What Is Staff Augmentation and Why Is It Important?

Staffing challenges have always been present for businesses but has declined in recent years. Finding, hiring, onboarding, training, and retaining key talent are all vital, yet time-consuming processes. This is prevalent  during periods when so many organizations face both talent shortages and skills gaps.

Staff augmentation offers a solution to those needs ensuring organizations have access to highly trained talent with the skills required to move the business forward. We’ll explore what staff augmentation is and why it is so crucial to modern businesses, and addressing how it differs from other solutions, such as temp staffing.

 

Why Is Staff Augmentation Necessary?

Before we dive into the question of what staff augmentation is, we should establish why it is necessary in the first place.

More and more organizations across an increasingly wide swathe of industries are facing critical shortfalls when it comes to available talent.

• Talent shortages in the US have more than tripled in the last 10 years.
• Almost 70% of employers report struggling to fill positions (up from just 14% in 2010).
• The relationship between employee and employer is shifting, giving employees more latitude to pursue positions they find rewarding.
• By 2030, the global talent shortage is expected to reach 85.2 million people, which will cost trillions in lost economic opportunities.

 

What’s Driving the Talent Shortage?

There is no single factor driving the ongoing talent shortage.

A combination of forces has created the “perfect storm” and made it incredibly challenging for employers to source the talent they need to operate their organizations.

Some of the factors causing talent shortage problems include:

• Baby Boomers retiring in greater numbers, and the Covid-19 pandemic accelerating that trend.
• Gen X, Millennial, and Gen Z workers lacking the skills and experience necessary to fill open job slots left by departing Baby Boomers, or they are choosing to opt out of the traditional career model completely.
• Many companies find themselves unable to attract top talent due to evolving employee expectations, prioritizing outcomes over output, providing flexibility in work locations, or achieving a better work-life balance.

With a better understanding of the staffing challenges organizations face, let’s explore how staff augmentation can be an effective resource.

 

What Does Staff Augmentation Mean?

Simply put, staff augmentation is nothing more than augmenting in-house staff through a third-party provider.

It is the process of an organization partnering with a staffing provider, either a generalist or specialist organization, to obtain key talent needed to fill empty positions.

Rather than hiring an employee (or working with a temporary staffing agency), the augmentation partner will provide a consultant with the education, training, experience, and certifications required for the position in question.

Staff augmentation differs greatly from business process outsourcing, working with freelancers, and working with temporary agencies in several critical ways.

 

How Does Staff Augmentation Compare to Business Process Outsourcing?

Business process outsourcing (BPO) and staff augmentation share superficial similarities – working with someone outside the organization to handle critical tasks and responsibilities. However, they are executed through different approaches.

With staff augmentation, a skilled professional becomes part of your in-house team(s) even if they are not an official employee.

With BPO, the entire business processes are outsourced to a team employed by a third party.

For instance, a business might outsource its payroll processing needs to a specialist firm. This process is completely removed from the original organization and handed off to that third party.

 

What Is the Difference between Hiring a Freelancer and a Staff Augmentation Solution?

On the surface, hiring a freelancer and pursuing a staff augmentation solution can seem similar because both paths involve outsourcing a business’s needs to a third party.

However, there are vast differences between these two options and it’s imperative for decision-makers to make an informed choice.

Some of the key differences between staff augmentation solutions and freelancers include:

• With staff augmentation, the organization is dealing with a company, rather than an individual. Generally meaning more professional communications and a more responsible and responsive partner.
• Staffing augmentation solutions also offer insurance that is difficult to find when working with a freelancer. For instance, the right partner can offer insurance against fraud, cybersecurity risks, errors, and general liability.
• Related to the previous point, staffing providers offer a deeper bench in terms of talent, which offers both redundancy and the ability to access additional skills or knowledge if necessary. This makes it possible to scale projects organically and ensure having access to the right talent for any project or problem.

 

Is It Better to Hire or Use Outside Resources?

Is working with a staffing augmentation provider the right choice for your business? There is no one-size-fits-all solution.

It’s important to have a solid understanding of the advantages and the disadvantages of the process before determining if it would be beneficial for your specific needs.

 

Hiring In-House

When you hire employees, you have complete control over the hiring, vetting, and onboarding process.

This ensures that anyone you hire is a good fit for your corporate culture, in addition to possessing the skills and knowledge necessary.

However, there are also numerous drawbacks to in-house hiring, including:

• Simply finding the right people can be incredibly time-consuming.
• You have no insurance against fraud, cybersecurity risks, or other threats.
• In some instances, key talent may not be available in your area.

 

When you hire employees, you are on the hook for:

• Payroll taxes
• Worker’s compensation insurance
• Vacation time, sick time, and other benefits

Once they’ve been hired, you have to worry about training, upskilling, and career development

 

Working with Staffing Augmentation Providers

When working with staffing augmentation providers, you’re able to get around the drawbacks of hiring in-house, but also gain access to several important advantages, including:

• Access to talent that might not otherwise be present in your geographic area.
• Keeping your own, in-house teams focused on mission-critical tasks, rather than hiring and onboarding processes.
• The staff augmentation provider also handles time-consuming processes like training and upskilling, freeing you to focus on big-picture tasks and running the organization.

Still, there are some disadvantages to staff augmentation solutions, including:

• Not being able to hire actual employees, which may affect things like career development and succession planning. However, when used strategically, staff augmentation enables a more agile workforce and the ability to scale up or down quickly.
• Lack a degree of control over who fills open positions, resulting in a poor fit with your corporate culture. However, with staffing augmentation, you are never stuck with a poor fit. Additionally, you are not liable for unemployment insurance and offboarding if the situation is untenable.

 

Is Staffing Augmentation Like Temp Staffing?

Temp staffing has been around for many years and offers some pretty significant benefits. Is staffing augmentation similar? That depends on what you’re comparing.

Temp staffing is precisely what it sounds like – a stopgap solution that provides you with someone to fill an open position while continuing to look for a permanent hire. Staffing augmentation is more about hiring someone who might be a good fit for your position for a limited amount of time.

With temp staffing, you’re also responsible for posting job positions, interviewing, recruiting, hiring, training, and retaining a full-time employee to fill that position, whereas with staff augmentation that is not the case.

Instead, staff augmentation allows you to access qualified, experienced professionals who have the skillsets you need, while also being able to hand over the hiring, vetting, onboarding, and talent retention processes to your staff augmentation partner.

 

Can I Hire the Contractor If I Like Them?

For many decision-makers, the question of talent retention is a major hurdle.

      What happens if you work with a staff augmentation partner and you find that you truly like the professional you’re assigned?

      What if that individual fits your corporate culture well, brings all the skills and knowledge necessary to the table, and would make a great addition to the team?

      Can you hire them?

The answer here is “it depends”. Each staff augmentation provider is unique, and every agreement with clients differs. To determine how this works, you need to consider the language of the agreement signed at the outset.

You should also ask the partner directly whether they offer the ability to hire their consultant.

 

What Happens If You Don’t Like the Consultant?

In some cases, the situation is the reverse of what we just described. Rather than finding that the consultant is a great fit for the organization, you discover that they’re not well suited to the role, or to the culture. What can you do in instances such as this?

This is where the true value of staff augmentation really begins to deliver. In most cases, your partner will have a bench of other consultants available, ensuring that you can find one who fits your needs and culture well.

The process of gaining access to new staff should be seamless with the right staff augmentation partner. Simply alert your representative that the consultant is not a good fit and you should have a resolution promptly.

To cover yourself from issues, make sure to ask your partner about their policy regarding dissatisfaction with a consultant up front, so if there is a problem, you’ll understand how these situations are handled, and be able to take appropriate action.

Some partners may be able to accommodate changes very quickly, while others may require a week or more of notice before they can swap out personnel.

 

Can Consultants Be Trusted with Confidential Information?

Many organizations deal with confidential information, including customer financial data or the business’s proprietary information. Whatever the case, it’s crucial that you’re able to trust those who have access to it. Can you trust a consultant in this way? Yes, you can.

Not only is the consultant bound to act ethically, but the agreement you sign is with the company, not the consultant.

That means the company is held liable for any breaches of confidentiality and it means the company must take all the necessary steps to ensure its employees are professional, responsible, and trustworthy.

 

Do You Have to Give Consultants Holiday or Vacation Time?

When you hire employees in-house, they are eligible for benefits with your company, such as vacation time and holiday pay. This can dramatically increase the cost of employment. Do you incur these costs with a consultant?

When you work with a staff augmentation partner, you do not incur these costs, because it is the partner’s responsibility to pay for those sorts of benefits.

Consultants do have the right to holiday and vacation time, which will impact your scheduling and workflow, just not your finances.

 

Where Do Staff Augmentation Providers Source Their Consultants?

Every staff augmentation company takes a different strategy for staff recruiting. However, it should be spelled out in the company’s documentation. If you cannot find the information, make sure to ask the representative before you sign an agreement.

Ideally, the company will source its consultants from the same talent pools as major businesses within your industry. Unsure of where your potential partner might source the talent they offer? Always discuss this with a representative before signing any agreement.

This is particularly important for industries where certifications/degrees are necessary, or where industry rules and government regulations play roles.

 

Do Staff Augmentation Companies Have Domestic Employees?

Some staff augmentation companies do offer domestic employees. Others do not. It varies considerably from organization to organization.

In some cases, having domestic contractors available may not be a deal-breaker. Working with near-shored professionals can offer access to critical talent, ensure there is no language barrier, and deliver cost savings.

However, in other cases, domestic talent is critical, particularly if you need the contractor to work on-premises.

 

MatrixPoint Can Help

At MatrixPoint, we deliver customized staff augmentation solutions designed to meet your needs and exceed your expectations.

From marketing and media strategy to project management, operational process audits to paid social media management, and everything in between, we connect you with the talented, experienced professionals you need as part of your team.

Ready to learn more about how our staff augmentation services can help your organization thrive? Contact us today by calling 800-683-6983 or using our contact form to get in touch.