In 2024, software development will remain the most outsourced IT service. Spending on IT outsourcing reached $519 billion in 2023, and by the end of 2024, we should expect this number to be even higher. Gartner projects that worldwide IT spending will increase by 8% in 2024. 

While 54% of global organizations see tech talent shortages as a barrier to change,  many business owners are now using IT staff augmentation  to swiftly access specialized skills, scale their teams flexibly, and boost project agility without committing to full-time hires.

To enhance your understanding of this model, we will explore the advantages of IT staff augmentation services and offer guidance on identifying and choosing the most suitable IT staffing partner to meet your specific requirements.

What Is IT Staff Augmentation?

According to the definition of staff augmentation, it is one of the software development outsourcing strategies for companies to extend their internal teams with external experts on a permanent, short-term, or long-term basis. Tech staff augmentation allows organizations to find the right, highly qualified workforce and easily adjust the size of the team in accordance with their business needs. This approach is particularly beneficial during peak project periods, where additional manpower is crucial for meeting tight deadlines and delivering high-quality outcomes. 

The Main Types of Staff Augmentation

Staff augmentation can be classified based on various criteria, including the nature of engagement, the skills required, and the duration of the collaboration. Here are some common classifications for staff augmentation:

By Engagement Type:

  • Temporary Staff Augmentation: Hiring resources for short-term projects or to fill temporary gaps in the existing team.
  • Long-term Staff Augmentation: Extending the team for an extended duration to work on ongoing projects or provide continuous support.

By Skills and Expertise:

  • Technical Staff Augmentation: Bringing in specialists with specific technical skills required for a project.
  • Non-Technical Staff Augmentation: Hiring designers, artists, or creative professionals.
  • Functional Staff Augmentation: Hiring professionals with domain-specific expertise or business process knowledge.

By Project Phase:

  • Development: Hiring additional programming specialists to handle programming tasks more efficiently. 
  • Testing and Quality Assurance: Adding resources specifically for testing and ensuring the quality of deliverables.
  • Maintenance and Support: Extending the team to provide ongoing maintenance and support services.

By Location:

  • Onsite Staff Augmentation: Bringing in resources to work physically at the client’s location.
  • Offshore Staff Augmentation: Engaging resources located remotely, often in a different geographic location.

By Scope of Work:

  • Full-time Staff Augmentation: Hiring resources to work full-time on a project.
  • Part-time Staff Augmentation: Engaging professionals on a part-time basis, allocating specific hours per week.

By Scale:

  • Individual Staff Augmentation: Hiring individual professionals to fill specific roles.
  • Team Staff Augmentation: Building entire teams to work on projects.

The Key Benefits of IT Staff Augmentation

While every business scenario is unique, there are common advantages of this model you can benefit from, so let’s review the most important ones.  

IT staff augmentation benefits

Flexibility 

As mentioned previously, flexibility is among the top reasons for project outsourcing overall and for IT team augmentation in particular. This flexibility arises from the ease of replacing any team member within a relatively short time, as compared to the replacement of in-house employees. IT staffing firms take over the recruitment and HR hassles, letting you focus on adjusting the direction and the scope of the project faster.

Cost-Efficiency

One of the main benefits of IT staff augmentation is the opportunity to access skilled professionals while avoiding overhead costs associated with hiring full-time employees. In this case, you don’t pay for any organizational or administrative expenses including but not limited to recruitment costs, efficient rent, training, and onboarding. While the cost structure of the IT staff augmentation model is transparent, you have to cover specialists’ salaries and vendor fees, which, in turn, enables you to plan and spend your budget more effectively.

Access to a Global Pool of Talent

Scarcity of local tech talent or budget constraints are other issues the IT augmentation model successfully addresses, opening the access to global tech talent pool. 

Oleksandr Boyko: Delivery Director at SPD Technology

Oleksandr Boyko

Delivery Director at SPD Technology

“Being taught by the pandemic, the majority of companies have already switched to remote cooperation of some kind, opting for project outsourcing as one of the worth-considering strategies. Accessing the global pool of talent creates new opportunities for organizations to leverage the latest technology, increase production capacities, and secure leading market positions as a result.”

Research and statistics prove it as well. According to Grand View Research, the outsourcing industry will be valued at $525.2 billion by 2030. In 2024 alone, according to Statista, business process outsourcing in the United States of America will generate up to $134 billion in revenue. So, with the growth of the outsourcing industry, the talent pool of qualified professionals will eventually become even richer, while IT staff augmentation is a viable strategy to tap into it. 

Shorter Time to Hire

Staff augmentation providers often maintain a pool of pre-screened and qualified IT professionals. This will allow you to quickly access a range of skilled individuals ready to start working on projects immediately. Vendors typically have well-defined and streamlined recruitment processes if required talent is unavailable, so the total time to hire is likely to take some weeks instead of months. 

Knowledge Transfer and Sharing 

Vetted augmented staff can power up your in-house experts. This can be achieved with the help of various methods, for example, pair programming, where augmented staff collaborates with existing team members on coding tasks. This fosters knowledge transfer, improves code quality, and enhances teamwork.

When Is IT Staff Augmentation the Best Fit for Your Organization?

After the benefits of tactic to hire tech talent become clear, let’s review common scenarios when this model will be the most suitable for your organization. 

When IT staff augmentation makes sense

Tight Project Timelines

Tech team augmentation is an effective strategy when the project timelines are tight. By choosing this approach, you will be able to hire 4-6 additional specialists in days to weeks, while your tech staff augmentation vendor will ensure their professional and cultural fit for your project.

Here, at SPD Technology, we have numerous cases, where we needed to assemble a team fast to develop a product within a tight deadline. One of those cases includes enhancing a U.S. tech provider’s multi-tenant data management solution. This is a great example of how timely team expansion can benefit an entire organization, as we quickly assembled a team of 7+ experts to deliver results under specific time constraints. The client was running out of space in the in-house local database, which was going to result in blocking the onboarding of new clients.

The Time-to-Market Pressure

IT staff augmentation model allows you to quickly access a pool of pre-screened and qualified professionals. The rapid availability of skilled resources enables companies to assemble project teams promptly, reducing the time it takes to initiate development or other IT-related activities. This allows the organization to meet tight project timelines, accelerate development cycles, and release products or features faster.

Lack of HR Expertise In-House

IT staff augmentation vendors have established processes for screening and vetting candidates. They can assess technical skills, verify qualifications, and check references efficiently. This reduces the risk of hiring mismatches and ensures that the candidates presented to the organization meet the required standards.

Specialized Skill Requirements

If you are currently creating a software solution but face the necessity to leverage highly specific technical skills, tech team augmentation would be the right choice. Staff augmentation allows organizations to tap into a vast pool of specialized talent. Whether it’s expertise in a specific programming language, technology stack, or domain knowledge, staff augmentation providers often have professionals with niche skills readily available. 

As for our experience of bridging the tech skill gap according to the staff augmentation model, one  of our customers turned to us with the request to transform their legacy notary app. Since the app was developed using PHP and Angular (Angular is used by only 17,5% of developers globally), we had to recruit additional tech specialists skilled with these technologies. In response to this request, we provided proficient talent quickly, to modernize mission-critical business functionality.

IT Staff Augmentation vs. Other Models

To truly understand the intricacies of the IT staff augmentation model, let’s compare it to the closest alternatives. 

IT staff augmentation vs other models

Master Vendor

The master vendor model is a staffing strategy where a single vendor, known as the master vendor, is responsible for managing and coordinating all staffing requirements for a particular project or across multiple projects within an organization. The master vendor takes charge of sourcing, selecting, and managing various subcontractors or staffing agencies to fulfill the required roles. The master vendor option is particularly suitable for businesses with complex and large-scale projects that require a diverse range of skills.  

Compared to the IT staff augmentation model, the master vendor approach usually takes more time for the initial setup and coordination among multiple vendors.  When implemented right, this tactic offers more  scalability for large projects but may have limitations in adapting to rapidly changing project requirements. Staff augmentation, in turn, is more flexible and “light-weight”, which allows for quick scaling of the teams up and down,  making it more suitable for small-to-midsize projects with dynamic needs.

Staff Augmentation Services vs. Managed Services

The major difference between staff augmentation and managed services model is in the management and selection of candidates for various roles. The software team augmentation allows you to personally choose experts and organize their workflow with the methods you consider to be the most fitting ones. Your IT staff augmentation vendor will handle the recruitment, HR, and administrative tasks with all the associated paperwork, leaving you free to focus on your core responsibilities and business processes. You will be able to manage your extended team as a part of your company.

With the managed services model, the outsourcing software development company will take care of some aspects of your project. More often than not, all the coding and software development activities will be covered by the IT provider. This model allows you to have no in-house team at all. Moreover, you don’t need to spend any time with your remote development team. There could be exceptions, as IT providers serve their clients as well as they can, but it is quite common not to know who exactly is working on your project, what the assigned developers are doing at the moment, and what decisions are being made to achieve the final goal. If you want to micromanage and fine-tune the development process, the managed services model may not be the best option for you.

Oleksandr Boyko: Delivery Director at SPD Technology

Oleksandr Boyko

Delivery Director at SPD Technology

“The managed services model is a great fit when you are ready for a greater degree of delegation, want to optimize the activities of your in-house team by transferring some of them to the outsourced team, and prefer to focus on your business and marketing activities. Additionally, keep in mind that this model’s providers frequently have experts or even entire teams “on bench.” This means that you will have a quicker start as compared to that with augmented staff. With managed services, you might be able to start developing your product immediately, or very soon after the signature of the contract.”

Staff Augmentation Services vs. Dedicated Team

At first glance, these two models seem to be similar. However, in the Dedicated Team model, the IT provider takes over more responsibilities. With software staff augmentation, you manage all the temporarily hired experts, while when hiring a dedicated team, the team is managed by the IT provider. 

Below are the most common situations when it makes sense to consider the dedicated team model over IT staff augmentation?

  • The project has a long duration and requires ongoing support and development.
  • When extensive knowledge transfer is necessary, having a dedicated team can facilitate a deeper understanding of the project requirements, business processes, and industry nuances.
  • If there is a desire to build a long-term strategic partnership with a dedicated group of professionals, fostering a sense of loyalty and commitment to the organization’s goals.

Staff Augmentation Services vs. Building Your Own Offshore Development Center (ODC)

In those cases, when you need to extend your team with a considerable number of experts, let’s say 40+, you can think about setting up your own Offshore Development Center (ODC). It makes sense to establish your ODC in a country with a better business environment and access to a larger tech talent pool that meets your needs.

To establish an ODC, you should approach an IT provider that can launch a development office on your behalf in a foreign country. For a fee, this ODC vendor will handle the recruitment of your staff, find the required office space, and work with other service providers on issues like the Internet connection, furniture, supplies, and so on. After these aspects are taken care of, you will be able to manage your new team and office on your own as part of your company. 

That’s why with Staff Augmentation, when your project is complete, your hired experts just stop working on it and are transferred to another client. With ODC, you will have an entire development team to lay off or reassign elsewhere when the project at hand has completed development.

How to Choose the Right Staff Augmentation Model?

Choosing the right staff augmentation model is a critical decision that depends on various factors, including project requirements, budget constraints, and organizational preferences. Here are some key steps to take to help you make the right decision.

How to choose the right staff augmentation model
  1. Define Your Project Requirements. Clearly outline your project’s scope, objectives, and timeline, including identifying the specific skill sets and expertise needed for successful project completion.
  2. Assess Your Budget Constraints. Evaluate your budget limitations and determine how much you can allocate for staff augmentation. Consider the cost-effectiveness of different models, including hourly rates, project-based fees, and long-term contracts.
  3. Evaluate Project Duration. Take the duration of your project into account. If it’s a short-term project with a defined scope, a project-based or short-term model might be suitable. For ongoing or long-term needs, consider a Dedicated Team Model.
  4. Ensure Cultural Fit. When augmenting a tech team, it’s crucial to consider not only the technical skills of potential candidates but also their alignment with the organization’s values and work ethic.  For this goal, consider incorporating behavioral interviewing techniques and informal meetings that can provide valuable insights into how a candidate might integrate into the existing team. 
  5. Consider Compliance Matters. Understand the legal and compliance aspects associated with different staff augmentation models, especially if you are dealing with international teams. Ensure that the chosen model aligns with relevant labor laws and regulations.
  6. Run a Pilot Project Test. Consider starting with a small pilot project to test the effectiveness of the chosen staff augmentation model. Evaluate the performance, communication, and collaboration during the pilot before committing to a larger engagement.

What Is the Staff Augmentation Process?

The process may vary depending on each particular case. However, it will most likely contain the following steps:

  1. Exploration and Requirements Gathering. At this stage, you have to identify the required expertise and skill set, the desired number of developers, and specify the time frame, during which you will need to boost your team.
  2. Candidates Search and Selection. After the requirements are clear, the outsourcing vendor starts selecting the candidates best-matched with your project. IT providers usually have software developers and other tech specialists on the bench or can quickly find the required specialists on the local IT labor market. 
  3. Screening and Interviewing. Depending on the agreement with your IT staff augmentation vendor, you as a customer, may also take part in resume screening, choosing the candidates who match your expectations best. You are also welcome to schedule and take  part in the interview process, ensuring not only professional but cultural and personal fit. 
  4. Final Selection and Onboarding. At the last stage, selected candidates receive job offers from the IT staff augmentation company. Now, it’s necessary to integrate the newly selected candidates into your existing team, familiarize them with your established workflows, and give your project development a boost. 

Considering the most common variables, the hiring process can take from 10 to 21 days.

Feel like offshore software development is the bridge to your project’s future success? Find everything you have to know about this strategy in our comprehensive article!

Possible Challenges of IT Staff Augmentation

While IT staff augmentation can be a winning strategy for companies, it has its fair share of challenges, including those related to managing relationships, communication, security, and the quality of work. Let’s consider the most common ones and find the applicable solutions.

IT staff augmentation challenges

Planning and Communication

Since team members are located in different countries and time zones, speak different languages, and belong to different cultures, there may be some miscommunications, delays, and misunderstandings that can impact the final result. A multiple-team planning approach to mitigate schedule risks and manage all dependencies can help, as proven by our experience in developing an Aggregated Merchant Portal for a global gift cards distribution company. 

The specifics of the project required collaboration with various teams distributed across different locations. Daily, the SPD Technology’s team located in Kyiv and Cherkasy had to coordinate the work with the product and development teams in Pleasanton, CA, and the team in Miami. On-demand, we also had to collaborate with other BHN teams, for example, for integration with the internal Payment+ system that was developed simultaneously.

Security Concerns

One of the main challenges of any remote work is security aspects. Sharing sensitive data and access to your business-critical systems with outsiders must be covered by robust and modern security measures such as: 

  • Confidentiality agreements
  • Secure communication channels
  • Strong access control mechanisms
  • Secure coding practices
  • Sensitive data encryption
  • Regular security training and audits
  • Compliance with industry standards. 

Development Practices Consistency

Differences in coding standards, methodologies, and tools may lead to integration issues and a lack of cohesion in project development. A proficient vendor will have a well-defined process for assessing and aligning the development practices of their candidates with the client’s standards. This may involve pre-screening candidates based on their familiarity with specific tools and coding practices. The vendor can also facilitate training sessions to ensure consistency in development approaches.

Knowledge Retention

Retaining institutional knowledge is a big challenge and may lead to disruptions. A reliable vendor will always implement knowledge transfer mechanisms, documentation practices, and collaboration tools to ensure that knowledge is shared and preserved. This may include regular knowledge-sharing sessions, maintaining project documentation, and using collaborative platforms that facilitate seamless information exchange.

Cultural Compatibility 

Differences in work culture, communication styles, and collaboration practices between in-house and augmented teams can create challenges and hinder effective collaboration. Experienced vendors deeply understand the importance of cultural compatibility. They can assess candidates for their ability to adapt to different work cultures and provide guidance on cultural nuances. Clear communication channels and regular check-ins can also help bridge cultural gaps and foster a collaborative environment.

Extended Team Onboarding

While integrating augmented team members seamlessly into existing projects and workflows can be time-consuming and may lead to delays in project timelines, a competent vendor will have a structured onboarding process that includes orientation sessions, training programs, and ongoing support.

How to Select an IT Staff Augmentation Company?

Despite all the benefits of extending your tech team with the help of the third-party vendor, finding a reliable IT staffing partner is a complex challenge that requires a holistic approach. Here are the key factors to consider while making your decision.  

Location

When it comes to offshore IT staffing firms, the actual geographical location is one of the key factors in finding a partner. Consider factors like cultural differences, time zone differences, the number of available talent, tech expertise, salary levels, and English proficiency before making your decision.

Reputation

After you’ve made up your mind on the geography where your staff augmentation vendor must be located, it’s time to check the reputation of the IT providers based there. Before the provider candidates have been shortlisted, it will be a good idea to look for reviews on platforms like Clutch, Google, and Facebook. Feel free to ask the staff augmentation companies to provide references for their previous work. Awards and rankings can be another means of evaluating the provider’s reputation.

Scaling Capacity

It is important to know the recruitment capacities of the chosen country if you are planning to grow your outsourcing team in the future. A large talent pool available in the country of your choice does not always mean that you will be able to quickly put together a development team. In fact, sometimes creating a development team can take months. So, look for large or mid-sized outsourcing providers, as they usually have some talent on bench, and it is easier for them to attract and train new experts as the need for that arises.

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Brand Image

The success of your project is created by people. That’s why it makes sense to check the IT provider’s reputation as an employer on the local IT market. If an IT provider takes care of their employees, it will be easier for you to control the retention rate within your development team.

Established Delivery Model

It makes sense to partner with companies that have a proven track record in building software remotely. The vendor’s experience in implementing similar projects will be a big plus. Additionally, long-lasting partnerships are also a sure sign that the IT provider is a truly reliable business partner.

Developed Infrastructure

This might seem obvious, but it is important to ensure that your potential IT staff augmentation partner will be able to run processes efficiently and has all the necessary hardware, software, and network resources on-site to deliver staff augmentation services.

Highest Security Standards

Security should be a priority for everyone involved in the development process. Today, it is indispensable for an IT provider to comply with international security standards, including ISO, PCI, and HIPAA. Your IT provider must necessarily have secure office facilities, protected IT infrastructure, and experts who are capable of mitigating the security risks.

Our Experience in IT Staff Augmentation Services

Here at SPD Technology, we have over 18 years of experience in delivering custom software development services and currently employ 600+ experts. Our in-house experts are highly-skilled with the latest technologies and have deep industry knowledge in such domains as FinTech, LegalTech and eCommerce. Our customers include Fortune 500 companies with 1000+ employees and global representation. 

Oleksandr Boyko: Delivery Director at SPD Technology

Oleksandr Boyko

Delivery Director at SPD Technology

“As an example of our staff augmentation services, we have managed to extend our team by a factor of 6 within six months in response to client demand, providing experts for Poynt, a revolutionary open commerce platform and the inventor of the Smart Terminal. We began our partnership with Poynt in early 2019 and have since become their primary development partner, responsible for the company’s two principal business directions.”

As your strategic partner in staff augmentation consulting and tech talent providing, we will take care of the staff augmentation process, leveraging the expertise and experience of our powerful recruitment department that can source the technical experts accurately matched with your project requirements. 

Conclusion

Staff augmentation is a viable recruitment model for business organizations of any size. Implemented properly, this approach can help you make your organization more cost-effective, achieve an entirely new level of flexibility (as compared with in-house teams), and, most importantly, leave you free to focus on your core business objectives.

Hopefully, this article answered your questions about what is staff augmentation, what are its main benefits, models and challenges. If you need additional help from an experienced staff augmentation company, you are always welcome to reach out to us. 

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FAQ

  • What is staff augmentation?

    This is a business strategy when a company supplements its existing team with external professionals or specialists to fill skill gaps, meet project demands, or enhance productivity. This approach allows organizations to scale their workforce quickly without the long-term commitment of hiring full-time employees.