Is Staff Augmentation the Same as Outsourcing?

May 20, 2024

Nearshore staff augmentation provides specialized workers to supplement your in-house efforts. Find out why it’s better than traditional outsourcing.

Whether you need to hire talent for a special project or need to expand your team, you may be considering staff outsourcing. In recent years, though, remote teams have become more common. You may also have heard of another way to book external workers: staff augmentation.

What constitutes outsourcing in today’s workforce? What is meant by staff augmentation? What’s the difference between it and staff augmentation? And most importantly, which is right for your business?

Outsourcing to An External Workforce

“Outsourcing” generally refers to hiring an off-site team to fulfill an ongoing business need. Examples are call centers and support staff located overseas. The lower cost of labor and diverse time zones allow companies to expand their customer service hours without bloating their personnel budget.

However, outsourcing can be risky as your business doesn’t have direct control over your outsourced staff. Linguistic and cultural barriers can lead to a poor customer service experience. Most importantly, those workers are far removed from your core team — which means they aren’t always the best option for IT support and software development projects.

Outsourcing a Project

“Outsourcing” can also mean hiring an outside firm or contractor(s) to work on a specific project. This could be an internal initiative (e.g. a rebranding or business restructuring), a major project (e.g. a website redesign), or deliverables for a client. Any of those could be hard to achieve with only your in-house staff. You’ll end up with a long project timeline, an overburdened team, or both.

By hiring an external vendor who will recruit the workers and manage the project, you free up your own team. It’s an enticing arrangement, especially for IT tasks that can easily be done remotely. That’s why many companies are indeed outsourcing their technical needs and web/app development.

The problem with many technical, coding and engineering projects is that your business needs to maintain tight control of the outcomes — especially if it’s for a client. As with outsourcing a team or department, your business ultimately has minimal interaction or oversight. That’s always a risk, especially if you’re trying to liaise between your client and your vendor.

Yet outsourcing the project could lengthen the timeline even more, and you can’t always recruit and hire new employees. More than 40 percent of CIOs report that they simply can’t find suitable experts to come on board full-time.

The staff augmentation approach combines the best of both outsourcing and in-house development.

Augmentation: Supplementing and Empowering Your Current Staff

The difference between staff outsourcing and staff augmentation is right there in the names. When you outsource, you select an outside team as the source of labor and expertise. When you augment, you add to your existing team — on-demand and, often, for less cost.

Staff augmentation companies provide specialized workers for a particular need, such as a project that needs extra hands-on-deck. These additional team members aren’t just there to pick up the slack, though. They enhance and supplement your in-house efforts. It’s a bit like hiring temps, except staff augmentation comes with a strategically placed group of skilled workers. You also don’t have to provide equipment or office space as the augmented team is usually off-site.

That’s why staff augmentation is often used when companies want to push through a big project and don’t have sufficient in-house resources. In contrast, outsourcing tends to be a longer-term arrangement meant to fulfill an ongoing service need (tech support, customer service, etc).

All these benefits make staff augmentation ideal for IT, development, and industrial projects, where additional team members must be able to integrate well into your current staff. Typically, you’ll work with a staff augmentation vendor who not only handles admin and training but also allocates the best specialists for your needs. Yet you can supervise and coordinate their efforts.

Staff Augmentation vs. Outsourcing: Which is Right for You?

Not all departments or projects require you to be hands-on. There’s a reason why general tech support and call centers are often outsourced. It’s relatively easy to hand them a script or bounce support tickets to them, then let them roll.

The main issue is the language/cultural barrier that may make it difficult for your customers and employees to work with the outsourced team. Thankfully, there are plenty of onshore and nearshore outsourcing options if this is a concern.

If you need highly skilled workers to become a strategic part of your team, though, staff augmentation is usually a better option. Hiring is typically done through a project-based contract. You can scale up or down depending on your staffing needs. And best of all, staff augmentation is typically sourced from countries that are geographically and culturally similar. This can definitely help with communication!

In short, many businesses use both options, depending on their needs. Either way, it’s an excellent way to reduce your labor costs, boost your efficiency, and gain an advantage in an ever-competitive market.

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