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IT Staff Augmentation or In-house Recruitment: Which is Right for You?

IT Staff Augmentation or In-house Recruitment: Which is Right for You?
blog-author Avdhoot TL, Technical Writer

Let’s face it – staffing is one of the most challenging jobs for IT companies. This process is time-consuming, lengthy, and requires careful review of potential candidates.

However, the USD 430 billion IT outsourcing market offers numerous options in the hiring segment. IT staff augmentation is one such module that keeps challenging the traditional recruitment process. Why?

Well, team augmentation offers multiple benefits like cost savings, scalability, and access to specialized talent. Still, you might wonder if this hiring approach suits your business. ‘Should I approach staff augmentation companies or hire a full-time in-house employee?’

The answer to this question isn’t very straightforward. Read this blog to understand these recruitment strategies and decide on a pertinent one for your organization.

Why are Staff Augmentation Services in High Demand?

Why prefer staff augmentation?

IT staff augmentation is an approximately USD 93 billion market. This statistic implies that such a temporary hiring solution is popular amongst several businesses.

But why do companies prefer team augmentation?

Well, here are some of the valid pointers that testify to the significance of this outsourcing service:

  • Companies can access global talent at reduced costs by connecting with reliable staff augmentation companies
  • The hiring team can save time in conducting interviews and technical rounds for assessing potential candidates
  • Businesses do not need to offer perks like incentives, bonuses, insurance, and appraisals
  • Companies can ramp up or down the temporary staff as per their project requirements
  • There are no long-term commitments between a company and the hired candidates
  • These pointers are some of the basic and major reasons businesses prefer IT staff augmentation.

Why do Some Businesses Prefer Hiring Candidates Conventionally?

Why do Some Businesses Prefer Hiring Candidates Conventionally?

Staff augmentation can be helpful for many companies in the modern era. However, most firms still opt for a traditional approach to meet project requirements.

Here are some of the crucial pointers for preferring the conventional way of hiring full-time employees:

  • Full-time employees dedicate their complete focus to the company’s projects and are long-term assets
  • The staff member understands the operations and culture of the organization profoundly
  • Investment in training full-time employees can give good returns in the long run
  • Businesses have complete control over the working of the staff

Even full-time remote employees can visit the office whenever required if they live in the same city. So, if you want to profit from such aspects, in-house recruitment can be a good choice.

IT Staff Augmentation vs. In-house Recruitment: Head-to-Head Comparison

Now that you individually understand staff augmentation and in-house recruitment, it is time to compare the two hiring models. This informative section is a breakdown of all the vital facets that separate the two modules.

1. Recruitment Time and Process

Recruitment Time and Process

Let’s consider this parameter distinctly for the two hiring modules:

  • IT staff augmentation: In this hiring strategy, you can quickly onboard individuals or teams of required professionals by connecting with a suitable vendor. Since the provision of temporary staff is the responsibility of the team augmentation partner, you do not need to conduct interviews, thereby reducing the recruitment time
  • In-house recruitment: When hiring associates or full-time employees, the proper focus should be multi-level assessments. You need to evaluate the technical proficiency, soft skills, and cultural fit of potential candidates. All these aspects require adequate time and discussions. So, the pace of recruitment is comparatively slow

As you can observe, staff augmentation saves recruitment time. Also, you do not need to assess the technical skills of potential candidates. On the contrary, hiring a full-time employee is a long-term investment. So, you should maintain a standard pace during the recruitment process.

2. Costing and Fees

Costing and Fees

How much could you spend to avail yourself of staff augmentation services? Also, is hiring a full-time employee costly? Well, not always.

The following explanation can facilitate the understanding of this aspect:

  • IT staff augmentation: The cost to hire the desired candidates is variable. Team augmentation is a service where you can choose the number of staff members according to your project requirements. The expenditure for such staff augmentation services keeps changing. So, you cannot define the investment necessary for hiring the technical staff
  • In-house recruitment: In this hiring module, you need to define the annual salary, future incentives, and other financial perks. So, the cost and fees for such recruitment remain static. As a hiring manager, you need to stay up to date with the changing payment structure in the market as per different job roles

On the whole, staff augmentation is less expensive. You do not need to invest in incentives, bonuses, or insurance. However, deciding on the initial investment can be challenging as different staff augmentation companies charge distinct fees.

On the other hand, you have complete operational control over deciding the overall salary package during in-house recruitment. So, even if the gross capital requirement for such hiring is high, this module offers more clarity.

3. Technical Proficiency and Skills

Technical Proficiency and Skills

Flexibility is one of the main pros of IT staff augmentation.

The difference between this strategy and in-house hiring will help you assimilate the main reason for the same:

  • Team augmentation: In this recruitment model, you receive temporary employees who possess a specific skill set. The best staff augmentation vendors have a specialized vetting process that ensures the provision of candidates with apt technical knowledge. In addition, you can request different proficiency levels as per the project’s complexity
  • In-house hiring: In some cases, you might get experienced professionals for a specific role. However, most companies plan on training promising candidates as they view them as long-term assets. So, technical proficiency is subjective in this scenario

Overall, IT staff augmentation has a better chance of providing you with technically-sound temporary employees. Since you connect with a team augmentation vendor to receive talented individuals, the onus is on them to check their skills and knowledge. On the other hand, recruiting a full-time employee requires a careful evaluation from your end.

4. Requirement of Training

Requirement of Training

Here’s why many businesses prefer connecting with staff augmentation companies rather than conducting a lengthy in-house recruitment cycle:

  • IT staff augmentation: A reliable vendor has access to a global pool of expert talent in their respective domains. As a result, your business doesn’t need to invest in training and development activities. A simple introduction to the workflow and company ethics is enough to onboard the temporary staff members
  • In-house recruitment: To ensure an in-house employee stays valuable for your organization, it becomes essential to conduct regular training sessions. Enhancing technical skills and knowledge is the responsibility of your Learning and Development (L&D) coordinator. So, you might need to invest in learning resources, whether text-based, videos, or online courses

Staff augmentation is a clear-cut winner on this front. If you are a business that doesn’t want to invest too much on the training front, connecting with a reputed team augmentation company can be a good decision.

However, in-house recruitment can be favorable for companies that want to create a team of long-term associates. You can also consider the training material as permanent resources for any new employee.

5. Level of Commitment

Level of Commitment

On this front, it can be better to choose the in-house hiring strategy. Why?

Well, consider the following difference:

  • Staff Augmentation: The employees through this recruitment model are temporary recruits. They can remain with your team for a span or tenure of a few months or a year. As a result, dedication, commitment, and company loyalty are temporary
  • In-house recruitment: Full-time employees are a regular asset for any organization. They receive various perks, making them loyal and focused on the company’s progress. Furthermore, these permanent staff members have an assurance of a stable job and financial support from their organization. All these aspects have a good impact on their dedication and level of commitment

On this front, an in-house hiring strategy can prove more effective. If you want to build a core team, hiring employees who can stay for a considerable tenure with your business is a good idea. However, the modern era offers more opportunities to talented professionals. The tenure of staying with an employer is comparatively lower than a decade ago.

These days, employees tend to stay for a period of around 4 years with an information sector employer. With regards to professional and business services, the mean tenure of working is around 3 years. This statistic implies that even full-time employees tend to change jobs frequently.

So, staff augmentation is not a completely disadvantageous strategy on this front. In fact, temporary professionals can also portray a decent level of commitment as they know the limited span of a project. This fact is, however, subjective.

6. Ownership of the Project

Ownership of the Project

This point is vital for some companies.

Here’s the difference between the two hiring strategies that revolve around this aspect:

  • IT staff augmentation: In a word, the project ownership is shared in this module. Not all your information is confidential. You need to choose the company offering staff augmentation services carefully to ensure information safety and protection of your intellectual property
  • In-house recruitment: This conventional strategy is entirely safe as the employer wholly owns a project. You can offer a non-disclosure agreement with a full-time staff member before onboarding. Also, in most cases, professionals do not risk sharing confidential details with any other person outside the organization

Although some data sharing is necessary in terms of team augmentation, you don’t have to be concerned about IP and leakage of data. How?

Reliable staff augmentation companies sign an NDA and connect you with professional engineers and developers. However, in this case, choosing your IT vendor becomes critical. Contacting offshore software developers like eLuminous Technologies is vital to safeguard your data.

7. Working Time Frame

Working Time Frame

Finally, you need to consider the project’s time frame and professional assistance before deciding on a hiring strategy.

So, understand how staff augmentation is different from traditional hiring in this aspect:

  • Team augmentation: This recruitment model is suitable for completing short-term projects at a faster rate. By hiring temporary skilled staff members, you can fill the talent gap in your existing team. However, these resources belong to the staff augmentation companies. After completing the project or the desired duration, you need to apply for a new contract or end the association
  • In-house hiring: A full-time employee is your long-term asset. Unless the professional portrays unsatisfactory work performance or undisciplined behavior, they have a long time frame until resignation. So, the ‘working duration’ aspect becomes redundant in terms of in-house recruitment

Moreover, both hiring strategies are suitable for different scenarios. So, the nature of your working time frame defines the preference for a particular recruitment model.

IT Staff Augmentation vs. In-house Recruitment: A Quick Comparative Summary

This section contains a table that differentiates the two prominent hiring models. Observe these pointers to make an informed choice.

    Table: Staff Augmentation vs. In-house Hiring

Sr. No. Parameter IT Staff Augmentation In-house Recruitment
1 Recruitment Time Less More
2 Cost Variable Steady
3 Skills Pertinent Established
4 Training Medium or Low Required
5 Commitment Medium High
6 Project Ownership Shared Not Shared
7 Time Frame Fixed Variable

In a Nutshell

IT staff augmentation is becoming a popular hiring strategy in the IT sector. Some significant benefits of this recruitment module are cost savings, less need for training, and access to global talent. However, the selection of staff augmentation companies becomes crucial to make the best utilization of this service.

On the contrary, in-house recruitment is a conventional strategy that offers proven results and advantages. The choice of both hiring models depends on your project requirements and budget. For best gains from staff augmentation, choose a reputed vendor who understands the intricacies of the domain.

For over two decades, eLuminous Technologies Pvt. Ltd. has served numerous clients for their offshore development and team augmentation needs. So you can connect with the team to receive professional guidance and services.

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