So, you’re thinking about outsourcing employees to help with a spike in demand or to fill skills gaps on a particular project. You have a number of directions that you could go in to fill your staff shortage woes – but you’re deciding between staff augmentation and outsourcing. You are absolutely in the right place!
Here we’ll discuss the pros and cons of staff augmentation vs outsourcing, and what that means for your business.
Why All the Cool Companies are Hiring on Demand
If you’re two steps behind this conversation, and still wondering why flexible staff arrangements are the way to go, here’s a quick refresher.
Short-term needs: Not every gap needs a full-time employee. Hiring on demand means that you can fill a short-term need such as an employee who is long-term sick, parental leave, or a project with a limited time frame attached. When the need is over, the talent goes back in the box. Er, to another job elsewhere.
Specific, niche skills: Your company can’t have all the skills in-house, don’t feel bad. Sometimes you need to augment your existing team with someone who has deep expertise in a certain area, such as augmenting a finance team with an equity or tax guru when expanding into new regions.
Added resources: When a deadline is looming and it’s becoming clear you’re never going to make it happen without more people power, hiring on demand allows you to quickly and easily scale the number of hands on deck, getting the job done on time without compromising on quality.
Quick onboarding: Do you know how long it takes to hire nowadays? It’s longer than you want it to be when you have a pressing project that needs extra hands. Hiring on-demand means that you don’t have to sit through multiple rounds of interviews and onboarding headaches. They could even start today!
The Difference Between Staff Augmentation and Outsourcing
Once you’ve realized that you can’t do it alone, it’s time to decide what kind of support you want to opt for. Here’s a quick definition of both of the categories of on-demand hiring that we’re discussing today.
Outsourcing is giving the work to an external team. This could be a whole project, or it could be specific tasks within a project. For example, you might outsource the creation of a website to an external marketing agency, or you might create the website in-house, but outsource the content writing, or the logo design. Some people believe you should outsource “everything”, ie: as much as possible, so that you can focus on your core business focus and strengths.
Staff augmentation is bringing people into your business, to work alongside your existing team. If we use the same website example, you may hire additional web designers or UX developers to augment your in-house teams and get the website live on the right day as planned. IT staff augmentation is a popular example of this approach, as many businesses have a lack of available talent to take on specific niche technical skills.
What are the Benefits Of Staff Augmentation, and When is Outsourcing the Better Choice?
The main difference when you’re thinking about staff augmentation vs outsourcing is whether you need the staff to be working alongside your existing in-house team. When you outsource a project, you lose a lot of control over how the project will be completed. When outsourcing – freelancers, agencies or outsourced employees will choose where they work, when they work, and how they work.
Psst: This isn’t just a preference – it’s part of compliance. For example, under certain US regulations, if you force a freelancer to work in your office, with your systems and tools, and during your working hours – you can’t consider them a freelancer, and you need to treat them as an employee, including providing all relevant benefits and taxes.
There are some great things about outsourcing, however. When you outsource a project to a trusted external team or stakeholder, you can usually guarantee that they will provide the necessary expertise, and get the job done on time. You can turn your attention to other tasks, and let them get on with it. You also have a transparent price for managing the project, and don’t have to worry about elements such as turnover, or costs. In contrast, if you add staff to your in-house team, they can get caught up with other tasks – making it more likely you’ll miss a deadline, and you’re ultimately responsible for training, added expenses, and finding a replacement if they leave.
Staff augmentation also adds a deeper level of control over the project, giving more granular oversight to the internal project manager. The augmented staff can more easily work with your data and systems, critical in highly regulated industries or where data cannot be taken outside of the office.
More Confused Than When You Started? Let’s Break it Down
Staff augmentation vs outsourcing: Here are the basics.
Staff Augmentation
Pros
- Tight oversight and control over the work
- Use of the same systems and tools as in-house teams
- More flexibility over changing the scope of work
Cons
- More responsibility over costs, deadlines, and training
- A need to manage the project internally
- Complicated to scale
Outsourcing
Pros
- Project or tasks taken off your hands entirely
- No responsibility over training or unexpected costs
- Easy answer to a lack of internal capabilities
Cons
- More difficult to integrate with existing team
- Less control over the project as a whole
- Tight scope of work, without flexibility
If you’re looking to hire on demand, whether you’re leaning on staff augmentation, consultants, freelancers, or agencies – you’re going to need a way to manage that new staff. After all, this talent is not the same as employees, and they have their own needs when it comes to everything from sourcing and onboarding, to management, payments and compliance.
That’s where Fiverr Enterprise comes in, offering a Freelance Management System that checks all the boxes, making it simple to benefit from staff augmentation of any kind.
Reach out to schedule a demo, and see how simple it can be.
Related content: Read our guide to outsourcing employees