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The talent shortage has now become a major concern for enterprises worldwide. A 2023 McKinsey analysis outlines that employers struggle to fill their pipeline of skilled resources, especially as workers continue to churn. According to Statista, in 2022, approximately 70% of organizations across the globe faced a talent or skill shortage, especially in tech.

To add to that, the looming economic uncertainty has impacted the hiring plans of organizations. New hiring freezes and even mass layoffs are being projected. Bringing in contract workers from a reliable vendor to close the talent gap and let software development and technology operations move with less risk and cost seems most practical in such a situation.

This is where staff augmentation comes to the fore. It refers to the practice of bringing in temporary workers on a project-by-project basis as the need arises. This helps a company acquire competent talent without committing to providing permanent employment. In many cases, this is also faster than running through the process of finding and hiring full-time employees.

In an environment where boards and investors are asking CxOs to cut costs, working with contract employees is also more practical. It’s a truism of the corporate world that closing contracts is far easier, cheaper, and less painful than letting go of full-time employees. It also does less to hurt corporate brand value – no need for blaring headlines like, “Corporation X lays off staff.” It’s true that no CxO staffs projects with the intention of firing people but tougher times demand an acknowledgement of such exigencies.

No wonder reports suggest the staff augmentation industry will see incremental spending of approximately $81 billion and will grow at a CAGR of 3.53% by 2025. These numbers demonstrate how well staff augmentation works as a strategy for closing the talent acquisition gap.

But is it truly beneficial to your company’s growth?

How Does Staff Augmentation Help Drive Businesses?

The entire corporate world has recently witnessed a multitude of layoffs, with the largest and most reputable organizations letting go of their talented employees. Companies are looking to cut costs to optimise operations during the economic downturn.

But can fewer employees be the future? Perhaps yes! And not just for cost reasons.

Reinforcing the In-House Team with a Specialist-First Mindset

The business model is shifting to a specialist-first mindset, where companies hire expert contractors to answer complex questions and accommodate spontaneous business needs.

Following the same logic, many industries focus on periodic work requirements. So, if a manufacturing firm needs to close a mobile application development project within nine months but lacks the skills or the ability to create a roadmap, it can hire a skilled IT strategist to help a core internal team smoothly contemplate the tasks. They can work with a staff augmentation partner to add resources to their team and achieve the desired results on time. All these staff augmentation-related engagements can either be short-term or long-term, depending on the scope of work.

Likewise, when it comes to software development, QA, testing automation, DevOps, etc., startups, mid-sized organizations, or any business at any stage of their maturity can add muscle by contracting experts for the execution and completion of development projects without necessarily onboarding them permanently. These contractors can work as a part of the internal team, support business growth, and even train internal resources as projects progress.

Growing Quickly While Bridging Skill Gaps

The world is becoming a tech-first space, and companies looking to leverage cutting-edge technologies like AR/VR, IoT, AI, data analytics, etc., have to set up innovation-driven workflows to bring unique products to the market faster and acquire domain leadership.

However, again, market challenges can be detrimental to enterprises realizing the successful completion of their development projects. In fact, research outlines that with 40% of workers planning to leave the workforce, organizations are finding it harder than ever to retain skilled resources. There’s also the problem of finding, hiring, engaging, and retaining specialist resources in areas that are not core to the enterprise. For instance, it will not be easy for a solar energy company to hire a small team of application development experts. That doesn’t mean the internal application development project isn’t key though. That’s where staff augmentation can help.

Besides, when you look more closely, the expertise in the IT sector, for example, varies so greatly that it is challenging to acquire one-site-fits-all resources. This resource and skills-first requirement makes staff augmentation an excellent way to gain access to the best talent and enables businesses to complete projects faster without sacrificing quality.

How Should Businesses Pursue Staff Augmentation?

In essence, staff augmentation can be a powerful tool for businesses looking to scale up quickly and efficiently. Here are some steps to go about it:

Define the Needs

Businesses must be very clear and precise in terms of what they require. A fintech brand, for example, needs to create a mobile application that will give customers access to their products and services. The company must develop it in a way that fits its current product portfolio and operational needs in terms of security, scalability, performance, etc. The process should begin with defining the goals and requirements, the timeline, as well as the number of people required to achieve the desired output.

Identify the Right Service Provider

Once businesses have defined their needs, their next task is to identify the right service provider who can help achieve results as per expectations. This comprises a number of parameters, including the cost, experience, available resources, industry knowledge, required quality level, etc. The idea should be to granularly judge the service provider based on their skills and experience in a particular area and what kind of engagement model will yield the optimal results.

Evaluate the Process & Quality

Once the contractors have been hired, it’s time to evaluate the process and track the quality of work being done. This will help businesses build a stronger case for engaging service providers in the future.

At the end of the day, the requirements for project delivery must be clearly stated, whether they are soft skills or technical skills. Businesses must conduct extensive assessment drills based on the pre-defined fit check for desired output and further understanding of scaling and re-using the staff augmentation model for development.

Navigating the Waves with Staff Augmentation

Staff augmentation can alleviate the risk of getting saddled with substandard employees.

Often, there’s an immediate need for talent. However, in many cases, rushing to find the best talent results in a loss of money and time. A report highlights how it takes over 3-8 months for any employee to be productive and contribute at work. Many times, companies cannot afford this buffer time for driving and scaling operations.

Staff augmentation is an excellent way to supplement the in-house team with domain experts on an as-needed basis. This enables organizations to prioritize both value and efficiency. This further eliminates the risk of hiring people only to fire them later due to financial uncertainty.

At Pratiti, we specialize in providing staff augmentation services that not only usher in technical competence but also provide unending support to management and internal teams. Our craftsmanship model enables us to be innovative while also delivering the required output. Get in touch with our team to learn about our flexible engagement models to power up your business needs.

Nitin Tappe

After successful stint in a corporate role, Nitin is back to what he enjoys most – conceptualizing new software solutions to solve business problems. Nitin is a postgraduate from IIT, Mumbai, India and in his 24 years of career, has played key roles in building a desktop as well as enterprise solutions right from idealization to launch which are adopted by many Fortune 500 companies. As a Founder member of Pratiti Technologies, he is committed to applying his management learning as well as the passion for building new solutions to realize your innovation with certainty.

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