The demand for high-end IT professionals has soared as many companies and whole industries strive to get fully
digitalized to embrace innovation, increase efficiency, and make their clients happier. Unfortunately, there aren't
enough IT experts to meet this demand.
In these conditions, a lot of organizations have realized that traditional hiring cannot cover their staffing needs in
full measure and turned their attention to alternative hiring strategies that can provide them with needed talent in the
blink of an eye. Staff augmentation and outsourcing are deemed to be the most popular of them. Both of these strategies
grant you access to specialized skills that your in-house teams lack enabling higher flexibility and shorter
time-to-market when developing software solutions. However, each strategy has its own peculiarities and addresses
specific business needs.
If you find it difficult to choose between staff augmentation and project outsourcing, this article will answer your
questions and help you understand what is better for your business.
What is IT Staff Augmentation?
Let’s start our journey by explaining the staff augmentation meaning. So, this is a hiring model that enables companies
to quickly bring in the IT specialists they need through collaboration with third-party companies that provide these
specialists for a certain period of time.
While being full-time employees of an external company and working remotely, augmented staff come under your orders and
join your in-house team to help it achieve its goals.
In a nutshell, staff augmentation is similar to leasing, but instead of equipment or property, you rent staff to
complete a particular set of tasks or a project.
Thanks to this approach, companies can quickly address growing workloads, tight deadlines, and a lack of expertise.
Collaboration with trusted IT staff augmentation companies opens access to a global IT talent pool and gives an
opportunity to adjust the size and composition of product teams almost on the fly.
Strengths of Staff Augmentation
Now, let's take a closer look at the benefits your business can gain from staff augmentation:
Nowadays, flexibility stands as an important criterion that differentiates thriving businesses from low-performers.
Staff augmentation empowers your organization with exceptional flexibility when it comes to addressing urgent staffing
needs and responding to ever-changing market demands. It allows you to quickly scale or downscale your workforce, all
without the burdens of committing to long-lasting obligations and engagements associated with usual full-time
employment. Thus, staff augmentation becomes a cornerstone of your ability to maintain a dynamic and adaptable workforce
while offering you the utmost flexibility when optimizing your resources.
Staff augmentation also offers significant cost efficiency and substantial savings for your organization. When you opt
for this hiring model, you avoid numerous expenses typically associated with full-time employment, such as fringe
benefits, training programs, workspace maintenance, taxes, and more. The burden of these costs rests on your staff
augmentation partner. Your financial commitment is straightforward, with a pre-determined hourly or monthly rate for
each IT specialist you bring on board. What's more, the potential for even greater cost savings arises when you consider
engaging offshore IT specialists, capitalizing on their lower costs.
As mentioned above, the scarcity of highly qualified IT specialists is a dire challenge, especially when companies
restrict themselves to the traditional hiring model focused on the local job market only. Staff augmentation, on the
other hand, provides access to a wide talent pool due to which you can quickly find and bring in professionals with even
the most specialized and rare skills you need on your project. Whether it's a seasoned expert in brand-new technologies
or a niche programming language, staff augmentation companies ensure that you have access to the precise skills you
need, even when they are in short supply in your local job market.
Procrastination and delay can cost you a lot. When you're under considerable time pressure, staff augmentation emerges
as the ideal solution. The combination of an extensive talent pool and an efficient recruitment process empowers staff
augmentation companies to quickly identify the perfect specialists for your project. These experts seamlessly integrate
into your internal team and hit the ground running with minimal transition time. This allows you to achieve project
goals, avoid delays, quickly respond to new market needs, and stay competitive in your business niche.
Employees of staff augmentation companies gain extensive experience working on a great variety of projects across the
most diverse domains. Working closely with them, your in-house specialists can use the knowledge transfer opportunity to
learn about brand-new technology, emerging trends, and best practices in software development. So, among others, staff
augmentation also facilitates knowledge sharing and enhances your internal capabilities.
Augmented specialists work remotely, and this is the only aspect that can differentiate them from your in-house staff.
All the rest is the same. You manage them, assign tasks, and monitor their work progress. They are at your service and
you control their work without any mediator to be sure that they are on the right track and do what you anticipate from
them. So, if it is important for you to be the one who calls the tune, staff augmentation provides you with this
Weaknesses of Staff Augmentation
While boasting a multitude of merits, staff augmentation also has certain weaknesses about which it is essential to
Any team expansion requires additional managerial efforts. If your all staff work together under the same roof,
engagement of remote workers can make your leads reconsider and readjust their management strategy to ensure smooth
cooperation and communication between both the in-house team and augmented staff. More emphasis should be also placed on
work planning and task coordination.
There is also a risk of facing communication challenges related to cultural differences, time differences, and language
barriers, which can impact teamwork. So by extending your team through staff augmentation, pay attention to all of these
aspects in order not to get your finger burnt.
It is not surprising that businesses are unwilling to share their sensitive data with external staff because it may
expose them to potential security risks. While data security measures and legal agreements are always put in place when
collaborating with staff augmentation companies, businesses handling top-secret projects still prefer to rely solely on
in-house hiring to maintain greater control over data security.
Staff augmentation helps quickly fill in knowledge and skill gaps. On the other hand, overreliance on this hiring model
might discourage the development of in-house expertise and reduce your self-sufficiency, making you highly dependent on
a staff augmentation partner.
Working remotely, your augmented staff miss out on a lot of in-person team interactions. The absence of office catchups,
water cooler chats, and shared moments may affect their sense of belonging. To counter this, it is highly recommended to
treat augmented and eternal staff equally. In case of a long-term engagement, invite your remote staff to join your key
in-site events and team-building activities to foster inclusivity and maintain high morale.
What is Project Outsourcing?
Outsourcing became integral to business practices in the 1990s. This business strategy suggests delegating specific
tasks, typically non-core ones, to third-party vendors with specialized expertise. These days outsourcing is
particularly widely used in the IT industry helping businesses to implement one-time or ongoing IT projects, such as
software development, software testing, database administration, technical support, infrastructure management, and
The essence of project outsourcing lies in its ability to help organizations efficiently manage their resources. By
partnering with external service providers that excel in these specialized areas, businesses can divert their focus
toward their core, mission-critical projects. This approach allows them to leverage the extensive knowledge and
proficiency of these specialized external partners, ensuring the successful execution of the delegated tasks or
Strengths of Project Outsourcing
While we briefly discussed the advantages of project outsourcing when defining it above, it's crucial to delve deeper
into this topic and explore its specific strengths.
As a rule, project outsourcing is a more cost-effective strategy than having in-house staff. Organizations can leverage
the expertise of external providers to avoid numerous costs associated with full-time employment and have the job done
at affordable rates.
Outsourcing provides access to a wide range of specialized skills that may not be available in-house and in a local job
market. So, this strategy lets you quickly find highly skilled professionals to entrust some of your tasks to them.
At a certain point in time, you may find yourself overloaded with multiple responsibilities and unable to manage all of
them efficiently due to a lack of time or expertise. By outsourcing some of your projects or tasks to a reliable service
provider you can relieve your own burden and unload internal staff while letting real experts act and bring desired
Outsourcing allows you to delegate your non-core tasks to external experts who can complete them better as your in-house
team focuses on the core competencies and strategic goals.
Professional outsourcing partners quickly get up to speed on the current state of affairs and business needs and
complete tasks efficiently and quickly, helping businesses meet tight deadlines and deliver software solutions to market
faster. This efficiency-speed combination is a significant advantage in today's fast-paced business environment.
Project outsourcing comes with incredible flexibility, enabling companies to adjust their resources with regard to
project demands which is beneficial for handling both small-scale and large-scale projects in the rapidly changing IT
Collaboration with IT outsourcing companies can introduce fresh ideas and open a door for new opportunities. These
companies often have a global outlook and can provide innovative solutions and novel visions that might not be obvious
to an internal team. This diversity in thinking can be a catalyst for developing groundbreaking solutions.
Weaknesses of Project Outsourcing
Being guided by the principle of ‘forewarned is forearmed’, we would also like to discuss the drawbacks of project
One of the primary disadvantages of this strategy is the potential loss or lack of control over your outsourced project.
As your chosen outsourcing partner assumes the responsibility for managing and supervising the project, you relinquish
direct influence over its day-to-day operations, decisions, and processes. This loss of control can be disturbing,
especially when the project is critical to your business success. In this regard, it becomes crucial to be discerning
when selecting outsourcing companies to work with. Prioritize those who offer transparency, regular communication, and
close collaboration. Also establish clear project expectations, milestones, and performance metrics to maintain a
certain level of control and ensure that the project meets your strategic goals.
Delegating your tasks to an external vendor can introduce difficulties in maintaining stringent quality control.
Possible quality issues can stem from various factors, including communication barriers and differences in work cultures
and levels of expertise between an in-house team and an outsourced team. To mitigate these quality concerns, it's vital
to set up a robust quality assurance process, define clear quality benchmarks, and establish open and regular
communication with the outsourced team. Regular quality reviews and feedback loops should be integral parts of your
Again, project outsourcing usually suggests sharing your sensitive data with an external company, which can expose your
business to some security risks. Data breaches, leaks, or unauthorized access can have severe consequences, including
financial losses, reputation damage, and legal liabilities. To mitigate these security risks, it is essential to be
proactive and diligent. Ensure that your outsourcing partner maintains the highest security standards. Verify that they
have robust data protection measures in place, including encryption, access controls, firewalls, and intrusion detection
Potential troubles with communication represent one more weakness of project outsourcing. They can be caused by
different time zones, language barriers, and cultural nuances. When not addressed effectively, poor communication may
lead to misunderstandings and delays. Therefore, it's essential to establish clear communication expectations from the
outset and define the preferred communication channels, meeting schedules, and language requirements. The use of modern
collaboration tools and project management software can be also helpful in bridging time zone gaps and facilitating
Your outsourcing partner might not fully understand all specific aspects of your industry and business operation, which
can impact project outcomes and lead to inefficiencies and delays. If you make a bid for your outsourcing partner’s
extensive technical expertise only, be ready to invest extra effort and time in filling in gaps in their domain
knowledge and communicating your company's needs and expectations.
A Comparative Table: Staff Augmentation vs. Outsourcing
Now that you have a complete understanding of both strategies, let's compare them across various aspects.
Suitable for businesses of all sizes.
Suitable for businesses of all sizes.
Offers high flexibility for startups and mid-size businesses. Market leaders can also benefit from specific skill augmentation.
Offers scalability for businesses of all sizes, allowing access to a broader range of expertise.
Helps industry leaders optimize costs while serving as the most budget-friendly strategy for startups and mid-size companies.
Helps industry leaders optimize costs while serving as the most budget-friendly strategy for startups and mid-size companies.
Ensures full in-house control over resources, projects, and workflows.
Suggests turning over control of a project to an outsourcing partner.
Already existing capabilities are used and reinforced to complete projects better or faster by bringing in additional experts.
Internal incapabilities are addressed by delegating responsibility for the project to an external team.
Augmented staff joins an in-house team and closely collaborates with it to achieve a common goal.
An outsourced team works autonomously on the project that has been delegated to it and is managed by a vendor, while still interacting sometimes with a client’s representative and some members of an in-house team.
Long-term vs. short-term
Tackles short-term needs but often results in long-term partnerships.
More suitable for long-term projects.
How to Make the Right Choice Between Staff Augmentation and Outsourcing?
Choosing between staff augmentation and project outsourcing can be pretty challenging at first, given that both
strategies bring considerable benefits. To make the right decision it is highly advisable to analyze your requirements
and consider the key factors listed below:
Start by evaluating the complexity of your project. For small and simple tasks, staff augmentation might be more
suitable. For large-scale projects or repetitive tasks, outsourcing could be a better fit.
It is also important to consider the skills and knowledge of your in-house team, if there is a substantial gap in a
particular area or technology, outsourcing might be a better choice to fill this gap. On the other hand, if your
in-house team possesses most of the required skills, staff augmentation can help you boost productivity with specific
expertise when necessary.
Estimate the duration of your project. Staff augmentation is generally more flexible and suitable for projects of
different lengths. Outsourcing is advantageous for long-lasting projects and ongoing tasks.
Decide which level of control you would like to have over a project. Staff augmentation provides direct control over
augmented staff integrated into your own team. Outsourcing comes with less control but can be a perfect suite if you opt
for hands-off project management, allowing an external partner to handle most project management aspects.
Think about your long-term business strategy. If you aim to develop in-house capabilities, staff augmentation is the way
to go. It offers close collaboration with experts, which can enhance the skills of your in-house team. In contrast,
project outsourcing can be a strategic decision for specific tasks where long-term in-house development isn't feasible
In summary, choosing between staff augmentation and project outsourcing depends on your unique business needs, project
circumstances, and strategic priorities. Additionally, consider that a hybrid approach is also an option. Thus, you can
augment your in-house team with IT specialists to complete core tasks while outsourcing non-core tasks to improve
efficiency and optimize costs. Ultimately, the right choice should align with your immediate project requirements and
long-term business goals.
Staff Augmentation vs. Outsourcing Software Projects: Tips on How to Find the Right Contractor
Whether you opt for staff augmentation or project outsourcing, in both cases, you collaborate with an external vendor
whose choice plays an important role in the success of this endeavor. Rushing headfirst into collaboration with the
first contractor you come across is a bad idea. Finding the perfect partner requires some legwork and careful
1. Comprehensive Analysis of Your Needs
Before you begin your search for the right contractor, conduct a thorough analysis of your project's requirements.
Clearly define your objectives, work scope, budget, any specific skills or expertise needed, and your expectations from
a contractor you’d like to work with.
2. Building a Preliminary List of Candidates
Compile a preliminary list of potential partners. You can start by seeking references from friends or existing partners
who have experience in similar collaborations. Additionally, trusted platforms like Clutch or SuperbCompanies provide
valuable insights and ratings for various service providers. Consider these sources to build your initial list.
3. Evaluation of Chosen Candidates
The next step is to thoroughly study each candidate on the list to decide on the winner. During this phase, consider the
following aspects carefully:
Look for a contractor with the right and extensive expertise and experience in your domain. Direct communication as well
as the company’s portfolio can provide you with insights on this.
Make sure that a potential partner has a spotless reputation and their clients provide only positive feedback on their
experience with the company.
Partnership with nearshore contractors might be more convenient in terms of time zones, while offshore contractors
usually have just a few working hours overlapped with yours. Still, their rates are usually lower, which can compensate
for inconveniences related to a significant time difference.
Ensure that your contractor can communicate clearly and regularly, through meetings, reports, and project management
tools. Also, consider their command of English to avoid misunderstandings.
The work culture and values of your contractor should align with yours. This can impact collaboration and successful
project completion. Do not neglect this.
If your project is subject to certain industry-specific regulations, ensure your partner has experience in compliance.
It is of utter importance to check whether a contractor has solid security measures in place to guarantee robust
protection of your sensitive data.
These tips can be applied whether you're considering staff augmentation or outsourcing. The key is to find a contractor
that meets your project's requirements and your company’s values.
Both outsourcing and staff augmentation have become very popular due to the fact that traditional hiring models cannot
cover all the needs of modern businesses. With either strategy, you can considerably reduce the time to market and cut
down costs while tapping into the global pool of skillful IT specialists.
The decision between project outsourcing and staff augmentation hinges on your unique needs, circumstances, and
priorities. However, it's crucial to ensure that your decision is well-informed. The insights presented in this article
on staff augmentation vs outsourcing aim to provide you with the clarity and understanding necessary to select the
option that best aligns with your objectives and set your business on the path to success.