IT Staff Augmentation: A Growing Trend in the Industry
To boost performance by leveraging talents in other countries, companies are increasingly choosing staff augmentation services. As a strong alternative to traditional outsourcing, this business model seems to have a bright future.
Pulling talents from the world pool
Attracting talent from other countries has long been a common practice for companies, especially within the IT sector. The logic behind this phenomenon is simple: why limit yourself to one country, when you have the whole world at your disposal?
Instead of expanding your team, which tends to be troublesome and costly, you can take advantage of the almost limitless possibilities of a global IT market filled with brilliant specialists from a wide variety of backgrounds and skill sets. Especially considering the fact that highly qualified specialists in some countries can cost significantly less.
It was the desire and need to cut costs, which was one the main reason why many companies began to outsource extensively when the great recession began in 2008. Recently, the interest in using offshore teams has grown significantly due to COVID-19 on one hand, although the pandemic has caused another economic crisis and forced many companies to reduce their expenses. But also it has spurred on the digitalization of businesses and industries. With the demand for software specialists growing dramatically, this has prompted IT companies to look for tech talents in other countries.
According to Beroe Inc. the outsourcing market is expected to grow by $531B in 2022. Grand View Research looks further ahead with an annual rate of growth being 7.7%, the market is predicted to rise up to $938 billion by 2027.
At the same time, as fundamental changes are taking place in the market, along with the model of traditional outsourcing, staff augmentation services are becoming increasingly popular among IT companies. This is primarily due to the fact that outsourcing tends to have some features that are not always suitable for every company.
IT team augmentation as an alternative to outsourcing
For all of its advantages, outsourcing has a number of drawbacks. According to this model of work, a company finds a team of specialists in the market who can execute and complete a particular project at an affordable price. As soon as the customer and the contractor shake hands, and the work begins, the project is transferred over and all control is granted to the contractor. On one hand, this is good because you delegate a project and completely shift it onto the shoulders of another team. But on another hand, you lose control and sight over all of the work on your project that takes place.
During work, unforeseen additional costs may arise, for example, the need to upgrade your software, troubleshooting additional issues, etc. and thus the lead time and time for completion of your project may increase. Throughout this, you’ll also not know how efficiently the hired team has been in using their time and your money. In addition, using an outsourcing model can be risky especially when it comes to your important information and data, such as program codes, as it’s harder to stop them from being shared and leaked.
All of these shortcomings have led to the emergence of a new, augmentation staffing approach.
Instead of looking for third-party contractors, the staff augmentation model means building a dedicated team of specialists from scratch, and then they are supposed to operate as an integrated part of your company, thus becoming kind of your full-fledged representative office in another country. This approach has proved to be the most efficient way, when you need to boost your company’s performance by engaging talents from another country.
Advantages of the staff aug method
This relatively new approach has a number of obvious benefits which outsourcing could not provide.
A better choice of specialists
While in outsourcing you are limited to the set of specialists that the contractor can provide, here you have access to the entire pool of talents within the selected country. The initial selection of candidates is carried out by the company which provides team augmentation services, but you retain the rights to make the final decision on each candidate.
Instead of dealing with outsiders, you are interacting basically with your own team that is located in a different country. These guys work exclusively with your projects, without being distracted by anything else and they become fully integrated into your team of in-house specialists.
Members of a dedicated team share your values and are immersed in your corporate culture as much as all in-house employees. This means they are as involved and interested in achieving the same goals of the company as you are.
By having a dedicated offshore team as an integrated part of your company, you do not have to deal with third parties and entrust them with your programming codes and other vulnerable data.
In an outsourcing model, you may not always know in advance what the final cost of the product and services will be. By using IT augmentation services, you know your expenses in advance. At the initial stage, they include the costs of renting an office, purchasing equipment, all salaries for staff and the provider’s services.
You can rely on a local IT staff augmentation services provider for everything from recruiting and finding an office, to HR support and legal assistance.
To build an offshore team in another country, you will most likely need the help of a local provider. For example, in Ukraine, a country that is recognized as one of the bЕest for offshoring, you’ll find Newxel to be one of the top staff augmentation companies. Visit their website for full details on what they could do for you.
In short, taking into account your specifications, they will select candidates for your team from the best specialists in the local market and provide you with a shortlist. You will then be able to make the final decision about each employee in order to be completely confident in them.
They will also provide an HR specialist who will be responsible for providing the proper motivation, maintenance of your team’s spirit and introduction of your company’s corporate culture. They will also take care of finding an office and sourcing all necessary equipment so that there are no issues when setting up your team.
Also, the contractor will take charge of the entire process related to legal and financial issues such as: registration, taxes, salary payments, and so forth.
As a result, you will have a hand-picked, fully equipped team that you can directly manage without wasting time on laborious issues.
The pandemic has had a twofold impact on the global economy. On one hand, it has led to a crisis in many areas, yet on the other, it has stimulated a digitalization and active introduction of new technologies. Therefore many IT enterprises found that not only did they not suffer, but in actuality received an impetus for development. Moreover, the demand for IT services has grown so dramatically and sharply, that it simply cannot always be met. This means that because IT organizations tend not to have a sufficient number of highly qualified specialists on hand, it pushes them to seek help from IT staff augmentation companies.
To stay competitive in a pandemic, many enterprises around the world are massively adopting technologies that increase productivity such as: cloud services, AI-based solutions etc.
According to Gartner, Inc. by 2024, most enterprises will have completely redesigned their business processes with automation technologies. Forrester Research indicates that 56% of major market players are already actually using automation software or are going to do so.
It looks like the need for IT professionals around the world will only grow. Which in turn means that staff augmentation companies will have a lot of work to do.