff augmentation and outsourcing are two great options to grow your business. However, they’re different enough that you might find one better suited to your company than the other.

There are some upsides to hiring and some downsides to outsourcing. For instance, one may give you more job satisfaction while the other might increase company revenue.

So, the question that strikes you is Staff Augmentation vs. Project Outsourcing! Which one is the best for your business?

By comparing them, you can find out which one makes more sense for your needs and allows you to focus on what’s critical – the customers!

Staff Augmentation vs Project Outsourcing – Handling a Personalized Team 

Source: USM

Staff augmentation is a strategy that blends employees, consultants, and temporary workers to create a flexible workforce. It’s also known as workforce solutions or managed services. This type of staffing model allows companies to have access to a large talent pool while maintaining control over their workforce.

When you decide to use a hybrid staffing firm, you use human capital but at a much higher level than an employee. A staff augmentation team member is flexible, skilled, specialized, and committed to your project’s success. These employees can work on short or long-term projects or even full-time if that is what is required.

Many companies may be reluctant to take on long-term staff members because of their perception that staff augmentation costs more than hiring someone full-time. However, in most cases, when properly managed, a hybrid staffing firm will cost less per hour than paying two full-time employees for 8 hours a day for five days per week plus all benefits.

So you can say that augmentation leads to significant aspects when analyzing Staff Augmentation vs. Project Outsourcing.

The Staff Augmentation Model has Several Advantages, Including:

Access to a Global talent pool:

With a large pool of talent to choose from, you can find highly specialized workers and generalists who are cost-effective.

Flexibility in project scope:

The talent pool can work on short-term projects or long-term assignments. It allows you to adjust your staffing needs as needed. If a project runs into problems, you can quickly scale back your team size until things are running smoothly again.

The Ability to Scale Up/Down as Per Demand:

Instead of hiring full-time employees who must be paid even when there’s no work, staff augmentation companies allow you to only pay for services when needed. When there’s less work, staff members can take other assignments elsewhere or find another job entirely. It helps reduce overhead costs by allowing you to minimize how many people are on staff at any given time.

Cost savings from Using Non-Permanent Employees:

Because a hybrid staffing firm is in charge of managing your project team, you can save costs by not paying benefits like health insurance. You can also take advantage of tax breaks from not having permanent employees in many cases.

Leverage Expertise:

Many companies prefer hiring individuals because it gives them a greater chance to find someone with high-level expertise in their area. It is very limiting if you cannot scale up your workforce based on workload growth as a business grows. When hiring permanent staff members, compromises sometimes need to be made to meet minimum qualifications.

You Have Access to More Talent Pools:

You have access to more talent pools than you would if you were hiring employees. It is because many staff augmentation or project outsourcing companies offer services in different parts of the world.

Cons of Staff Augmentation:

• Because your team is being supplemented with freelance workers, you lose control over how work gets done and which skills are applied to specific projects.
• It requires a significant time investment in training, managing, and overseeing your team. 

Staff Augmentation vs Project Outsourcing: When to Choose Staff Augmentation Services?

For some organizations, especially those small or have a few part-time employees, staff augmentation can be a great solution. This arrangement entails hiring contractors with specific skills to fill in gaps in your permanent workforce.

For example, if you’re growing your business but don’t have money to hire a full-time developers team, you could bring on a dedicated development team via — vendor companies. 

Note: Staff augmentation contracts run from a few months to several years, depending on what’s needed.

Outsourcing – Handing Over the Project to Another Organization

Source: Statista – Reasons Behind Outsourcing 

Outsourcing is a business strategy in which an organization hires outside companies or individuals to perform tasks typically done by employees. For example, if you outsource your payroll processing, you might hire a company to handle payroll functions, such as calculating salaries, paying employees, and issuing paychecks.

It frees up your human resources department to focus on other tasks. The term outsourcing is also necessary more broadly to describe any situation in which a company uses outside vendors for goods or services that it would otherwise provide itself.

When you outsource a project, you’re handing over control to someone else. It gives you significant freedom because you don’t have to spend time managing how your project is progressing. Instead, you get back to what you do best – managing other projects or running your business.

However, it also means that if things go wrong with your project, it will be down to someone else to fix it. If your choice is outsourcing, consider engaging an expert who has experience in delivering top-quality work.

Get recommendations from others who have already worked with them and insist on detailed contracts that cover precisely what they are doing, when they are doing it, and how much they will cost.

Many companies now prefer to outsource their non-core functions. In today’s competitive business environment, outsourcing can be a cost-effective way to accomplish critical tasks without investing in long-term employees or keeping large staff on payroll.

The Outsourcing Model offers Several Benefits, Including:

Great Skill Diversity:

Outsourcing offers high skill diversity as the services can be provided by a wide range of experts in different fields. It is a significant advantage when it comes to meeting your business needs. 

Less expensive than Hiring Staff Augmentation:

With outsourcing, you can hire a team of experts to work on your project at a much lower cost than you would if you hired them as full-time employees. In most cases, outsourcing companies charge by time spent on a project rather than by the number of hours worked.

Most Outsourcing Services are Available 24/7:

Most outsourced services are available 24/7, which means that enterprises will never have to deal with any downtime or interruptions due to unavailable employees.

Leverage Another Company’s Technology Investment:

You can leverage another company’s technology investments when you outsource. It can be a considerable advantage if your business has limited resources or cannot afford to invest in specific technologies.

Cons of Outsourcing:

• The obvious downside is that you lose control. Yes, a freelancer will most likely produce quality work if given clear instructions, but there’s something to be said about being able to oversee every detail yourself.
• There are also some legal issues to consider with outsourcing. If your freelance designer lives in another country, you have limited legal rights over their work or ability to complete projects on time.

Staff Augmentation vs Project Outsourcing: When to Choose Outsourcing Services?

If you’re small but growing fast and face ample opportunities that demand resources to exploit them, it makes sense to outsource. There are cases where it’s not just cheaper than hiring staff; it’s also faster.

A great example is software development, where firms can quickly get up-to-speed on a new project by leveraging existing coding frameworks rather than writing everything from scratch.

Factors that Influence the Decision Section

Factors that influence the decision when thinking about Staff Augmentation vs. Project Outsourcing tasks include whether:

• You have a long-term business plan,
• Whether you have enough funding, and
• Whether you can attract high-quality personnel.

If your answer is no to these queries, it could be better to outsource at least some work.

Also, Read Here – https://www.dorjblog.com/what-is-procurement-types-processes-and-technology/