In today’s competitive business environment, the key to success is twofold. The ability to reduce both the costs and achieve operational efficiencies, while growing. Technology is at the heart of the business and you can bet on the swelling number of IT projects, so how are companies coping? They’re using staff augmentation to determine what to outsource and supplement with independent contractors.
In this article, we are going to delve deeper into staff augmentation, the benefits, and why it has become a norm for many businesses.
What Is Staff Augmentation?
Simply put, staff augmentation is the practice of hiring independent contractors like software developers for skills assistance as opposed to having a team of permanent employees.
Simply put, staff augmentation is the practice of hiring independent contractors for skills assistance as opposed to having a team of permanent employees. At some point, businesses find themselves in a skills deficit situation or overwhelmed with work requiring them to hire an extra pair of hands and that’s where staff augmentation comes in.
Staff Augmentation vs Professional Services
Owing to the similar nature of staff augmentation and professional services, they are more than often confused and interchangeably used. However, once you get into the nitty-gritty of the two, that’s when the difference becomes apparent.
For starters, staff augmentation entails building distributed teams based in other countries. In this type of arrangement, the workers operate off-site although they are accountable to the parent company.
On the other hand, professional services usually involve a packaged contract whereby a company hires a distributed team of IT workers to complete a discrete task but delegates the management to the main contractor.
In both outsourcing methods, remote team communication through video, email, and chats is important as no party has the luxury of one-on-one consultations. It’s also important to note that professional services may cost more compared to staff augmentation as you get vast and comprehensive services including overseeing implementation.
Valuable Insights into the Software Outsourcing Market
According to a 2018 report by StackOverflow, the software development job market has continued to see the demand outpacing supply. As a result, hiring a software developer in a country like the US takes an average of 4 months does to the shortage.
However, there is good news for companies looking to hire dedicated developers. According to a survey conducted by Statista, approximately 38% of US companies are outsourcing programming jobs.
The global outsourcing market size figure varies depending on the kind of industry segments and you include in your definition.
Recent estimates by the Information Services Group, put the total global revenue at $70 Billion although this estimate is derived from contracts exceeding $25 million.
Forrester Research on the other hand estimate that the global outsourcing spending both at the company and government level in 2017 was at least $503 billion.
Big Data Behind the Increasing Software Developers Demand
For the last three years, businesses have consistently continued to demand accessibility, agility, and fuller view of customers behaviors to make informed business decisions. This demand has seen big data software market making headlines within the software outsourcing trends.
All this is made possible by multiple software tools that allow businesses to analyze and store huge amounts of data. Not forgetting an equally competitive lot of project management tools.
On top of aiding in decision making, this accumulated data has given business the dexterity to expand markets and facilitated the creation of single autonomous platforms whereby data resources can be exchanged in real time.
As a result, business owners looking to stay afloat and secure their enterprise’s future are hastily looking for ways to adopt these automated software tools. These monsters of tools are capable of analyzing the large magnitude of diverse and complex data sets faster and efficiently.
Being a contemporary technology, the gap between the existing number of developers capable of handling big data software applications is limited. Today, only a small portion of the developer’s population is well versed with this technology.
Reasons for Increased Popularity of Outsourcing in IT Staffing
Here is a sneak preview as to why staff augmentation has become a darling to many businesses.
As the technology space continues to expand, the market has seen an increase in the uptake of tech skills leading to tech talent shortage. And with the current number of tech graduates joining the industry, it will take time to bridge the deficit.
Luckily, with a nearshore team, you can easily overcome this problem as you get to hire straightaway without having to deal with all the recruitment and background formalities. But perhaps, the most significant benefit is reflected in the reduced software development cost.
Essentially, it means you don’t have to shoulder additional payroll duties as you get to hire based on your businesses’ fluctuating staffing demands.
Control Over Staff and Project
Having a distributed team at your disposal gives you greater insights into the progress of your project plus you get to pinpoint what every team member is engaged in.
Using modern team communication tools, everyone can be integrated into and aligned with your existing centralized company structures making monitoring easy.
That notwithstanding, integrating outsourced resources into your business processes also helps augment team productivity thanks to the remote team management software that help clock the number of hours worked.
Helps Focus on Core Competencies
Remote team collaboration helps your business offset the burden of spreading too thin allowing you to focus on what you are good at. As such, you are able to beat any aggressive project deadlines by tackling a project from two fronts.
Goes without saying, it also reduces the pressure on your in-house workforce, which could significantly increase team efficiency.
Compared to local recruitment, outsourcing gives you an upper hand in terms of scaling either upwards or downwards without attracting payroll liabilities. With the help of an effective remote team management software, you are able to channel resources to the needed areas basing on the revenue upturns.
Objective Voice and Insight
In most tech jobs, the creativity limits only lie in the mind of individual team members. With the right project management tools, the question shifts from how to hire a developer to when you can hire the best.
Outsourcing introduces fresh ideas and objective opinions on how you can improve things as no one have the time to indulge in office politics.
Technology roots have infiltrated every available industry from financial institutions, legal firms, media, entertainment business, business enterprises to telecommunication. Therefore in the next coming years, almost all these industries will require to keep up with the technology curve and for that, they will need IT expertise to build their projects in a timely manner and as required.
Such an undertaking can only be achieved by leveraging creative hiring methods like staff augmentation. With this blueprint on how to manage a remote team, you should be ready to take your business to the next level.