Nearly 80% of CIOs admit that talent scarcity is the biggest obstacle of meeting innovative goals; preventing many businesses from moving forward.
The tech industry is in a paradox – Digital transformation is booming, but finding qualified professionals is getting tough.
Due to this, many Fortune 500 companies have started to rely on staff augmentation models to address this gap.
This includes Google, IBM, and Microsoft; they needed specialized expertise for cloud services and Android development.
Staff augmentation has become a practical approach in managing their costs and finding the niche professionals for their tasks.
This guide breaks down the different kinds of IT staff augmentation services and how you can choose the right one.
Staff Augmentation Models
Whether it’s working with an external team or outsourcing your project to a third party, you get extra manpower to finish your tasks.
You get the flexibility to bring in specialized skills or additional support exactly when you need them; without spending hours onboarding them.
Such models ensure your projects run smoothly and you pay the professionals on hourly basis or after project completion.
Different Kinds of Staff Augmentation Business Models
Although it sounds like an easy process, every company has their nuances. Finding what works for you, depends on 3 factors:
- Lack of niche talent
- Unable to meet project timeliness due to limited staff
- Project timelines are tight and there’s an absence of hiring permanent employees.
When you use staff augmentation engagement model, you get professionals who can work with your in-house teams.
To help you understand different models, check out the table below:
| Model | Definition | Features | Ideal For |
| Onshore | Hiring professionals from the same location; often work from client’s office. |
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| Offshore | Working with professionals from nearby cities. |
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| Long-Term | Hiring professionals for months or years based on requirements |
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| Project Based |
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| Managed Services | Outsourcing your project to a third party |
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Lack internal bandwidth to manage teams |
Complete Breakdown of Staff Augmentation Business Models
Now that we know what each model entails, here are the pros and cons for each. And the business impact you can expect.
| Model | Pros | Cons | Business Impact |
| Offshore |
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| Managed Services |
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| Onshore |
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| Project Based |
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| Long-Term |
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Staff Augmentation Delivery Model
This type of model focuses on how your resources are sourced. The delivery model defines:
- Collaboration between the client, your augmented resources, and the vendor.
- Covers which tools will be used.
- How accountability for outcomes is structured.
How This Works:
Under a typical delivery model, external engineers join your existing team and follow your workflows, tools, and coding standards. They behave as internal employees, while remaining on the vendor’s payroll.
The client’s leaders (CTO, PM, product owners) manage both internal and augmented staff in one backlog. They keep control of priorities, quality, and timelines.
Advantages
- Quick access to skills without rebuilding your delivery process from scratch.
- High control of projects due to planning, prioritization, and acceptance criteria stay with the client.
- Flexibility to scale up/down as project load or budget changes.
Disadvantages
- Requires strong internal PM leadership to coordinate mixed teams.
- Risk of misalignment if onboarding and expectations aren’t defined.
- Potential friction across time zones and cultures if the model is global.
How They Work Together
The delivery model defines how talent is deployed. On the flip side, a business model defines how value is exchanged. Both must align for staff augmentation to succeed.
For example, offshore delivery paired with T&M pricing leads to cost savings. Business owners benefit most when the delivery execution and commercial structure support the same objectives.
Staff Augmentation Pricing Model
When it comes to the price, there are 3 models for staff augmentation models: Fixed, Continued, and Monthly Retainer. This section will cover each one:
Fixed Price Model
IT outsourcing company will give you a fixed price for their services. It could be for a set project or series of tasks. This model is ideal for those who have a fixed project scope and well-defined timeline.
Advantages:
- You’ll know the exact cost you’ll be paying. Managing your budget is easier.
- The scope of work and project deliverables are defined.
- There’s a lower risk of your project quality getting affected.
Disadvantages
- Limited scope for innovation and creativity.
- Limited collaboration between teams.
- Changes in project deliverables will incur additional costs.
Continued-Term Model
You get a team of professionals who will work with you for a fixed duration. It could be for a couple of weeks or maybe years. The price varies depending on their expertise and monthly/hourly rate.
Advantages
- There’s room for flexibility and innovation.
- Collaboration between the client and staff augmentation company is high.
- Project timelines are flexible.
Disadvantages
- Cost uncertainty; depends heavily on the project deliverables.
- Project deliverables aren’t well-defined.
- Chances of missing the deadline is higher.
Monthly Retainer
There will be a fixed price that you’ll need to pay every month. You’ll get a team of professionals at your service.
Advantages
- Fixed costs and managing budgets is easier.
- You can request new services without negotiating for new contracts.
- You may receive priority service.
Disadvantages
- There’s a lack of clear deliverables.
- Limited room for negotiation.
- Risk of overpaying for a project.
How to Select the Right Staff Augmentation Company
Choosing the right model begins by understanding your business priorities. Each model has its own strengths and weaknesses. Ask yourself:
- Do we need niche expertise?
- What’s the project deadline?
- Does your team have the bandwidth to complete the project?
Keep in mind the budget constraints as well. Some models will have a higher upfront cost. If you’re looking for a faster project delivery, onshore delivery works best.
When Staff Augmentation Model Isn’t the Right Fit
- You need full ownership to outsource your project. Managed IT services may be a better option for you.
- The project requires core competency that may internalize over time.
- You need staff continuity within your organization. Then hiring full-time employees makes sense.
- You’re unable to manage the project on your own and there’s no project manager.
Key Takeaways
Many businesses still hire full-time employees. They have the bandwidth to train them on their current projects. But when there’s a sudden work spike and you need resources instantly, staff augmentation comes in.
Most companies offer staff augmentation models that cater to different requirements. These models usually have a fixed price. You get access to a large pool of resources and usually join within 48 to 72 hours.
Get in touch with a staff augmentation company today to learn more.
Frequently Asked Questions
Q1. What’s a staff augmentation model?
It’s a hiring approach where a company lets you temporarily hire their team for your project. These professionals have years of experience and have niche skills in their domain. These models give you the flexibility to handle work spikes effortlessly.
Q2. What’s the difference between staff augmentation and outsourcing?
In outsourcing, you give your project to a third party. They’ll handle everything end-to-end. Managing the project through outsourcing gets challenging.
In staff augmentation, you get to temporarily hire a resource that works with your in-house team. These professionals are skilled in their domain and offer additional support to meet your project deadlines. Collaboration and managing the project is easier.
Q3. Is staff augmentation cost-effective?
Yes, it is! You have to pay for the services depending on an hourly or project completion basis. Most staff augmentation companies will have different staff augmentation models for you to choose from. Each model will have a fixed cost.
Q4. What are some risks of staff augmentation?
Communication gaps, skill mismatches, and security issues are the top 3. Such risks can be prevented if you make them sign an NDA and have defined parameters.
Q5. How soon can the resource join?
Depends on the model you choose. But most professionals can be onboarded within 48 to 72 hours.
