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Staff Augmentation VS Hiring

Staff augmentation is a great way to build or supplement your software team. Before deciding to hire your in-house developers or completely outsourcing your software project, read this post, and consider the benefits staff augmentation can provide.

What is Staff Augmentation?

Staff augmentation is a type of outsourcing where you contract software developers to help either create or boost your current team. A staff aug company will help you determine the needs of your project to determine the right solution for your organization. You have direct contact with either project managers or lead developers and keep control of your project.

Staff augmentation allows you to budget your IT resources more efficiently since the majority of companies work on an hourly basis. Taking the fixed fee or estimate out of the contract lets you know how many hours and how much each hour is costing you versus unrealistic underbids and sales tactics to get your company to sign a contract.

Benefits of Staff Augmentation. 

Scalable

Staff augmentation is scalable. Most projects have a finite amount of time or resources. One problem with a software team is more hands are needed to build the project, and once it is complete, there’s potential for downsizing. Staff augmentation helps eliminate this with a scalable model. You can scale your augmented team up or down as needed.

Cost Saving

Hiring software engineers can be costly. Time and money costs can build up while you find the right talent, hire, onboard, and retain the right developers to get your project done. Staff augmentation reduces these costs. Once the needs of the project are determined, your company receives the amount of staff with the qualifications needed for your project. 

You Keep Control

If you don’t have a team in place, you might look at traditionally outsourcing the entire project. Losing control over the development of your project is the downfall. With staff augmentation, you work directly with a project manager or lead developer. With continuous lines of communications open, you keep control over the project.

Outside Perspective

Many companies lack a perspective of new or better technologies within their team. Without a fresh look, you might lose the potential efficiency and function of your project with new technologies. Having staff augmented teams working with your project can bring new light to your project. Many organizations have worked with other companies in your industry and have developed new and better ways to build projects specific to your needs. 

Your Resources Utilized

Staff augmentation is building on your team or IT department. With staff augmentation, your resources are utilized, making the transfer of service seamless. Databases, servers, software, and app development is done with your current systems and team. Working with your team will help the maintenance of your systems after implementation. 

Costs of Hiring In-House Software Developers  

When you hire in-house software developers, many barriers can get in the way, and expenses can build. Building a software project is no small task. You may need to hire and train a full team of developers. Once hired, retaining developers may be an issue. Downsizing is a reality in today’s world upon project completion, and the entire team isn’t necessary anymore.

Data chart for the change of developer demand till 2028 for staff augmentation argument.
Projected increase in developer jobs to 2028. Source: bls.org

Determining Your Project’s Needs

Establishing the goals and objectives of your project is necessary before hiring developers. You need to know the architecture of the software. What goals and objectives will the software will achieve. What technologies to utilize for the minimum viable product. How many developers you’ll need to build your project in the required time. 

Searching for the Right Talent

There are several obstacles when finding the right talent for your company and project. One is the cost to find talent. Work hours between human resources and IT will be used to create job descriptions and recruitment plans. Job fairs, job boards, and other talent acquisition tactics cost time and money. The cost to hire multiplied by the number of developers you need. 

Second, there is a shortage of qualified developers actively looking for positions. The recent boom in tech with every company become a “tech” company has overwhelmed the job market creating demand that well outpaced the supply. The shortage of talent will affect the timeframe of getting your project developed. Setbacks cost money.

Hiring Your Software Engineer

When you find the talent your project needs, you have to hire them. You might get lucky, and the developer is well qualified, close, and ready to work. If you find the right engineer in the next state, what incentive will they have to move and work for you? Having competitive benefits like insurance, time off, pay, and other perks cost money on your balance sheet. You may need to offer a sign-on bonus and a moving bonus. 

The production hours of your HR and your department’s recruitment team will add up as well. Most companies have a multi-interview process. These interviews can include skill and technical tests for developers. Costs for background checks and license checks if you offer company vehicles add up as well before you even decide to hire someone.

Onboarding Issues

A big trend and issue with many new hires is ghosting. Companies are finding more and more new hires are not returning after getting hired. Ghosting is costing companies double to fill a single spot. 

When onboarding new hires, the potential for a long training period can hit you, developers with little to no experience need training in your technologies and resources. Not only will the new employee create a lag in development, any other developer training them will lose production hours.

Data for developer jobs by metro areas for staff augmentation argument.
Developer statistics by major metropolitan areas. Source: bls.org

Retaining Software Engineers

Retaining employees can be a tough task. Many times you read people bounce from company to company in the tech industry. What are the costs of keeping your employees? What do you have to offer to make sure the time and money you put into each new hire stays within your company?

The cost of competitive benefits could cost thousands a year. Vacation, personal, and sick time are all accounting line items. Time off also causes a workforce shortage that has to be picked up by other developers. Bonuses and other fringe benefits tally up in the long run. 

Ensuring employee happiness might not be enough to keep your best employees. Remember, you gave a nice bonus to snag them from your competitors. This time they got a bonus and promotion. The vicious cycle of employee turnover can add up and slow your project down.

A Look at Total Cost

Some experts in the tech field say it can cost up to $50,000 to find, recruit, and hire software developers. Yearly salaries for developers has grown as the supply has decreased. With nearly every industry benefiting from apps and SaaS, the pay rate is in the high end. Yearly cost for software talent can reach well over $150,000 a year after benefits (national average) with vacation, training, benefits, PTO, and salary. According to Forbes, on average it takes 52 days to fill vacant tech spots.

Per Forbes, the tech industry has the highest turnover rate of any other industry. Tech giants like Amazon have a turnover time of 1 year on average. Google has a slightly better timeframe of 1.1 years. With tech giants having such short retention times, smaller companies can’t remain competitive to keep qualified talent. If it costs $50,000 to hire a developer, over 10 years it could add up to $500,000 with a 1-year turnover. 

This figure can rise as you find more and more qualified engineers. While it may be worth it, one last cost is downsizing. If you have to let employees go after a project, the potential for unemployment payments is likely.

Chart with the projected data for IT jobs till 2028 for staff augmentation argument.
Source: bls.org

Staff Augmentation can be Tech Agnostic

Many times when you hire a software developer, they may have a specialty. That specialty might not be what you need for your project. Staff augmentation offers a solution to this problem. When working with teams, you have a larger pool of technology skill sets. What does this mean?

Having more tech-based skill sets provides staff augmentation teams the ability to adapt to the technologies you have and need to ensure your project functions the way your company demands it. Technologies include languages, architecture, UI/UX development, and integrations. 

Below are just some of the technologies Covey can help with for your company.

Technology Proficiency

Languages

There are many languages used in commercial software. Many older businesses may still use legacy systems built on obsolete languages. Staff augmentation companies, like Covey, with vast knowledge in a range of languages, can handle these obstacles with integrations or new custom applications.

Languages to look for with a staff augmentation company include:

  • C Languages (C, C++, C#)
  • Java
  • Python
  • JavaScript / Typescript / NodeJS
  • Ruby 
  • PHP

Markups/Style

  • HTML
  • CSS
  • Bootstrap (includes JavaScript components)
  • Material Design

Frameworks & Libraries

  • React / Redux
  • Vue.js
  • AngularJS
  • jQuery
Staff augmentation technologies popular languages.
Source: https://www.statista.com/chart/16567/popular-programming-languages/

Cloud Computing

Cloud computing is taking over where the standard physical server was supreme. Cloud computing migrates your data, software, apps, and computing power to a third-party provider and gives online access allowing you to scale and be mobile. 

Staff augmentation companies who have certified architects and developers through a third-party provider can ensure your migration will be successful. Cloud migration services should include building your databases, moving or building your apps, and other services that can incorporate into your cloud computing objectives.

Databases

Staff augmentation companies need to be proficient in database development and manipulation. Business runs on data from clients and customers. Every department needs data to optimize its processes and increase revenue. 

When hiring a staff augmentation company, some of the skills with database development to look for are:

  • SQL Server
  • Oracle
  • MySQL
  • PostgreSQL
  • NoSQL
  • MongoDB

Mobile Development

The world is moving to mobile. Mobile computing is becoming a dominant force with smartphones in everyone’s pocket. Finding a staff augmentation company with the skills and experience to develop your mobile apps can help you become more efficient and scale globally. 

Some of the conventional technologies used to help integrate mobile apps into your business are:

  • React-Native
  • iOS Native
  • Android Native
  • jQuery Mobile
  • Cordova

Project Proficiency

Staff augmentation companies need experience with various projects. The days of Microsoft Excel and simple programs that supplement your business are over. Technology needs to be a priority to stay or become competitive in any industry.

Custom Software Development

Many companies are finding moving to custom software is saving money due to licensing and updates. Custom software development will usually require a completely new build. There is a lot of planning and testing that is needed.

It is crucial to find a staff augmentation company that will partner with your company for success. For instance, Covey relies on our consulting phase to help determine the best route for your company to take with your new software. We ensure our companies are a fit, so software implementation is seamless.

System Integrations

Many companies are heavily invested in various software systems to run. Each department may have a separate suite used to run efficiently, and you may be happy with them. The issue with this is a lack of efficiency. When documents or data needs to transfer across departments or channels, manual transfers could be required. 

Integrating your systems into main hubs can help alleviate the inefficiency while allowing you to keep the systems that you found work best for your business. Creating a standard user interface or database provides access by those who need it when they need it. 

Some integration technologies to look for are:

  • REST APIs
  • GraphQL APIs
  • Web UI/UX
  • SSO
  • Apache-NiFi
  • SaaS
  • Cloud-Based

API Development

API stands for – application programming interface. An API is a program that allows applications to communicate with each other. What an API does is manages the access points between clients, servers, databases, etc. A basic example of this is the “Share to Facebook” button or link you see in blogs, articles, and other media. APIs can request and alter data sent through it.

Business Function API: 

APIs don’t just have to make money. APIs can enhance core business functions. The core function can be any process that is essential to your business. Sales, marketing, accounting, supply chain, etc. are all essential business functions. 

API as a Product

APIs can be developed and used as a product, as well. Creating an API that a fee to access data is also possible. Product APIs are common with SaaS, financial, insurance, and other data related companies with a B2C or B2B consumer aspect.

DevOps Proficiency

Software development is becoming more and more efficient with new best practices to help with tools for automation, testing, deployment, etc. Staff augmentation needs to utilize these best practices. One of these practices is DevOps.

DevOps is short for development and operations. DevOps is a collaborative development environment where your development team and business operations work together to get software implemented quickly and efficiently. DevOps requires maximum automation, continuous development, continuous delivery, and continuous deployment. 

Hiring a company that follows a DevOps approach to development is vital to the success of your project. DevOps takes a customer-centric approach to software engineering.

Staff Augmentation vs. Full Outsourcing

Traditional Outsourcing Model

Outsourcing can give staff augmentation companies a bad name. Traditional outsourcing involved turning full control of your project to a third party. Many times the company is overseas, and communications can be an issue. The project gets built and turned over to your company for implementation. 

The Issues With Traditional Outsourcing

Traditional outsourcing has several key disadvantages that staff augmentation can help to alleviate. The one benefit in traditional outsourcing is the cost, but this is at the price of giving up control, communications issues, implementation, and qualification.

Control

Traditional outsourcing forces complete control over development to a third party company. You don’t know who is working on your project and might have a representative located on-shore to handle communications.

With staff augmentation, we build on your team. You are connected to a dedicated project manager and have a team of dedicated developers that work on your project. You are the manager of the project and have the say and feedback from your project manager or lead developer to how the project is progressing.

Communications

Many companies that handle outsourced work have on-shore centers for communications. Outsourcing of development work happens off-shore. This practice can skew communication between you and the developers. 

Implementation

Once your project is complete with traditional outsourcing, you get the project turned over, and the implementation may be your responsibility. With staff augmentation, we use your resources, and implementation happens as we build it with our DevOps practices. With staff augmentation, scaling down is also possible. Scaling allows you to keep developers to ensure your project is working correctly after implementation.

Staff Augmentation vs. In-House Engineers

Project Needs

A staff augmentation company, like Covey, is experienced with determining your project’s needs. Consulting is one of our core services within the staff augmentation process. We work with your IT and current software team to decide what technologies, types of services, and other aspects of development. Staff augmentation should be more than contract work. It needs to be a partnership.

Finding and Hiring Talent

Finding talent is costly and takes time. Staff augmentation takes the pain out of building a team. With staff aug, part of your onboarding is determining the number of developers you need. You get a dedicated team complete with a project manager assigned to your project. You don’t have to guess how long it’ll take to get your project moving on the right path.

Retention

If your developer quits or is let go, you have to scramble to cover the work that is not getting done. With staff augmentation, if you pay for three developers, you get three developers. The structure of a staff aug team prepares for the loss of a developer. Some backup developers can step in and take their place. Even if you have one developer, a second developer stays updated on your project just in case.

Scalability

Staff augmentation allows quick and seamless scalability for you and your project. Scaling your team up when needed is as simple as a phone call to your project manager. Once the project is complete and implemented, you can scale down to a skeleton crew or less. You don’t have to worry about downsizing issues like unemployment. 

Total Cost Savings

As we discussed above, it costs a lot to find and hire engineers. Staff augmentation allows you to build a team for an hourly rate. No costs to recruiting, hiring, and retaining your team. You decide the number of hours per week you need, and that’s how you pay. No need to worry about benefits, overtime, vacation, or other employee costs. 

Conclusion

While hiring your developers seems like the best route to getting your project done, other options like staff augmentation can help lower costs. When you initially decide to develop a software project, consider staff augmentation’s core benefits before you hire or outsource your project.

To learn more about Covey’s staff augmentation services, email, or call us today at 315-738-6016. We are a software staff augmentation company working with both commercial and government clients. Our specialties include custom software and API development, AWS cloud computing, blockchain, and SaaS development. We work with tech companies, finance and insurance, manufacturing, pharmaceutical, and healthcare companies, helping build software projects with 100% US-based software developers on-demand.