The Staff Augmentation Model: Build High-Performing Teams & Reduce Costs
This year, the tech industry has seen swift and far-reaching changes. Accelerating technological advancements, an economic recession and increased competition for top talent have tightened budgets and increased the pressure on leaders to attract and retain skilled technical talent.
Now more than ever, staff augmentation can provide a viable, cost-effective option for growing technical teams.
In this post, we’ll share an overview of the staff augmentation model and how it can help you build high-performing teams, gain a competitive edge, and scale your business during uncertain times.
Table Of Contents
- What is Staff Augmentation?
- How Software Teams can Leverage Staff Augmentation in 2023
- When to Hire a Full-Time Employee vs Leverage Staff Augmentation
- Comparing 3 Main Types of IT Staff Augmentation Platforms
- Advantages of Pre-Vetted Freelance Marketplaces for Staff Augmentation
- Final Thoughts: Staff Augmentation vs Permanent Staff
What is Staff Augmentation?
Staff augmentation is a hiring model where companies of all sizes can hire staff on an as-needed basis. In the tech sector, this could be to hire remote developers with specialized skills to develop products or features in an existing product niche, or even to enter a new market. This approach helps leadership teams be agile, flexible, and cost-conscious: staff augmentation helps you avoid the long-term and financial commitment of permanent employees, which can be especially useful in times of economic uncertainty.
To use an example, let’s say you have an immediate need for a front-end developer to work on a data visualization project, but you’re not yet sure if there will be an ongoing need for this skillset after the project concludes. In this scenario, a full-time hire may feel risky: the cost of hiring and training is a commitment, and if it turns out you must let them go after the project wraps up, this termination could hurt morale. What’s more, rehiring the same skillset if it’s needed again in the future is costly.
Compare this with contracting a remote, freelance developer for this project. You can bring them on for the duration of the project, without shouldering the costs of permanent staffing. It leaves the door open for longer-term work, but your requirements are transparent. So, if you no longer need the contractor after the project ends, the impact on your team is substantially less.
How Software Teams can Leverage Staff Augmentation in 2023
While staff augmentation is commonly used for short-term projects, it can also be a long-term solution for many companies. In fact, more than 50% of Scalable Path clients have worked with us for six months or longer, with some partnerships lasting nearly ten years. Our clients tell us staff augmentation is a highly successful model for adapting to ongoing development needs, finding specialized talent, and executing on high-impact projects.
1. Faster Ramp-up, Lower Hiring and Training Costs
Full-time software developers are expensive to recruit and retain. The recruitment process can be cost- and labor-intensive, requiring time and input of senior team members and leadership, not to mention onboarding, training, and benefits to factor in.
Compare this with staff augmentation, where the cost is simply the hourly rate agreed on by you and the remote developer.
Regardless of project duration, staff augmentation enables you to hire a skilled professional without incurring the expense of recruiting and hiring a full-time employee, paying employee benefits, or other overhead costs. This approach allows companies to scale their workforce up or down quickly and efficiently without any long-term commitments.
2. Speed up Hiring Timelines with Access to Pre-Vetted Talent
A significant benefit of staff augmentation is access to a network of pre-vetted developers. Rather than spending time and resources searching for qualified candidates, companies can quickly connect with developers who have met a necessary set of technical capabilities.
This approach minimizes the risk of hiring unqualified candidates while speeding up the recruitment process, allowing companies to respond faster to dynamic market conditions. Consequently, businesses can benefit from reduced lead times, faster time-to-market, and higher quality of work delivered by experienced and specialized talent.
3. Flexible Engagement Types and Duration
The process of hiring a full-time team member can be time-consuming, and the rigidity of a full-time commitment leaves little room for flexibility. Staff augmentation offers a flexible solution, enabling businesses to customize the engagement length, weekly hours, and contract type to align with their specific technology needs.
This adaptability empowers organizations to rapidly scale their workforce up or down, maintain high productivity levels, and control costs. Tech companies can embrace staff augmentation to respond faster to emerging trends, optimize their staffing resources, and achieve their business objectives efficiently.
When to Hire a Full-Time Employee vs Leverage Staff Augmentation
As with anything, there are different environments in which you might prefer a full-time team member vs a remote freelancer. For senior positions like a Chief Technical Officer or Head of Engineering, having a team in-house can bring added value and stability. In-house leadership teams can help you foster a positive company culture, boost morale, and provide a sense of long-term security.
By comparison, outsourcing through staff augmentation may be a cost-effective solution for companies looking to grow their teams quickly. This can be especially useful in uncertain economic times, or if you’re exploring a new market or product offering with a higher level of uncertainty. Let’s compare these hiring models in more detail.
The Cost of Hiring a Full-Time Employee vs Remote Freelancer
According to Indeed, the average salary of a full-stack software developer in San Francisco in 2023 is $145,116. To compare, hiring a freelance software developer with comparable expertise through Scalable Path costs about $53 per hour, or $106,000 per year (assuming a full-time developer that takes two weeks’ vacation annually).
When deciding between staff augmentation and hiring full-time employees, it’s important to consider factors like project length, the type and level of expertise required, and budget. Staff augmentation can be a great solution for short-term projects or for accessing specialized talent quickly and efficiently, without the long-term commitment and expense of hiring full-time employees.
When it Makes Sense to Hire Full Time
On the other hand, building a strong internal core team can foster a positive company culture, boost employee engagement and morale, and provide a sense of long-term security knowing that your team is committed to the company’s success. Ultimately, the decision between staff augmentation and hiring full-time employees will depend on the specific needs and goals of each company.
Comparing 3 Main Types of IT Staff Augmentation Platforms
When it comes to staff augmentation services, there are typically three categories of platforms to consider: task/project-based, freelance, and pre-vetted freelance.
Task-based platforms are suitable for small, short-term projects that require quick and simple tasks to be completed, such as logo design. Examples of task-based platforms include Fiverr, PeoplePerHour, and 99designs. These platforms specialize in providing access to freelancers with limited experience and skill levels, such as recent graduates or those new to freelancing.
Freelance marketplaces like Upwork, Guru, and Freelancer offer access to freelancers with a range of skills and experience levels, making them suitable for a variety of project types and sizes. While they typically do not have a vetting process, some offer screening processes for more advanced freelancers. For example, Upwork has a “pro” category for highly skilled freelancers who have passed a screening process, and Guru has a “guru” level for top-performing freelancers.
Pre-Vetted Freelance Marketplaces
Vetted freelance marketplaces, such as Scalable Path, TopTal and Turing, are ideal for complex projects that require highly-skilled professionals. These platforms have a thorough vetting process and provide more personalized service, including guidance on the type of talent needed and interviewing developers on the client’s behalf. They offer access to highly experienced and skilled freelancers who have a proven track record of delivering quality work.
Advantages of Pre-Vetted Freelance Marketplaces for Staff Augmentation
If you’re looking for a staffing solution that provides a high level of service and support, a pre-vetted staff augmentation company may be a better choice than task/project based or simple freelance marketplaces. Here are some of the key benefits of using a pre-vetted staff augmentation platform over the other options.
1. Hiring is Personalized to your Unique Role and Requirements
Pre-vetted freelance marketplaces help you hire using a personalized approach. They start by deeply understanding each unique project and company before identifying what type of talent is required.
Marketplaces like Scalable Path act as an extension of your team: they truly care about your success, so they take the time to understand your values and technical needs. This means the developers presented to you feel like a seamless fit. Their goal is to support you throughout the process, from attracting the right candidates, to developer onboarding, to ensuring their ongoing success on your team.
2. Candidates are Carefully Evaluated Before you Interview Them
Pre-vetted freelance marketplaces tend to have a rigorous screening process for candidates, ensuring that only highly skilled and experienced professionals are presented to clients. For example, Scalable Path’s vetting process includes a technical interview and coding test, suitability checks, and a culture fit interview. For us, we believe strongly that a developer’s technical ability in an actual role is more than just having them solve theoretical problems. Our team evaluates candidates using real-world coding exercises that are relevant to your company and actually correlate with job success. This ensures that clients have access to a pool of top-tier talent that has been carefully screened and vetted.
3. Less Work for You
With pre-vetted freelance marketplaces, the sourcing and vetting of candidates is handled by a team of technical recruiters with years of experience in recruiting. Talent specialists take care of the administrative tasks associated with hiring, allowing the client to focus on other aspects of their business.
4. Higher Rates of Project Success
Compared to freelance marketplaces where talent is not first evaluated, companies are more likely to find a candidate who is a good fit for their project using pre-vetted options. The candidates presented by the platform are highly skilled and have been carefully matched to the client’s needs, which increases the likelihood of project success.
5. Ongoing Support After you Hire
Pre-vetted freelance marketplaces often provide ongoing support to both the client and the freelancer throughout the project. This can include project management assistance, communication facilitation, and issue resolution. The Scalable Path team checks in on an ongoing basis to hear about the project’s progress and overall experience with the developer. This support can help ensure that the project runs smoothly, and any problems that arise are addressed quickly and efficiently.
Final Thoughts: Staff Augmentation vs Permanent Staff
Hiring full-time staff or using staff augmentation will depend on your resources, project duration, and project goals. If you’ve validated that staff augmentation is right for you, and are looking for a personalized, low-risk option, a pre-vetted freelance marketplace like Scalable Path may be the right choice.