In this week’s entry to our blog, we would like to share a guide on what business owners who are looking to increase the capacity of their inhouse talents should do as they go about that and shed light into the idea behind augmenting for founders who are new to this.
What is Staff Augmentation?
Take a hypothetical situation: You founded a startup that suddenly blew up and due to how unexpected it is, you and your team are struggling to keep up with the demand that these many people put on your infrastructure even after everyone in your team has committed to working extra hours to try to meet demand, what will you do in this situation?
As a founder, one of the things you would quickly notice in the startup ecosystem in situations of urgency like this is how painfully long and expensive the hiring process is. In fact, in cases of urgency like in our hypothetical scenario, startups often become susceptible to hiring ineffective talents because they usually don’t have enough time to filter through unskilled people.
“Staff augmentation is the temporary use of external personnel to supplement your organization's capacity.”
Aside from that, a sudden spike in the use of an application may be just that and it may subside after some time. Would it be wise as a company to continue to pay for the capacity of people that are not needed after a short while? This is the problem staff augmentation solves.
Staff augmentation serves as a way to cater to the sudden or potentially temporary needs for skilled talents in the situation we described above.
How does staff augmentation work?
Essentially, Staff augmentation is simply using contingent workers to increase the capacity of in-house personnel. With the increasing talent shortage around the world with countries like the U.S, Sweden, and Finland witnessing double figures in the yearly decline of talents in the IT industry, for instance, the only thing you need to do to get started with augmenting your company’s capacity is to contact a staff augmentation agency and indicate interest.
Many agencies would start by drawing up a requirement list with you after consultation before following up with a binding contract and subsequently the provision of talents that you then need to familiarize with your project.
Why staff augmentation?
In the cases of companies that have reached out to us for additional capacity, we noticed that there are several reasons why they did so. The first is to supplement the gap they have in their capacity pool that’s usually caused by a spike in the demand for their services or the need to introduce another service, one other reason is to bridge the current need for a particular skill set while they wait to hire a full-time employee and in some other cases, it is mainly strategic.
We noted in the founder’s guide to software outsourcing that the global outsourcing market exceeded 92.5 billion USD in 2019 and today more than ever before, we are seeing an increase in the willingness of companies around the world to outsource more and more of their capacity to external staff for strategic purposes and you may choose that route too by augmenting.
One big upside to the trend is that it’s helping to push a lot of innovation in companies by filling the need for a specific skill set needed to execute projects and free up the focus of core internal personnel for more mission-critical responsibility. We have seen this ourselves with some of our clients.
Another advantage of staff augmentation is that it often serves as an avenue for clients to test for a position or skill set to see if they need it. Some of our clients end up enquiring to employ talents we deploy to work with them and that can only mean they are working with us to “trial run” talents.
The knowledge gap
With agencies like Alabama Solutions, companies get to work with skilled talents quickly because of our distinct approach to hiring that saves time, and cost and cuts out the enormous energy associated with having to interview hundreds of candidates to find a good one in this seriously competitive and puddled talent pool.
In one of our case studies, we mentioned our approach to recruitment in today’s ecosystem to help companies fill the current knowledge gap in the market for skilled talents so we attribute the brilliance of our staff augmentation service garage to that.
Staff augmentation is not outsourcing
Although they are sometimes used interchangeably by unfamiliar people, staff augmentation slightly differs from outsourcing. Usually, the goal of companies looking to outsource is to divide an entire project or parts of it to external agencies to work on.
With staff augmentation, that goal is different. Typically In Staff Augmentation, you are adding additional specialized skill sets to your in-house team based on the requirement of projects you’re working on.
To put it differently, staff augmentation agency talent works on your project in-house with your team while in the case of outsourcing, they work on your project away from your team.
Example case study
A classic example of how staff augmentation can be strategic is in the case of Toyota, which cut down its factory workforce during the 2009 recession to turn 10-20% of its employees into temporary employees and prevent future layoffs during the course of the recession.
Vetting staff augmentation agency
In the founder’s guide to software outsourcing, we mentioned that evaluating an outsourcing agency requires at least two things:
- Research agency’s reputation and reviews: Your selected staff augmentation agency’s reputation should be pristine. In other words, the agency must not have had any legal, especially confidentiality issues in the past. It is also hugely helpful to have a sense of their team’s overall capacity by reading the bios of top executives for instance before committing to work with them.
- Research past clients: it is only appropriate to take a look at their client list since it can determine how big of a project their team has handled in the past. You want to make sure you evaluate the relationship with its clients, attention to detail, and general expertise of the team.
Some of the most important things to look out for when deciding to augment the capacity of your team have been detailed on our blog.
The most important thing to take away from this article is that augmenting staff capacity can provide immense value over outrightly employee full-time employees that you may not need after a while. Or that will cost more than just augmenting because of the pain of recruiting and training the said employee.